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Steelmaker files for bankruptcy protection
Stelco has put itself into bankruptcy protection, warning that overwhelming pension and employee benefit costs are key forces pushing it to the brink.

The ailing steelmaker's money woes came to a head yesterday morning at 7:30, when the board of directors concluded Stelco could run out of cash within the next few months.

It lost $168 million in the first nine months of 2003, has a $545-million long-term debt and is $1.3-billion short of what it needs to cover pension obligations into the future.

Stelco said it could no longer hold on by the fingertips, trying to make ends meet. Its massive filing to the Ontario Superior Court asked for protection from creditors on grounds that Stelco could collapse and become insolvent if not given time to turn itself around.

"There was no alternative," CEO Courtney Pratt said. "The company faces very serious problems."

Stelco shares have lost 80 per cent of their value in the past year and analysts had predicted a turnaround was unlikely without drastic change. On the Toronto Stock Exchange, Stelco shares closed 90 cents lower yesterday at 83 cents, far off its 52-week high of $4.65. Source.

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January 31, 2004