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
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.