Found this in the Globe & Mail, so it must be big news!
Would be interested to get your take on the deal Chevy. I see a couple of companies in the Group of Eight which will mean a handsome payoff for NAR, if I'm reading it right. I will await your comments, before I get too excited. Lets hope that this news is what NARites have been waiting for.
"Nova Scotia to sell Sydney Steel to consortium
This time sale's final, minister says
KEVIN COX
Atlantic Bureau
Saturday, January 1, 2000
Halifax -- For the third time in the past decade, the Nova Scotia government has announced the sale of
financially troubled Sydney Steel Corp.
Each of the previously announced deals has fallen through.
But this time, the sale is final, Economic Development Minister Gordon Balser said yesterday, as about 650
steel workers waited anxiously to hear if the Sydney mill would be sold or closed.
"The province is out of the steel business," he said. "Taxpayers will no longer fund the operation of a steel
mill in Nova Scotia. It is in private hands to be run as a business."
A consortium called Rail Associates, led by U.S.-based S&K Steel and including the Akron, Ohio-based
Reserve Group, Titanium Co. of Canada, Corus Consulting Ltd., Holland Company, Palmer
Holdings Ltd., Amerifund International Finance Group and William Powers, has agreed to pay
$30-million over the next 10 years.
Corus Consulting, formerly known as Hoogovens Technical Services Inc., a Dutch company that managed
the mill for the past year, has agreed to continue as the management team under a five-year plan. The deal
ends nearly two weeks of frenzied negotiations as the Progressive Conservative government tried to live up
to its July election promise to either sell or close the mill by Dec. 31.
The previous Liberal government hired Dutch investment bank ABN Amro last April to find a buyer for the
mill. More than 100 companies were contacted and the list was reduced to eight interested parties in
September.
Previous deals to sell the mill to a Chinese company and then to a Mexican steel maker fell through. In
1998-99, the operation lost $40.4-million, and the province estimated it would lose $31.8-million in the
current fiscal year.
But closing the operation would have cost the province close to $500-million in pensions and severance
packages for steel workers. It also would have been an economic knockout blow to an area already reeling
from the loss of 1,100 jobs as Sydney-based Cape Breton Development Corp. is being privatized.
Premier John Hamm, who was harshly criticized in Cape Breton during the election campaign for vowing to
close or sell the mill, said the province should not be in the steel-making business.
"We are getting out of the business and have put an end to the burden on the taxpayers," he said.
Under the agreement, Rail Associates will pay $1.5-million before the closing date of April 15. At the time
of the deal closing, Rail Associates will pay the province $2.25-million, with additional payments of
$1.5-million a year for 10 years and a payout of $11.25-million in the final year.
SYSCO FACTS
Product: Makes steel rails in Sydney, N.S.
Ownership: Nova Scotia government bought Sysco from a private company in 1967 and turned it into a
Crown corporation.
Work force: Has dropped to about 700 from a peak of 4,000.
Losses: $31-million in the past fiscal year.
Subsidies: It's estimated the plant has soaked up nearly $3-billion in provincial and federal government
support in the past 30 years.
Suitors: The province has failed three times to sell the plant: in 1994 to Minmetals of China, in 1996 to
Global Steel Holdings of Ontario, and in 1998 to Grupo Acerero del Norte of Mexico.
Purchase price: Rail Associates agrees to pay $30-million over 10 years.
Provincial liability: Government responsible for workers' pension fund and environmental cleanup.
Closing date: Deal closes by April 15.
Union: Company says it plans to renegotiate union contract.
Quote: "The taxpayers of Nova Scotia don't belong in the steel-making business. We are getting out of the
business, and have put an end to the burden on taxpayers." -- Progressive Conservative Premier John
Hamm.
Canadian Press
Winzer |
