The Chronicle Herald from Halifax has an excellent summary of the status of the agreement made on Friday.
Monday, January 3, 2000
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The Halifax Herald Limited
Sysco buyers to start moving in
By Barry Dorey / Staff Reporter
The man behind the lead company in the Sysco takeover has only visited Sydney
a few times, but he's already learned plenty about its people.
They want and need the steel mill to succeed, he said.
"We can sense that when we have been there," said Myles Paisley, president of
Detroit-area S&K Steel.
"We're very upbeat that we can do something positive and very hopeful that we
can get everything together."
Gordon Balser, the minister responsible for Sysco, announced Friday that a deal
to hand over the money-losing steel plant had been achieved.
Rail Associates Ltd. - a U.S.-based consortium led by Mr. Paisley's
nine-year-old firm based in Madison Heights, Mich. - will pay $30 million over
10 years, with a $1.5-million down payment due Jan. 12.
The province agreed to absorb the cost of employee pensions and environmental
cleanup of the Sysco industrial site.
The sale won't be officially completed until April 15, but Rail Associates is
expected to immediately begin taking over parts of the Sysco operation.
Mr. Paisley, who refused to discuss details of the agreement, citing confidentiality
clauses specified by the province, said there's also plenty of paperwork to
complete.
"Those final negotiations don't always head in the direction you want," he said in
an interview Sunday. "A lot of things have changed in the past few days."
The consortium's initial proposals must be rewritten to mirror the agreement
reached with the province in the wee hours of New Year's Eve, he said.
S&K Steel manufactures rail products for global distribution. Mr. Paisley said the
company manufactures "rail fasteners, splice bars, overhead gantry rails," as well
as steel products for transit systems.
Mr. Balser said Friday that the new owners expect to put Sysco through an
extensive restructuring that's expected to cut about 150 jobs, but Mr. Paisley
would not comment Sunday.
United Steelworkers of America officials have said they hope most of those jobs
will be eliminated through attrition, since about 150 workers are now eligible for
retirement.
Premier John Hamm said Friday that Rail Associates "is a group that has the
expertise, that has the business plan that I believe can make this a viable plant."
Mr. Paisley said the companies were assembled to bring expertise to all aspects
of production and marketing.
He said officials in several cities negotiated on a night-long conference call.
"We were doing it by phone from four different locations, all trying to get the
whole thing done."
The only representative of the consortium to attend Friday's news conference was
Rick MacInnis of Corus Consulting, formerly Hoogovens Consulting. He said the
new owners will stage an aggressive marketing campaign to attract new
customers and lure back old ones.
One partner in Rail Associates Ltd., the Reserve Group of Akron, Ohio, was
once said to be a front-runner to buy the mill outright.
The Titanium Corp. of Canada is also a part of the ownership group and has
been involved in ore exploration near Maitland, Hants County, since early 1999.
Sysco has cost the taxpayers of Nova Scotia an estimated $2.8 billion in
operating losses and equipment costs since the provincial government took over
the plant from the Dominion Steel and Coal Company in 1967.
The province is responsible for pensions of current retirees, and those of any
workers who go on pension before April 15.
Winzer |
