Canadian mills may split from US Steel

The Ontario Superior Court of Justice has approved what Pittsburgh-based United States Steel Corp. (U.S. Steel) calls a “mutually agreed upon transition plan with U. S. Steel Canada (USSC) as part of USSC’s restructuring under Canada's Companies’ Creditors Arrangement Act (CCAA) process.”

The agreement essentially entails a split between U.S. Steel’s American and Canadian operations, including the following steps: 

• U. S. Steel will no longer generate any sales on behalf of USSC;
• going forward U. S. Steel will “load its production” onto its U.S.-based mills;
• U. S. Steel will transition away from providing technical and engineering services to USSC or in supporting any quality claims made against USSC;
• U. S. Steel will continue to provide other shared services that USSC relies upon for up to 24 months (with the exception of sales); and
• should USSC enter into a new sale and restructuring process in the future, U. S. Steel has agreed not to be a bidder.

On Sept. 16, 2014, USSC’s board of directors decided to apply for relief from its creditors pursuant to Canada’s Companies' Creditors Arrangement Act.  As a result of the 2014 CCAA filing, USSC and its subsidiaries were deconsolidated from U.S. Steel’s financial statements on a prospective basis. In the months following the CCAA filing, no negotiated or other settlement was achieved.