Algoma Steel announced this morning that it has completed $500 million in financing arrangements with the federal and Ontario governments, as previously announced on Sept. 29.
"Completing this financing reinforces our strong partnership with both levels of government and supports our ability to navigate current market conditions as we complete our electric arc furnace transition,” said Michael Garcia, Algoma's outgoing chief executive officer.
"This support provides Algoma with long-term financial flexibility. We are grateful for the government’s confidence in Algoma’s future as a low-carbon steel producer," Garcia said.
"Finalizing these facilities marks another key milestone in executing our financial strategy,” said Rajat Marwah, president and chief financial officer.
Marwah will take over as chief executive officer on Jan. 1, 2026.
“In line with the previously announced terms, the new funding allows us to remain focused on operational efficiency, cash generation, and our plate-first commercial strategy,” he said.
The seven-year arrangements include $400 million (including an $80 million secured tranche) from the Canada Enterprise Emergency Funding Corp. (CEEFC) and $100 million (including a $20 million secured tranche) from the Province of Ontario.
"Algoma has issued 6.77 million common share purchase warrants to CEEFC and Ontario proportionately, with each warrant being exercisable for one common share of Algoma at an exercise price of $11.08 for a 10-year term, vesting proportionately as unsecured draws are made under each of the CEEFC and Ontario facilities," the company said in a news release.
"The company expects to draw from the secured tranche first, providing immediate liquidity to support operations and near-term transformation milestones. These financings underscore the continued alignment between government and industry partners to enable a resilient, globally competitive Canadian steel sector that supports domestic supply chains and industrial decarbonization objectives," the release said.
The company is expected to announce hundreds of layoffs related to its electric arc furnace transition.
Last Thursday, a CBC National report quoted a member of United Steelworkers Local 2724 as saying: “Yesterday, they sent out an email to the whole of the company, asking them to update their resumes.”
This morning, Bill Slater, president of Local 2724, provided clarification of that statement after a request from SooToday.
"The company only asked for people to send resumes so they can get everybody's up-to-date qualifications for when we get to layoffs," Slater told us.
The email from the company to employees gave no information about when the layoffs will occur, Slater said.