NEW YORK Canadian flat-rolled steel producer Essar Steel
Algoma Inc. has been granted a 12-month deferral of special
pension payments by the government of Ontario effective
December 2012 to November 2013.
The company would have had to make payments of approximately
Canadian $70 million ($71 million) over the period, a company
spokeswoman told AMM
Essar will continue to pay ongoing pension service costs for
its defined-benefit pension plans, the company said.
The deferral was necessary because of historically low interest
rates that have more than doubled the companys pension
contributions compared with previous years, as well as a
decline in steel prices and one-time operational
issues, the company said.
These issues include an unplanned outage of Essars blast
furnace and problems implementing a new computer system, the
This temporary relief, in combination with continued
cost-cutting, operational improvements, improving industry
fundamentals and lower raw material costs, will enable Essar
Steel Algoma to manage its liquidity through this difficult
cycle, chief executive officer Kalyan Ghosh said.
Sault Ste. Marie, Ontario-based Essar, a subsidiary of Mumbai,
India-based Essar Group, has recorded three consecutive losing
, Nov. 14).