{"id":77339,"date":"2025-10-02T06:30:46","date_gmt":"2025-10-02T10:30:46","guid":{"rendered":"https:\/\/wawa-news.com\/?p=77339"},"modified":"2025-10-02T07:00:29","modified_gmt":"2025-10-02T11:00:29","slug":"algoma-steel-secures-c500-million-liquidity-support-from-governments-of-canada-and-ontario","status":"publish","type":"post","link":"https:\/\/wawa-news.com\/index.php\/2025\/10\/02\/algoma-steel-secures-c500-million-liquidity-support-from-governments-of-canada-and-ontario\/","title":{"rendered":"Algoma Steel Secures C$500 Million Liquidity Support from Governments of Canada and Ontario"},"content":{"rendered":"<p align=\"justify\"><strong><a href=\"https:\/\/wawa-news.com\/wp-content\/uploads\/2020\/08\/AlgomaSteel.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-35858\" src=\"https:\/\/wawa-news.com\/wp-content\/uploads\/2020\/08\/AlgomaSteel-300x250.png\" alt=\"\" width=\"300\" height=\"250\" srcset=\"https:\/\/wawa-news.com\/wp-content\/uploads\/2020\/08\/AlgomaSteel-300x250.png 300w, https:\/\/wawa-news.com\/wp-content\/uploads\/2020\/08\/AlgomaSteel-150x125.png 150w, https:\/\/wawa-news.com\/wp-content\/uploads\/2020\/08\/AlgomaSteel-500x417.png 500w, https:\/\/wawa-news.com\/wp-content\/uploads\/2020\/08\/AlgomaSteel.png 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Algoma Steel Group Inc.\u00a0<\/strong>today (September 29, 2025) announced the execution of binding term sheets to secure C$500 million in liquidity support, comprising C$400 million loan facilities from the Government of Canada under the Large Enterprise Tariff Loan facility and C$100 million loan facilities from the Province of Ontario (collectively, the \u201cFacilities\u201d). The Facilities provide essential financial flexibility amid prolonged trade uncertainty and position Algoma to advance its ongoing business transformation.<\/p>\n<p align=\"justify\">Today, the Honourable Patty Hajdu, Minister of Jobs and Families and Minister responsible for the Federal Economic Development Agency for Northern Ontario, on behalf of the Honourable Fran\u00e7ois-Philippe Champagne, Minister of Finance and National Revenue, alongside Will Bouma, Parliamentary Assistant to the Minister of Northern Economic Development and Growth for Ontario, and Bill Rosenberg, Member of Provincial Parliament for Algoma\u2014Manitoulin, will join Algoma CEO, Michael Garcia, and CFO, Rajat Marwah, along with senior management team members and workers at the plant for the announcement.<\/p>\n<p align=\"justify\">\u201cOn behalf of Algoma, I would like to thank Prime Minister Carney, Premier Ford and their governments for their steadfast support of our Company and the Canadian steel industry,\u201d said Mr. Garcia. \u201cThe ongoing imposition of a 50% tariff on Canadian steel has closed the U.S. market to Canadian steelmakers. We require this liquidity support to withstand this unprecedented U.S. governmental action, and importantly, to continue our transformation for the future. Algoma is poised to be a critical contributor to our nation\u2019s agenda of building a stronger, more competitive, and prosperous economy. We look forward to supplying Canadian steel \u2013 from right here in Sault Ste. Marie \u2013 to, as the Prime Minister has said, help protect our sovereignty, grow our industries, export our energy, and build one strong Canadian economy.\u201d<\/p>\n<p><strong>Loan Facilities<\/strong><\/p>\n<p align=\"justify\">The Facilities will be provided proportionately by the federal and provincial governments as follows:<\/p>\n<ul type=\"disc\">\n<li>C$100 million \u2013 Third lien secured tranche, ranking junior to Algoma\u2019s existing first lien revolving facility and second lien secured notes; and<\/li>\n<li>C$400 million \u2013 Unsecured tranche, subject to the issuance of 6.77 million common share purchase warrants, with each warrant being exercisable for one common share of Algoma at an exercise price of C$11.08 for a 10-year term, vesting proportionately as unsecured draws are made.<\/li>\n<\/ul>\n<p align=\"justify\">The Facilities will have a seven-year term, with interest at CORRA + 200 bps for three years, stepping up by 200 bps each year thereafter.<\/p>\n<p align=\"justify\">The exercise price of the warrants is equivalent to the volume-weighted average trading price of Algoma\u2019s common shares on the TSX from the completion of its going-public transaction in October 2021 through November 1, 2024, which was prior to the U.S. Administration\u2019s announcement of its intention to impose new tariffs on Canadian steel. The warrants align the governmental support for Algoma with the Company\u2019s long-term value creation strategy and its ongoing transformation and long-term growth trajectory.<\/p>\n<p align=\"justify\">The Facilities will include customary positive and negative covenants, including a restriction on capital distributions. Algoma\u2019s access to the Facilities is subject to several conditions, including the completion of definitive loan documentation and the receipt of all necessary approvals under the Company\u2019s first lien revolving facility.<\/p>\n<p><strong>Operational Adjustments in Response to Market Conditions<\/strong><\/p>\n<p align=\"justify\">Alongside securing this financing, Algoma is adjusting production to better align with prevailing demand and market dynamics. The continuation of Section 232 tariffs has effectively closed the U.S. market to Canadian steel, undermining Algoma\u2019s cross-border business model and requiring the Company to focus on products with reliable domestic demand.<\/p>\n<p align=\"justify\">The tariffs have made continued operation of the Company\u2019s blast furnace and coke ovens unsustainable. Accordingly, Algoma will begin to exit these primary operations as it accelerates its transition to Electric Arc Furnace (\u201cEAF\u201d) steelmaking. The Company now expects that the final aggregate cost of completion of the EAF project will be approximately C$987 million. Going forward, Algoma intends to focus production on as-rolled and heat-treated plate, along with select coil products predominantly for the Canadian market. These adjustments are expected to enable Algoma to:<\/p>\n<ul type=\"disc\">\n<li>supply Canadian industries with high-quality as-rolled and heat-treated plate;<\/li>\n<li>provide stability for continued investment in diversification projects aligned with Canada\u2019s evolving needs; and<\/li>\n<li>reinforce Algoma\u2019s role in supporting Canada\u2019s infrastructure, manufacturing, defense, and nation-building priorities.<\/li>\n<\/ul>\n<p align=\"justify\">\u201cThe government\u2019s financial support underscores their recognition of Algoma\u2019s critical role in Canada\u2019s industrial base, and demonstrates their willingness to provide direct support for our Company through this transition,\u201d said Mr. Garcia.<\/p>\n<p align=\"justify\">\u201cBy combining essential liquidity with targeted support for our transition to EAF steelmaking, this support allows us to move forward with confidence \u2014 aligning operations with market realities, advancing the EAF strategy, and safeguarding Algoma\u2019s future,\u201d said Mr. Marwah.<\/p>\n<p><strong>About Algoma Steel Group Inc.<\/strong><\/p>\n<p align=\"justify\">Based in Sault Ste. Marie, Ontario, Canada, Algoma is a fully integrated producer of hot and cold rolled steel products including sheet and plate. Driven by a purpose to build better lives and a greener future, Algoma is positioned to deliver responsive, customer-driven product solutions to applications in the automotive, construction, energy, defense, and manufacturing sectors. Algoma is a key supplier of steel products to customers in North America and is the only producer of discrete plate products in Canada. Its state-of-the-art Direct Strip Production Complex (\u201cDSPC\u201d) is one of the lowest-cost producers of hot rolled sheet steel (\u201cHRC\u201d) in North America.<\/p>\n<p align=\"justify\">Algoma is on a transformation journey, modernizing its plate mill and adopting electric arc technology that builds on the strong principles of recycling and environmental stewardship to significantly lower carbon emissions. Today Algoma is investing in its people and processes, working safely, as a team to become one of North America&#8217;s leading producers of green steel.<\/p>\n<p align=\"justify\">As a founding industry in their community, Algoma is drawing on the best of its rich steelmaking tradition to deliver greater value, offering North America the comfort of a secure steel supply and a sustainable future.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Algoma Steel Group Inc.\u00a0today (September 29, 2025) announced the execution of binding term sheets to secure C$500 million in liquidity support, comprising C$400 million loan facilities from the Government of &#8230;<\/p>\n","protected":false},"author":3,"featured_media":35858,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"footnotes":""},"categories":[76],"tags":[],"class_list":["post-77339","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-northern-ontario"],"publishpress_future_action":{"enabled":false,"date":"2026-04-15 08:43:15","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/posts\/77339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/comments?post=77339"}],"version-history":[{"count":1,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/posts\/77339\/revisions"}],"predecessor-version":[{"id":77340,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/posts\/77339\/revisions\/77340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/media\/35858"}],"wp:attachment":[{"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/media?parent=77339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/categories?post=77339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wawa-news.com\/index.php\/wp-json\/wp\/v2\/tags?post=77339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}