Ontario Superior Court Justice Glenn Hainey has named Algoma Docks GP Inc. as owner of the assets of Port of Algoma Inc.
The port's new owner is a subsidiary of Algoma Steel Inc., another newly created entity that's expected to take over Sault Ste. Marie's steelmaking operations at the end of this month from Essar Steel Algoma Inc.
The port's assets, as listed by Judge Hainey in an approval and vesting order signed in Toronto, include the Sault's steel and ore docks, associated buildings and equipment including ore dock cranes, coal scrapers, ship loading conveyors and a bulldozer.
Also included are commercial, sawmill and export docks including sunken freighters used as docks at Area 16.
The deal specifically excludes the port's cargo-handling and shared services agreements with the steel mill.
The order was requested by GIP Primus LP and Brightwood Loan Services LLC, major lenders to the port who say they are owed US$198 million in accrued principal and interest.
Until now, Port of Algoma has been owned 99 per cent by Essar Algoma's former ultimate parent company (Essar Global Fund Ltd.) and one per cent by the City of Sault Ste. Marie.
Last week, Justice Hainey ordered Port of Algoma Inc. into receivership under subsection 243(1) of the Bankruptcy and Insolvency Act, which allows a secured creditor to "take possession of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt."
GIP and Primus asked for a receivership order "for the limited purpose of executing the necessary documents to effect the transfer of the port and in order to obtain a vesting order to vest the port assets to the port subsidiary."
The receivership application was supported by Essar Steel Algoma Inc., the court-appointed monitor and the consenting creditors expected to acquire Algoma's assets on Nov. 30.
Here's how the deal is supposed to go down:
- Algoma will convey the port lands and its landlord interest in the port lease to the buyer, controlled by a consortium of the steelmaker's consenting creditors
- Port of Algoma will convey the port assets, including its leasehold interest in the port lease, to Algoma Docks
- Algoma Docks will sublease the port lands and assets to the buyer to enable the buyer to access and operate the port
Justice Hainey emphasized that his approval of Algoma Docks GP Inc. as the new dock owners "shall be binding on any trustee in bankruptcy or receiver that may be appointed in respect of Port of Algoma Inc."
Any financial considerations involved in the dock acquisition have so far not been disclosed.
This story originally appeared on SooToday.com.
