Some questions and thoughts I have after I  read the article from August 31 and the article that just came out.

(1)   Has Coutts met with the lenders (Bain Capital and Goldentree Asset management ..yet?

(2)   How does the march 2018 extension affect Noront’s smelter choice?

(3)   Tom Clarke from Make Algoma Great Again(MAGA) was given until Sept.8 to revise his proposal. He did not meet the deadline but asked for an extension. Will he get this extension?

(4)   The unions have also written to the creditors, Tom Clarke and an unknown entity referred to as Party #2, indicating conditions on which the unions would meet to discuss their interest in Algoma and renewal of the unions’ collective agreements. 
Until recently, those negotiations have been at a standstill

Point #4 above tells us there is progress.

Early this year in March…”Negotiations with the two union locals reached an impasse in early December and the Superior Court ordered them into mediation before Warren K. Winkler, former Chief Justice of Ontario.

Court-ordered mediation involving Essar Algoma, the United Steelworkers, retirees and term lenders who want to buy the company started on March 23 and was suspended by Winkler on March 30 for the time being.”

(5)   It appears the unions are now willing to discuss their interest in Algoma and renewal of the unions collective agreement with the lenders….

The pressure of being potentially excluded from a smelter appears to have made some progress.

http://www.saultstar.com/2017/08/31/noront-awaiting-algomas-ccaa-outcome

Provenzano has even offered to arrange for an introduction between Noront and the term lenders.

Coutts said he hasn’t spoken with the term lenders yet and continues working with EDC representatives.

The issue hasn’t reduced the city’s status for the project, he said.

“Sault Ste. Marie, obviously, is very much in the mix. If it wasn’t we wouldn’t be spending this effort trying to understand how the CCAA process is going to unfold,” he said.

Coutts said everyone has been very supportive of the development in Sault Ste. Marie “and that’s great but ultimately if there are new owners that take over those lands, how do we know that the new owner is willing to go forward with us on that planned purchase or lease. That’s really the heart of the matter there….

While initial timelines had suggested the RFP packages would be released to municipalities and a ferrochrome plant location determined by the end of summer, Coutts said that package won’t be released until later this year.

“I can’t say when because we are awaiting the certainty of the SSM site but we really are hoping to have things wrapped up by year end,” he said.

http://www.saultstar.com/2017/09/27/city-gets-more-tax-money-from-algoma

City gets more tax money from Algoma

By Elaine Della-Mattia, Sault Star

Wednesday, September 27, 2017 4:42:52 EDT PM

The City of Sault Ste. Marie will receive $500,000 per month in property tax payments from Algoma. 
The city requested an increase in the payments to keep the steelmaker in good standing on a go-forward basis, said CAO Al Horsman. 
The increased payments became effective in August and are reported in the 36th report of the monitor overseeing Algoma’s Companies’ Creditors Arrangement Act proceedings. 
The change, officially approved by a judge Wednesday, will allow for the monthly payments to continue until March 31, 2018. That date has also been approved as a new extension date for a stay of proceedings while the restructuring efforts continue.
Horsman said the increased payments are a sign of good faith from the creditors attempting to purchase Algoma and tie back to an agreement in principle reached between the city and the creditors. 
“The $500,000 puts them in good standing for the go-forward,” Horsman said. 
The tax payment agreement will not be made public until a final sales transaction is complete and approved by the courts, ending the CCAA process, assuming the creditors are the successful purchasers of the steel plant. 
The agreement ultimately deals with Algoma’s pre-filing and post-filing tax bills as well as how tax payments will proceed on a go-forward basis, Horsman said. 
The increase is not to play “catch up” for the August tax bill per se, Horsman said, but instead part of the agreement in principle, the details of which cannot yet be released. 
Algoma’s 2017 tax bill is $6.5 million.  It had been adjusted for 2017 as a result of an assessment change, coupled with capping and clawback provisions. 
Algoma’s assessed property value has decreased from $89 million to $39 million, resulting in a lower tax bill.
A motion to stay the assessment appeal application by Algoma has been filed with the court and agreed upon by MPAC until at least the new year, Horsman said. 
Renewing that application could be dependent on any conditions agreed upon or imposed by the court during the final sales transaction. 
Algoma’s tax issue won’t complicate the city’s budget process because it’s more of a cash flow issue, not a budget issue, he said. 
Assessment appeals and their differences are taken into effect with a reserve account specifically dedicated to dealing with assessment appeal rulings, Horsman said. 
“We’re looking for a positive outcome from the CCAA process,” Horsman added. 
Earlier this summer, the city reached a deal with creditors who want to purchase Algoma.
Algoma owes the city $14 million in pre-filing tax bill and more than $12 million in post-filing property tax bills. 
Meanwhile, court documentation also states that MAGA (Make Algoma Great Again) engaged in an agreed-upon due diligence process, but Tom Clarke did not submit a revised proposal by the Sept. 8 deadline. Instead, he requested an extension for submitting a proposal. 
It’s also reported that another interested party, referred to in the court documents as Party #1, raised interest in August in potentially acquiring or making an investment in Algoma but has now withdrawn. 
The unions have also written to the creditors, Tom Clarke and an unknown entity referred to as Party #2, indicating conditions on which the unions would meet to discuss their interest in Algoma and renewal of the unions’ collective agreements. 
Until recently, those negotiations have been at a standstill. 
Court records indicate that MAGA submitted two purchase proposals to the creditor group but both were deemed unacceptable.   
“I also understand that Tom Clarke is involved in advancing a bid for Essar Steel Minnesota LLC’s assets in the company’s Charter 11 proceedings and, recently, his acquisition company requested a further extension from the U.S. Bankruptcy Court in order to obtain financing to fund the acquisition,” the documents read.  
“The recapitalization transaction continues to represent Algoma’s best and only viable prospect to continue as a going concern enterprise for the benefit of all of Algoma’s stakeholders,” an affidavit by John Strek, the court appointed chief restructuring advisor, states. 
The deal, if completed, would reduce Algoma’s debt by about $1.2 billion, provide new financing of about US$425 million to fund operations and CCAA exit costs and provide sufficient liquidity to fund capital expenditures over the next five years, he says in his affidavit.