Steam billows from a stack at the U.S. Steel Canada plant in Hamilton in this file photo taken March 4, 2009.MIKE CASSESE/Reuters
It's déjà vu all over again in the restructuring of what was once Stelco Inc.
Lawyers dealing with the struggling steel maker, now owned by U.S. Steel, are facing the task of doing once again what they already did a few years ago.
Last time the steel maker ended up in creditor protection, in a restructuring that took from 2004 to 2006, the lawyers spent many hours dividing the company into bits. They split the company's businesses into separate entities, the goal being to make it easier to sell the individual mills if the business went sour. So the Hilton Works in Hamilton, laden with liabilities, went into one bucket. The Nanticoke mill, much more modern and valuable, went into another. It was all still owned by the parent, but easy to parcel out if need be.
But then along came U.S. Steel, which bought Stelco in 2007. And it undid all that work subsequently, putting the egg back together again. It likely would make the company easier to run, but could cause trouble should the Canadian operations get in trouble again.
And they have. And how. U.S. Steel has put its Canadian operations into creditor protection. It would like to sell them and the Nanticoke business seperately. So the lawyers are back at it, billing again for what they did once years ago – splitting the business into separate entities.