U. S. Steel Canada commences sale and restructuring/recapitalization process

HAMILTON, ON, April 10, 2015 /PRNewswire/ - U. S. Steel Canada Inc. ("U. S. Steel Canada" or "USSC") obtained an initial order (as amended and restated, the "Initial Order") under the Companies' Creditors Arrangement Act (Canada) ("CCAA") from the Ontario Superior Court of Justice, Commercial List (Toronto) (the "Court") on September 16, 2014. Ernst & Young Inc. ("EY" or the "Monitor") was appointed by the Court as the Monitor of USSC. Pursuant to the Initial Order, USSC is authorized to pursue all avenues of a sale or refinancing of its business or property, in whole or part, subject to prior approval of the Court. In this regard, USSC is commencing a sale and restructuring/recapitalization process (the "SARP") pursuant to a Court order dated April 2, 2015 (the "SARP Order").

USSC is a two-site leading integrated steel producer whose assets include blast furnace operations, coke ovens, steelmaking facilities, and hot-rolling, pickling, cold-rolling, and galvanizing lines. In addition to the currently operating assets, USSC assets include certain idled production equipment which could be restarted.

The SARP is intended to solicit interest in and opportunities for a sale, restructuring or recapitalization of USSC's assets and business operations (the "Opportunity"). The Opportunity may include one or more of a restructuring, recapitalization or other form of reorganization of the business and affairs of USSC as a going concern, or a sale of all, substantially all, or one or more components of USSC's assets (the "Property") and business operations (the "Business") including, without limitation:

• USSC's 813 acres of real property located on Hamilton Harbour in Hamilton, Ontario (the "Hamilton Lands"), and coke ovens, assets used for ironmaking, steelmaking and finishing, and other operating assets and business operations located in Hamilton, Ontario ("Hamilton Works"); and
• USSC's 6,600 acres of real property located in Nanticoke, Ontario, coke ovens, assets used for ironmaking and steelmaking, hot-rolling, pickling, and other operating assets and business operations located in Nanticoke, Ontario ("Lake Erie Works").

In summary, the SARP will consist of two phases. In Phase 1, parties who have entered into a non-disclosure agreement ("NDA") in the form provided by USSC or otherwise acceptable to the Financial Advisor, USSC and the Monitor with USSC, as outlined below, will be provided with information considered relevant to the Opportunity (the "Confidential Information Package") and the opportunity to submit a non-binding letter of interest ("LOI") by May 20, 2015 offering to (i) acquire all, substantially all or a portion of the Property, or (ii) make an investment in, restructure, reorganize or refinance the Business. As outlined in the SARP Order, parties that have submitted Qualified LOIs, have a bona fide interest in completing a sale proposal or investment proposal with USSC and have the financial capability to consummate such a transaction may be invited to participate in Phase 2 of the SARP, which will include detailed due diligence and access to a confidential data room. The SARP Order provides further details on the SARP.

Any party who wishes to participate in the SARP (a "Potential Bidder") must provide to USSC's financial advisor, Rothschild Inc. (the "Financial Advisor"), an NDA executed by it and a letter setting forth the identity of the Potential Bidder, the contact information for such Potential Bidder and full disclosure of the direct and indirect principals of the Potential Bidder. Parties who wish to participate in the SARP process should contact USSC's Financial Advisor at [email protected] to receive an NDA.  The SARP will also be subject to the supervision of the Monitor.

A Potential Bidder (who delivers the executed NDA and letter as set out above) will be deemed a "Phase 1 Qualified Bidder" if USSC and the Financial Advisor, in their reasonable business judgement, in consultation with and with the approval of the Monitor, determine such person is likely, based on the availability of financing, experience and other considerations, to be able to consummate a sale, restructuring or recapitalization transaction pursuant to the SARP.

Phase 1 Qualified Bidders will be provided with the Confidential Information Package. The Financial Advisor, USSC, the Monitor and their respective advisors make no representation or warranty as to the information contained in the Confidential Information Package or otherwise made available pursuant to the SARP or otherwise, except to the extent expressly contemplated in any definitive sale or investment agreement with a successful bidder ultimately executed and delivered by USSC.

Full details of the SARP can be found in the SARP Order on the Ernst & Young Inc. Restructuring Document Centre: www.ey.com/ca/ussc under the "SARP Materials" tab.

For further information with respect to the SARP, interested parties may contact either the Financial Advisor or the Monitor as set out below:

U. S. Steel Canada continues to carry on business as usual while it develops and implements comprehensive restructuring solutions. Ernst & Young Inc., as the Court-appointed Monitor continues to oversee the business and financial affairs of the company during the CCAA process. More information relevant to the restructuring process is available on the Monitor's website at www.ey.com/ca/USSC and additional information will be posted as it becomes available.

About U. S. Steel Canada Inc.

U. S. Steel Canada's operations are located at Lake Erie Works, a fully integrated steelmaking facility and at Hamilton Works, home to cokemaking and finishing operations including our premier zinc-coating facility, the world-class Z-Line. U. S. Steel Canada has the capability of producing approximately 2.6 million tons of steel annually and employs approximately 2,000 people.

SOURCE U.S. Steel Canada Inc.

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