A Canadian judge approved Friday a transition plan that will allow US Steel Corp. to divest its Canadian operations.
Under the agreement, US Steel must still provide critical services to US Steel Canada Inc. for a period of up to 24 months, including all service and arrangements US Steel Canada requires or relies upon for its business affairs, including suppliers, customers, management, board of directors and employees, according to the agreement.
Additionally, US Steel agreed to facilitate a transition by US Steel Canada to dealing independently with automotive customers in 2016 and beyond, as well as fund the payment of the remaining 2015 pension funding contributions for US Steel Canada. US Steel Canada, meanwhile, agreed to suspend pension funding contributions, payments of post-employment health benefits, and property tax payments.
"Given that USS has indicated it is no longer interested in being a purchaser of USSC, the Transition Arrangements represent an important cooperative step towards an independent USSC and is a beneficial compromise in light of the unknown outcomes," said William Aziz, chief restructuring officer for US Steel Canada, in an Ontario Superior Court filing.