Algoma Steel Group Inc. (NASDAQ:ASTL) Q4 2022 Earnings Conference Call June 15, 2022 11:00 AM ET Company Representatives Michael McQuade - Former Chief Executive Officer, Current Board Member Michael Garcia - New Chief Executive Officer Rajat Marwah - Chief Financial Officer Michael Moraca - Treasurer, Investor Relations Officer Conference Call Participants David Gagliano - BMO Capital Markets David Ocampo - Cormark Securities Anoop Prihar - VIII Capital Ahmad Shaath - Beacon Securities Alexander Jackson - ...

Algoma Steel Group Inc. (NASDAQ:ASTL) Q3 2022 Earnings Conference Call February 11, 2022 11:00 AM ET Company Participants Michael Moraca - Treasurer and IRO Michael McQuade - CEO Rajat Marwah - CFO Conference Call Participants David Gagliano - BMO Capital Markets David Ocampo - Cormark Securities Anoop Prihar - VIII Capital Kirk Ludtke - Imperial Capital Operator Greetings. Welcome to the Algoma Steel Third Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. A question-and-an ...

[Explanatory Note](index=4&type=section&id=Explanatory%20Note) This section details the consummation of the business combination between Algoma Steel Group Inc. and Legato Merger Corp. on October 19, 2021, resulting in approximately US$306 million in proceeds for Algoma - On **October 19, 2021**, Algoma Steel Group Inc. completed its merger with Legato Merger Corp., with Legato surviving as a wholly-owned subsidiary of Algoma before being dissolved[10](index=10&type=chunk)[13](index=13&type=chunk) - A concurrent PIPE investment raised approximately **$100 million** from the sale of 10,000,000 shares at $10.00 per share[13](index=13&type=chunk) - The combined transactions, after redemptions and expenses, provided approximately **US$306 million** in proceeds to Algoma[13](index=13&type=chunk) - Algoma's Common Shares and Warrants are listed on Nasdaq under symbols "**ASTL**" and "**ASTLW**" and on the TSX under "**ASTL**" and "**ASTL.WT**"[14](index=14&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns investors that the report contains forward-looking statements subject to numerous risks and uncertainties, including those related to the merger, steel prices, and the EAF transformation - The report includes forward-looking statements concerning business plans, financial performance, and the effects of the recent merger[15](index=15&type=chunk) - Key risks highlighted include failure to realize merger benefits, volatility in steel prices, competition from low-priced imports, and challenges in the planned transformation to EAF steelmaking[16](index=16&type=chunk)[17](index=17&type=chunk) - The company's ability to secure Green Steel Funding, source scrap metal, and manage under-funded pension plans are also cited as significant uncertainties[16](index=16&type=chunk)[17](index=17&type=chunk) - Investors are cautioned not to place undue reliance on these statements, which are subject to risks detailed in the "Risk Factors" section of the Proxy Statement/Prospectus[18](index=18&type=chunk) [PART I](index=7&type=section&id=PART%20I) This section provides comprehensive information on the company's corporate structure, key financial data, and public listing details [Identity of Directors, Senior Management and Advisers](index=7&type=section&id=Item%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers) This section identifies the company's leadership and external advisers following the merger, including new board appointments and legal and auditing firms - On **October 21, 2021**, Mary Anne Bueschkens, Gale Rubenstein, and James Gouin were appointed as new directors to the board[21](index=21&type=chunk) - The company's legal advisers are Goodmans LLP and Lawson Lundell LLP for Canadian law, and Paul, Weiss, Rifkind, Wharton & Garrison LLP for U.S. securities law[26](index=26&type=chunk) - Deloitte LLP serves as the company's independent registered public accounting firm for the fiscal years ended March 31, 2019, 2020, and 2021[27](index=27&type=chunk) [Key Information](index=8&type=section&id=Item%203.%20Key%20Information) This section provides key financial data and risk factor information, presenting a pro forma combined consolidated capitalization table as of June 30, 2021 Pro Forma Combined Consolidated Capitalization (as of June 30, 2021) | Category | Amount (C$ in millions) | | :--- | :--- | | Cash and cash equivalents | $ 410.1 | | Total indebtedness | 1,760.7 | | Total equity | 324.8 | | **Total capitalization** | **$ 2,085.5** | - Selected historical financial data and risk factors related to the business are not detailed here but are incorporated by reference from the company's Proxy Statement/Prospectus[29](index=29&type=chunk)[32](index=32&type=chunk) [Information on the Company](index=9&type=section&id=Item%204.%20Information%20on%20the%20Company) This section outlines Algoma's corporate history, business, and structure, confirming its status as a 'foreign private issuer' under SEC regulations - The company is a 'foreign private issuer' and is exempt from certain SEC rules, such as proxy statement regulations and Section 16 'short-swing' profit recovery provisions[34](index=34&type=chunk) Organizational Structure | Name | Country of Incorporation | Percentage Ownership | | :--- | :--- | :--- | | Algoma Steel Holdings Inc. | Canada | 100% | | Algoma Steel Intermediate Holdings Inc. | Canada | 100% | | Algoma Steel Inc. | Canada | 100% | | Algoma Docks GP Inc. | Canada | 100% | | Algoma Steel USA Inc. | United States | 100% | | Algoma Docks Limited Partnership | Canada | 100% | - Detailed information on the company's history, business overview, and property is incorporated by reference from the Proxy Statement/Prospectus[33](index=33&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) [Major Shareholders and Related Party Transactions](index=11&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section details the beneficial ownership of Algoma's common shares as of October 19, 2021, identifying four major shareholders owning more than 5% of the company - Beneficial ownership is based on **112,074,095** Algoma Common Shares outstanding as of October 19, 2021[49](index=49&type=chunk) Major Shareholders (5% Holders) | Name of Beneficial Owner | Percentage of Algoma Common Shares | | :--- | :--- | | Bain Capital LP | 12.7% | | Barclays Bank PLC | 10.3% | | Contrarian Capital Management, L.L.C. | 5.4% | | GoldenTree Asset Management LP | 5.1% | - Ownership for key directors and officers includes Michael McQuade (CEO) at **1.1%**, Brian Pratt (Director) at **3.6%**, Eric S. Rosenfeld (Director) at **1.9%**, and David D. Sgro (Director) at **1.1%**[52](index=52&type=chunk) [Financial Information](index=13&type=section&id=Item%208.%20Financial%20Information) This section states that the company's consolidated financial statements are provided in Item 18 and confirms no material legal proceedings are currently underway - The company's audited consolidated financial statements are incorporated by reference and can be found in Item 18[56](index=56&type=chunk) - Algoma is not currently involved in any material legal proceedings[57](index=57&type=chunk) [The Offer and Listing](index=14&type=section&id=Item%209.%20The%20Offer%20and%20Listing) This section provides details on the public trading of Algoma's securities, including dual listings on Nasdaq and TSX, and warrant exercise terms - Algoma Common Shares and Warrants are dual-listed on the Nasdaq and the Toronto Stock Exchange (TSX)[60](index=60&type=chunk)[61](index=61&type=chunk) - There are **24,179,000** Algoma Warrants outstanding, exercisable 30 days after the merger (November 18, 2021) at an exercise price of **$11.50** per share[63](index=63&type=chunk) - The company must maintain compliance with Nasdaq listing requirements, including having at least **400** round lot holders for common shares, to avoid delisting[60](index=60&type=chunk)[64](index=64&type=chunk) [Additional Information](index=15&type=section&id=Item%2010.%20Additional%20Information) This section covers various corporate and legal matters, including share authorization, Canadian exchange controls, and the company's dividend policy - The company is authorized to issue an unlimited number of common shares and preferred shares, without par value[67](index=67&type=chunk) - Algoma has not paid any dividends and has not established a dividend policy, with future payments at the discretion of the board[72](index=72&type=chunk) - There are no Canadian laws or regulations restricting the export or import of capital or the remittance of dividends to non-resident shareholders, apart from withholding tax requirements[70](index=70&type=chunk) [PART II](index=17&type=section&id=PART%20II) This section of the report is marked as not applicable - Part II of the Form 20-F is not applicable to this filing[78](index=78&type=chunk) [PART III](index=18&type=section&id=PART%20III) This section contains the company's financial statements and a comprehensive list of exhibits filed with the report [Financial Statements](index=18&type=section&id=Item%2018.%20Financial%20Statements) This section serves as the repository for the company's financial statements, incorporating audited consolidated statements and attaching unaudited pro forma statements - The audited consolidated financial statements of Algoma Steel Group Inc. are incorporated by reference to pages F-2 to F-44 of the Proxy Statement/Prospectus filed on September 20, 2021[79](index=79&type=chunk) - Unaudited pro forma condensed combined consolidated financial statements for Algoma and Legato Merger Corp. are attached as Exhibit 15.1[79](index=79&type=chunk) [Exhibits](index=19&type=section&id=Item%2019.%20Exhibits) This section lists the exhibits filed with or incorporated by reference into the Form 20-F report, including key corporate and financial documents - Key exhibits include the Agreement and Plan of Merger (4.1), Investor Rights Agreement (4.2), and the Algoma Steel Group Inc. Omnibus Incentive Equity Plan (4.8)[80](index=80&type=chunk) - Financial documents filed as exhibits include the Unaudited Pro Forma Condensed Combined Financial Statements (15.1) and consents from auditors Deloitte LLP (15.2) and WithumSmith+Brown, PC (15.3)[80](index=80&type=chunk)