Algoma Steel Completes $500 Million Government Financing Transaction

Core Viewpoint - Algoma Steel Group Inc. has successfully completed a $500 million financing transaction with the Governments of Canada and Ontario to support its Electric Arc Furnace (EAF) transformation and enhance financial flexibility [1][4]. Financing Details - The financing consists of $400 million from the Canada Enterprise Emergency Funding Corporation (CEEFC) and $100 million from the Province of Ontario, with specific secured tranches included [2]. - Algoma issued 6.77 million common share purchase warrants to CEEFC and Ontario, each exercisable for one common share at an exercise price of $11.08 for a 10-year term [2]. Strategic Importance - The seven-year facilities are designed to strengthen Algoma's balance sheet and provide financial flexibility as the company advances its EAF transformation and seeks to diversify its business [3]. - The financing is expected to support operational efficiency, cash generation, and the company's plate-first commercial strategy [4]. Environmental Commitment - Algoma's transition to EAF technology is part of one of North America's largest industrial decarbonization initiatives, aiming to reduce carbon emissions by approximately 70% once fully transitioned [8]. - The new brand Volta™ will represent all steel produced through Algoma's EAF technology, emphasizing lower emissions and sustainable production [9]. Industry Position - Algoma is positioned as a leading Canadian producer of high-quality plate and sheet steel products, supporting critical sectors such as energy, defense, automotive, shipbuilding, and infrastructure [6]. - The company is committed to building a greener future and strengthening domestic supply chains through its modernization efforts [7].