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 strengthen its balance sheet and support its transition to Electric Arc Furnace (EAF) technology [1][2][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 has issued 6.77 million common share purchase warrants to CEEFC and Ontario, each exercisable at an exercise price of $11.08 for a 10-year term [2]. Strategic Importance - The seven-year facilities enhance Algoma's financial flexibility as it advances its EAF transformation and seeks to diversify its business [3]. - The financing is seen as a reinforcement of the partnership between Algoma and the government, enabling the company to navigate current market conditions effectively [4]. Operational Focus - The company plans to draw from the secured tranche first to provide immediate liquidity for operations and near-term transformation milestones [4]. - Algoma aims to maintain operational efficiency and cash generation while focusing on its plate-first commercial strategy [4]. Environmental Commitment - The transition to EAF technology is part of one of North America's largest industrial decarbonization initiatives, expected to reduce carbon emissions by approximately 70% [8]. - Algoma is committed to producing steel sustainably, with its new brand Volta representing steel made through EAF technology with significantly lower emissions [9]. Company Overview - Algoma Steel Group Inc. is a leading Canadian producer of high-quality plate and sheet steel products, supporting critical sectors such as energy, defense, automotive, shipbuilding, and infrastructure [7]. - The company is focused on building a greener future and shaping sustainable steelmaking in Canada [7].