Essar Global investors, others express intent to buy Essar Algoma

Tue Jul 12, 2016 1:39pm EDT
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July 12 (Reuters) - A group that includes shareholders of Essar Global said it signed a letter of intent with a local unit of the United Steelworkers Union to negotiate a deal to buy Essar Steel Algoma Inc for about $900 million.

Essar Global said in a statement last month that it did not support a deal to sell Essar Steel Algoma's assets to a consortium formed by private equity firm KPS Capital Partners.

Algoma, bought nearly a decade ago by Indian energy and resources conglomerate Essar Global, had put itself up for sale while operating under creditor protection.

Ontario Steel Investment Ltd, the group that includes shareholders of Essar Global, said on Tuesday it would assume Algoma's pension and benefit liabilities as part of the agreement.

Ontario Steel said it would also pay outstanding taxes owed to the city of Sault Ste. Marie, where Algoma is based, within six months of a change in ownership. (Reporting by Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta)