Stelco Holdings Inc. said June 5 that its Stelco Inc. subsidiary completed the acquisition of approximately 760 acres and 2,300 acres, respectively, in Hamilton and Nanticoke, Ontario, that are beneficially owned by Legacy Lands LP.
The Canadian steelmaker will pay C$114 million for the land, which will be funded by a 25-year, 8%-per-annum mortgage note issued to Legacy Lands. An existing lease agreement between Stelco and Legacy Lands was terminated concurrent to the transaction's closing.
Meanwhile, Stelco entered into an amended pensions benefit funding agreement that reduced its exposure to fluctuations in future funding requirements and provided the independent employee life and health trusts with a fixed funding commitment from the steelmaker.
Under the amended agreement, Stelco will put up an average of C$33 million per year in the first 10 years, which will be reduced to C$30 million per year in the following 10 years, then to C$15 million per year in the last five years.
The funding deal and mortgage note payments will result in up to C$87 million in savings. In November 2017, Stelco completed an IPO to list in Canada after it raised C$230 million.
