Help Desk -
9717405332, 9599714297, 9810335381
Email
Password

Stelco Holding revs engines for turnaround under CEO with magic

Steel News - Published on Thu, 07 Dec 2017

Image Source: The Star
The Star reported that winter is coming and Stelco Holdings Inc’s steel plant on the Canadian shore of Lake Erie is stocking up for the stormy months ahead. Iron ore from Minnesota and Appalachian coal are streaming off ships on conveyor belts toward the blast furnace and coke ovens. Behind the docks, 25-ton coils of steel are lined up for shipment, still radiating heat three days after they were produced.

After decades of crisis, a renewed sense of purpose has settled over the 107 year old company, which just completed the first initial public offering of a North American steelmaker in seven years. The question hanging over the reinvigorated enterprise is whether Stelco is finally on the cusp of sustained profitability, or whether it will wilt in an industry dominated by global giants and cheap Asian producers.

In the pantheon of great Canadian corporate names, Stelco doesn’t exactly scream confidence. The Hamilton-based Steel Company of Canada was once the country’s biggest producer, with a workforce of 25,000 in the 1970s.

It’s since gone through two stints in creditor protection while it struggled with operating losses, bitter labour relations, high debts and pension deficits. Its most recent owner, US Steel Corp, plucked some of Stelco’s best contracts and abandoned what was left of the company in 2015. Ahead, the winter freeze is the least of its worries as protectionist moves in the US threaten to restrain its ability to expand in North America.

Meet Alan Kestenbaum, the 55-year-old Brooklyn-born turnaround artist who’s now Stelco’s principal owner and chief executive. Where others see a picked-over carcass, Kestenbaum sees an agile global player. Where some see old facilities and a potentially fractious workforce, Kestenbaum talks up unused capacity, strategic locations on the Great Lakes and fixable labour relations.

Investors seem willing to give him the benefit of the doubt, for now. Stelco’s stock is up almost 13 per cent since the company’s USD 17-a-share early-November IPO, giving it a market value of about USD 1.7 billion. Bank of Montreal analyst Mr David Gagliano initiated coverage with an outperform rating and a price target of $23, saying that “Stelco represents a compelling investment vehicle within the North American steel sector.”

Purchased through Kestenbaum’s Miami-based private equity firm Bedrock Industries Group LLC in June, Stelco has major advantages over some of its predecessors and competitors.

Source :

Posted By : Rabi Wangkhem on Thu, 07 Dec 2017
Related News from Steel segment