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Algoma shareholder seeks to replace directors

Publication: SBB - Steel Business Briefing

Provider: Steel Business Briefing

Algoma shareholder seeks to replace directors

Canada’s Algoma Steel plans to set a date for a special shareholders’ meeting, after its largest shareholder, New York investment firm Paulson & Co, request the opportunity to nominate its own board of directors, Steel Business Briefing has learned.

Paulson says it plans to nominate a group of independent directors to replace all with the exception of CEO Denis Turcotte and those who are representatives of the United Steelworkers union. Paulson is also asking the board to consider refinancing Algoma’s publicly traded notes and “to bring to shareholders a corporate reorganization in which no less than C$400 million of cash is distributed on a tax efficient basis, in exchange for Algoma shares at a premium to the market price.”

An Algoma spokeswoman tells SBB the company is required under Canadian securities law to set a meeting date within 21 days of a shareholder’s request and that it must be “in a reasonable period” after that request.

She says Algoma’s board already is considering Paulson’s request. “There’s no question we will be meeting with shareholders over the next several weeks to present our views, and our analysis of Paulson’s proposal,” she says.

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