The financing is considered critical for accelerating the company’s electric arc furnace (EAF) transition and strengthening its balance sheet.
According to the company, USD 400 million of the package was provided by the Canada Enterprise Emergency Funding Corporation (CEEFC), a subsidiary of the Canada Development Investment Corporation (CDEV), while the remaining USD 100 million came from the Province of Ontario. Both financing components include secured tranches: USD 80 million for CEEFC and USD 20 million for Ontario.
As part of the financing, Algoma issued a total of 6.77 million common share purchase warrants to CEEFC and Ontario. The warrants, exercisable for 10 years at USD 11.08 per share, will vest in proportion to the unsecured amounts drawn.
“Government support strengthens our EAF transition”
Algoma Steel CEO Michael Garcia emphasized the importance of the agreement:
“Completing this financing reinforces our strong collaboration with government and enables us to confidently advance our EAF transition amid current market conditions. This support strengthens our long-term financial flexibility.”
CFO Rajat Marwah said the financing aligns with the company’s strategic priorities:
“Finalizing these facilities marks an important step in executing our financial strategy. The new capital will allow us to focus on operational efficiency, cash generation, and our commercial strategy.”
Liquidity strengthens, transition accelerates
Algoma plans to initially access the secured tranches to meet short-term operational needs and support the EAF transition.
The government-backed financing is viewed as a significant step toward strengthening Canada’s domestic supply chains, accelerating industrial decarbonization, and building a competitive steel sector.
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