Duferco Notifies Province; Province Honours Pensions

ECONOMIC DEVELOPMENT -Duferco Notifies Province; Province Honours Pensions

Duferco Steel Nova Scotia has notified the province that it does not intend to complete the transaction to purchase Sydney Steel, Economic Development Minister Gordon Balser announced today.

The message was relayed to senior government representatives meeting with Duferco officials in Europe late Wednesday.

"Obviously, we are disappointed," said the minister. "Our goal was always to sell the plant to a private operator and keep people working in Sydney. We were ready for tomorrow's closing date in the hope that the sale would conclude positively."

The minister stated that the province will honour the enhanced pension/severance offer reached with Sysco steelworkers last summer in spite of the failure of Duferco to close the sale. In addition, the offer will be extended to approximately 175 workers who were slated to go to work for Duferco.

"Our priority is to the workers," said the minister. "Steelworkers should not be punished for the sale falling through. We will treat them fairly, while respecting the taxpayers of Nova Scotia."

There is currently about $20 million in Sysco's bank account to cover the cost of including additional workers in the enhanced pension/severance agreement. The province recently hired an administrator to process pension and severance applications in Sydney.

The province will now proceed with the closure of the plant and liquidation of the assets. Ernst & Young, hired by the province to manage the sale process, will re-evaluate the proposals for liquidation and recommend a course of action over the coming weeks.

The plant has not been operational since filling its last order in May. Duferco signed the agreement of purchase and sale with the province last June.