Steelmaker Algoma files for bankruptcy protection amid metals slump

TORONTO – Steel producer Essar Steel Algoma Inc. says it will seek bankruptcy protection as it deals with a continued slump in the price of steel.

The company has filed requests with Canadian and U.S. courts as it seeks to restructure its long-term debt, and has raised US$200 million from a group of investors led by Deutsche Bank to fund ongoing operations.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Sign up for weekly money newsletter Sign Up

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Essar Steel Algoma is the second-biggest steel producer in Canada and the largest employer in Sault Ste. Marie, Ont., with close to 3,000 employees.

MORE: OECD warns trade slowdown points to world recession danger

The company is a subsidiary of India-based global conglomerate Essar Steel.

In 2013, Essar Steel Algoma won a battle against organized labour when the Ontario government approved a new rule that allowed it to lower its pension contributions, which the company said had become unsustainable.