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Stelco Holdings Inc. is listed on the TSX under the symbol "STLC"

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Stelco Holdings Inc. and LG Bedrock Holdings LP Announce Secondary Bought Deal Equity Offering

Hamilton, Ontario (May 26, 2021) – Stelco Holdings Inc. (“Stelco” or the “Company”) (TSX: STLC) and LG Bedrock Holdings LP (the “Selling Shareholder”) have announced today that BMO Capital Markets (the “Underwriter”) has agreed to buy from the Selling Shareholder on a bought deal basis 5,800,000 common shares of the Company (“Common Shares”), at a price of C$33.00 per Common Share for gross proceeds of C$191,400,000 to the Selling Shareholder (the “Offering”). The Selling Shareholder has granted the Underwriter an option, exercisable at the same price for a period of 30 days following the closing of the Offering, to purchase up to an additional 15% of the Offering to cover the Underwriter’s over-allocation position, if any, and consequent market stabilization. The Offering is expected to close on or about June 2, 2021 and is subject to certain conditions, including receipt of all necessary regulatory approvals.

Immediately prior to the Offering, Bedrock Industries Coöperatief U.A. (“Bedrock Industries”) held 34,172,315 Common Shares, representing approximately 38.5% of the issued and outstanding Common Shares. Concurrent with the Offering, Bedrock Industries will distribute in kind all of its Common Shares, including the Common Shares comprising part of the Offering, indirectly to the Selling Shareholder and Alan Kestenbaum (or entities beneficially owned by, or under the control or direction of, or other family members not under the control of Alan Kestenbaum). Following the closing of the Offering (assuming no exercise of the over-allotment option), the Selling Shareholder will hold 19,952,236 Common Shares, representing approximately 22.5% of the issued and outstanding Common Shares and Alan Kestenbaum will, directly or indirectly, beneficially own, or have control or direction over, 11,601,651 Common Shares, representing approximately 13.1% of the issued and outstanding Common Shares.

The net proceeds of the Offering will be paid directly to the Selling Shareholder. Neither the Company nor Alan Kestenbaum will receive any proceeds from the Offering.

The Common Shares will be offered in each of the provinces and territories of Canada pursuant to the Company’s base shelf prospectus dated February 11, 2021 and may also be offered by way of private placement in the United States. The terms of the Offering will be described in a prospectus supplement to be filed with Canadian securities regulators. The Underwriter is waiving a lock-up restriction with respect to the Common Shares previously held by Bedrock Industries to be sold in the Offering.

The Common Shares have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Stelco
Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. In addition to being North America's only integrated producer of pig iron, Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products. With first-rate gauge, crown, and shape control, as well as reliable uniformity of mechanical properties, our steel products are supplied to customers in the construction, automotive and energy industries across Canada and the United States as well as to a variety of steel service centres, which are regional distributors of steel products. At Stelco, we understand the importance of our business reflecting the communities we serve and are committed to diversity and inclusion as a core part of our workplace culture, in part, through active participation in the BlackNorth Initiative.

Forward-Looking Information
This release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information may relate to our future outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategy, acquisition, opportunities, budgets, operations, financial results, taxes, dividend policy, plans and objectives of our Company. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances may be forward looking statements. Forward-looking statements are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. The forward-looking statements contained herein are presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, as well as our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes.

Forward-looking information in this news release includes the expected closing of the Offering and the ownership of Common Shares after closing of the Selling Shareholder and Alan Kestenbaum.

Undue reliance should not be placed on forward-looking information. The forward-looking information in this press release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct.

Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements described in the Company’s management’s discussion and analysis for the year ended December 31, 2020 and referred to under the heading “Risk Factors” in the Company’s Annual Information Form dated February 17, 2021 and available on SEDAR at www.sedar.com. The forward-looking statements contained in this release are made as of the date hereof. Stelco undertakes no obligation to update publicly or revise any forward-looking statements, whether written or oral, whether as a result of new information, future events or otherwise, except as required by law.

 

For Further Information
For investor enquiries: Paul D. Scherzer, Chief Financial Officer, (905) 577-4432,
paul.scherzer@stelco.com

For media enquiries: Trevor Harris, Vice-President, Corporate Affairs, (905) 577-4447,
trevor.harris@stelco.com

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