The latest deal involving U.S. Canada is being described as the best news in 12 months, however it may not be a long term solution.
That from McMaster Business professor Marvin Ryder.
The provincial government is backing a bid by Bedrock Industries, and has signed a Memorandum of Understanding with the private equity firm, to buy the troubled steelmaker which remains under court-supervised creditor protection.
Ryder points out that Bedrock is a venture capital company which typically purchase businesses that are in trouble with the aim of fixing them up and eventually selling them.
That’s why he believes Bedrock is likely looking at U.S. Steel Canada with the hopes that the steel industry will turn around in the next five years, making it a viable company to resell.
And Ryder believes the bankruptcy court judge may still consider that a better option than having the USSC going under by the end of this year.
He points out that the the provincial government and the United Steelworkers are cautiously optimistic about the deal, however the other major creditors, including the American parent company, have not indicated whether they will be satisfied with the offer.
Ryder believes more will be known within the next three weeks.