Algoma Steel Completes $500 Million Government Financing Transaction

Executive Summary

• Algoma Steel Group Inc. completed a $500 million financing package with the Governments of Canada and Ontario.
• The facilities consist of $400 million from the Canada Enterprise Emergency Funding Corporation (including an $80 million secured tranche) and $100 million from the Province of Ontario (including a $20 million secured tranche).
• 6.77 million common share purchase warrants were issued at an exercise price of $11.08, exercisable over ten years, providing long‑term financial flexibility for Algoma’s electric arc furnace transformation.

Key Details

• Total financing: $500 million.
• Canadian federal portion: $400 million (including $80 million secured tranche) from CEEFC (a subsidiary of Canada Development Investment Corporation).
• Ontario provincial portion: $100 million (including $20 million secured tranche).
• Warrants issued: 6.77 million common share purchase warrants to CEEFC and Ontario on a proportional basis.
• Warrant terms: Exercise price $11.08 per share; ten‑year term; vesting proportionately as unsecured draws are made under each facility.
• Purpose of funds: Strengthen balance sheet, provide liquidity for immediate operational needs, support near‑term milestones in the Electric Arc Furnace (EAF) transformation, and enable continued focus on operational efficiency, cash generation, and a plate‑first commercial strategy.
• Draw schedule: Secured tranches will be drawn first to supply immediate liquidity for operations and transformation milestones.

Notable Quotes

“Completing this financing reinforces our strong partnership with both levels of government and supports our ability to navigate current market conditions as we complete our EAF transition,” – Michael Garcia, Chief Executive Officer.

“Finalizing these facilities marks another key milestone in executing our financial strategy… the new funding allows us to remain focused on operational efficiency, cash generation, and our plate‑first commercial strategy,” – Rajat Marwah, President and Chief Financial Officer.