Algoma Steel Group Inc. secured a $500 million financing package that includes $400 million from the Canada Enterprise Emergency Funding Corporation and $100 million from the Province of Ontario. The facility is structured as a seven‑year loan with secured tranches of $80 million and $20 million, respectively, and is backed by the governments’ guarantees.
In exchange for the cash, Algoma issued 6.77 million common‑share purchase warrants at an exercise price of $11.08. The warrants vest proportionally as the company draws on the unsecured portion of the facility, meaning dilution will only occur if the company takes additional unsecured debt and the warrants are exercised.
The infusion of capital strengthens Algoma’s balance sheet and provides immediate liquidity to support the company’s green‑steel roadmap. The financing is a key enabler for the $703 million electric‑arc furnace project, which is expected to reduce carbon emissions by roughly 70 % and increase production capacity by about one‑third.
U.S. tariffs on Canadian steel and an oversupply in the domestic market have pressured pricing and sales volumes. The new financing mitigates the financial impact of these headwinds by ensuring that Algoma has the cash reserves needed to weather the tariff‑induced demand shock and to continue investing in the EAF transition.
The company reported a net loss of $485.1 million in the third quarter of 2025, largely driven by a non‑cash impairment charge. The new funding provides a buffer against the impairment and supports ongoing operations while the company works to turn the loss into profitability as the EAF project ramps up.
CEO Michael Garcia said the partnership with federal and provincial governments “reinforces our strong partnership with both levels of government and supports our ability to navigate current market conditions as we complete our EAF transition.” CFO Rajat Marwah added that the financing “allows us to remain focused on operational efficiency, cash generation, and our plate‑first commercial strategy.”
The $703 million EAF project cost is a significant portion of the $500 million financing, allowing Algoma to accelerate the ramp‑up and achieve the projected capacity expansion sooner than originally planned.
Overall, the financing is a milestone that positions Algoma for future growth in high‑margin plate products, while the company continues to manage the challenges posed by tariffs and the transition to low‑carbon steelmaking.
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