After reporting much better than expected second-quarter results, Stelco quietly entered into a new potentially profitable area, property developer. The company purchased over 3,000 acres—760 acres at its Hamilton site and 2,300 acres at its Lake Erie site for C$114-million financed with a 25-year, 8% interest rate mortgage. The land was unused.
Now Alan Kestenbaum, the company’s CEO said that the transaction allows “the development of excess land and port facilities in the very strong Greater Toronto Area property-constrained industrial market.” And, Stelco wants top “extract significant and previously unrealized value” by developing the property.
There has been a debate on whether the land should be used for industrial uses or as a transportation hub. Regardless of how it is used, the land is expected to be worth a fortune, at lot more than C$1124-million, in the future.