The New York-based hedge fund Paulson & Co disclosed in regulatory filings this week that, as of March 31, it held 1,926,600 or about 5% of Algoma Steel Inc’s shares. That's down from about 19% in its last disclosure at the beginning of November.

Paulson began its battle with Algoma in the fall, pushing the steelmaker to use its large cash balance to make a payout of more than $400 million to its shareholders. When Algoma rejected the proposal, Paulson launched a proxy battle to replace the steel maker's board.

Finally Paulson & Co pushed Algoma to make $ 200 million cash payment to its shareholders and put two directors acceptable to Paulson on its board and agreed to continue its strategic process which includes searching for potential buyers for the steelmaker. The settlement angered Algoma's union, the United Steelworkers, which wanted the money to go to the company's pension plans.
Fidelity also announced on Tuesday that it has decreased its holdings in the steelmaker by 1,494,400 shares since December 12. Fidelity now holds 4,165,700 or 10.79% of Algoma shares.

Algoma shares have been rising for months and when Algoma rejected Paulson's initial proposal in October, the shares were trading at $21.35 on the Toronto Stock Exchange. Prior to the announcement of the agreement with Paulson on March 7, the shares were halted at $30.92.