Magnetation wins approval of $22.5 million sale of remaining assets

By Caroline Salls

Pittsburgh, Dec. 23 – Magnetation LLC received court approval to enter into an asset purchase agreement for the sale and transfer of substantially all of its remaining assets and some liabilities to ERP Iron Ore, LLC through a credit bid submitted by the company’s post-bankruptcy lenders, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Minnesota.

According to the sale motion, the company’s debtor-in-possession financing agent submitted a credit bid for $22.5 million of its allowed claims.

The initial buyer will then transfer its rights and obligations under the purchase agreement to ERP in exchange for $22.5 million of notes issued by ERP.

Magnetation said the motion to sell its remaining assets followed entry into a global settlement agreement, which was approved by the court on Oct. 6 and provides for the wind down of operations, the sale of inventory and accounts receivables, the termination of the company’s pellet purchase agreement and the sale of the remaining assets.

The asset purchase agreement also calls for the assumption and assignment of specified executory contracts and leases.

Magnetation, a joint venture between Magnetation, Inc. and AK Steel Corp., recovers high-quality iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. The Grand Rapids, Minn.-based company filed for bankruptcy on May 5, 2015 under Chapter 11 case number 15-50307.

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