Molycorp files restructuring plan for either reorganization or sale

By Angela McDaniels

Tacoma, Wash., Nov. 3 – Molycorp, Inc. and its affiliated debtors filed a joint plan of reorganization with the U.S. Bankruptcy Court for the District of Delaware on Nov. 3 that proposes an emergence from Chapter 11 through either a standalone reorganization that would substantially deleverage its balance sheet or a sale of substantially all of its assets, according to a company news release.

The company said the plan is supported by its largest pre-petition secured creditor and its post-petition lender, investment funds managed by Oaktree Capital Management, LP and its affiliates.

The plan envisions a dual-track process under which the company’s assets are being actively marketed for sale either as a whole or through the separate sale of its business units.

The company’s four business units are chemicals & oxides, magnetic materials & alloys, rare metals, and resources, which consists primarily of its assets at Mountain Pass.

The company will pursue a plan process to sell its assets if the bid or bids received exceed certain value thresholds specified in the plan. If the bids do not exceed the threshold values, the company will be reorganized with Oaktree as its shareholder around its chemicals & oxides, magnetic materials & alloys and rare metals business units, and its assets at Mountain Pass will be sold.

The company said it has begun reaching out to prospective buyers. The first round of non-binding indications of interest are due by Dec. 1.

"If approved, the plan would help to significantly reduce our $1.9 billion of debt and cut our interest expense, putting us on a more solid financial and operational footing going forward,” Geoff Bedford, Molycorp president and chief executive officer, said in a company news release.

Molycorp is a Greenwood Village, Colo., producer of materials from rare earth minerals that filed for bankruptcy on June 25 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 15-11357.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.