Molycorp requests court approval of bid procedures, sale of assets

By Mark Reccek

Bethlehem, Pa., Nov. 12 – Molycorp, Inc. requested court authorization of the bidding procedures and sale of company assets, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, the company is seeking approval to sell substantially all of its assets pursuant to the joint plan of reorganization only if the conditions necessary for the entire company sale occur.

The motion indicated bidding for each relevant permitted asset group will start at the purchase price and other terms proposed in the baseline bid. The minimum overbid for bids for substantially all of the assets of the parent and each of its affiliates will be $2 million, for bids for substantially all of the downstream businesses, the minimum overbid will be $2 million, for bids for MM&A, C&O or RM, the minimum overbid will be $500,000 and for bids for any part of the Molycorp minerals assets, the minimum overbid will be $250,000.

“The debtors will proceed with the entire company sale only if they make a determination that the entire company sale is in the best interests of the debtors’ estates. The plan sets forth a formula for the entire company sale trigger, which will be used to determine the minimum amount that a bid or collection of bids must provide for the debtors to proceed with the entire company sale,” the motion said.

Also, if the stalking horse bidder is selected, the company will pay it a break-up fee of up to 3% of the total cash consideration offered for the assets and an expense reimbursement of up to $500,000 if it is not the high bidder for the assets.

“The bidding procedures will provide the formal framework for the sale process, which has been designed to elicit value maximizing bids for substantially all of the debtors’ assets,” the motion added.

The bid deadline is set for Jan. 4.

The auction is scheduled for Jan. 7, and the confirmation hearing is scheduled for Jan. 13 and 14.

A hearing on the bid motion is scheduled for Dec. 8.

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.

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