Molycorp, now Neo Performance Materials, exits Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Aug. 31 – Molycorp, Inc. emerged from Chapter 11 bankruptcy when its fourth amended plan of reorganization took effect on Wednesday, according to a news release.

The plan was confirmed on March 30 by the U.S. Bankruptcy Court for the District of Delaware.

The reorganized business will be known as Neo Performance Materials. The company said the business is organized along three business segments: neo chemicals and oxides, neo magnequench and neo rare metals.

Neo Performance Materials is a privately held company with executive offices in Toronto. It is led by the previous management team under president and chief executive officer Geoff Bedford, who together with the former chairman of the board, Constantine Karayannopoulos, will serve as members of the board.

The other board members include Brook Hinchman, Edgar Lee, Emily Stephens, Nick Basso, Robert LaRoche, Eric Noyrez and Jonathan Foster.

The company said shares of common stock of former Molycorp, Inc. are no longer available for trading on a public exchange.

Plan terms

As previously reported, the plan features a settlement agreement between an affiliate of funds managed by Oaktree Capital Management LP and unsecured creditors under which Oaktree will receive 92˝% of the equity and the unsecured creditors will receive 7˝% of the equity in the reorganized company.

Holders of 10% notes claims will receive a share of 64.71% of a Molycorp Downstream intercompany amount and, if a downstream businesses sale trigger occurs, the net remaining portion of the sale proceeds that are allocable to the noteholders following satisfaction of all the DIP facility claims, Oaktree pre-bankruptcy claims and other senior claims.

The fees and expenses of the indenture trustee will be paid from the cash recovery allocable to 10% noteholders on account of their secured claims.

Holders of subordinated convertible notes claims and Molycorp interests will receive no distribution.

Technical amendments

In May, the company received court approval to make technical changes to the confirmed plan.

Under the modifications, every holder of a claim in class 5A will presumptively receive cash from the class 5A stand-alone cash distribution, regardless of claim size, but subject to a cash-out oversubscription.

Molycorp said every holder of a claim in class 5A will also be able to opt out of receiving cash, and instead receive its share of class 5A equity.

In addition, the modifications require holders who want to receive class 5A equity to make an election to that effect and to fill out the appropriate documentation to allow the debtors to complete distributions of the class 5A equity.

“We emerge with a strong financial foundation under a new brand that speaks to our continued focus on performance and innovation,” Bedford said in the release.

“We have a commonality with the funds managed by Oaktree Capital Management, LP, an affiliate of which is our largest shareholder, in a shared vision and commitment to our customers with the goal of long-term growth and value creation that will benefit everyone associated with our company.

“We are already achieving significant milestones in bringing new applications and solutions to market through collaboration with our customers, and we are now in a much stronger position to continue down this path of value creation for our stakeholders.”

Molycorp is a Greenwood Village, Colo., producer of materials from rare earth minerals that filed for bankruptcy on June 25, 2015. 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.