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Ormet files disclosure statement, reorganization plan; old debtholders to get estimated 25.3% recovery
By Jeff Pines
Washington, Sept. 2 - Holders of Ormet Corp.'s old 11% senior notes due 2008, $75 million of floating-rate term loans and general unsecured claims will get an estimated recovery of 25.3%, according to the company's disclosure statement filed with the U.S. Bankruptcy Court for the Southern District of Ohio Wednesday.
Both the noteholders and term loan holders are in class 4. Wheeling, W.Va.-based Ormet estimates there are $257.1 million of class 4 claims, which include $150 million principal amount of the old notes plus another $25.5 million.
General unsecured claims are in class 5. The company estimates these claims total $61.7 million.
The noteholders, term noteholders and holders of general unsecured claims will get all of the reorganized company's stock. The reorganization plan calls for 1 million shares to be issued. The plan was filed with the disclosure statement.
More than $100 million of old debt claims are held by MatlinPatterson Global Advisors LLC. It will own about 31% of the reorganized company's stock if this plan goes through. MatlinPatterson has also agreed to buy $30 million of new 11% term notes. As part of the deal, Ormet will pay MatlinPatterson a $900,000 commitment fee for the new term notes.
General unsecured claimsholders can choose to reduce their claim to $30,000 and have the claim reclassified as a convenience claim and get a 13% recovery in cash.
The plan calls for the company to obtain a $125 million senior facility including a $25 million letter-of-credit sub-facility.
A hearing on the disclosure statement is scheduled for Sept. 29.
Ormet filed for bankruptcy on Jan. 30 citing low prices for aluminum and high production costs. Its Chapter 11 case number is 04-51255.
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