Hunt continues for alternative buyer for Ormet

Investment bankers in the bankruptcy of US aluminum producer Ormet are still working the phones and holding face-to-face discussions to determine if anyone else, besides Wayzata Investment Partners, is interested in buying the company, a source involved in the case said Friday.

The "bankers are pounding the pavement to see if there is interest" from a bidder not named Wayzata, which has agreed to pay $231 million in debt forgiveness and cash to the Hannibal, Ohio-based company, the source said.

Whether the bankers will be successful in their mission is debatable.

Ormet, which filed for Chapter 11 reorganization on February 25 in the US Bankruptcy Court for the District of Delaware, said in a previous court filing that it searched for potential buyers for some time in late 2012 and early 2013 before Wayzata stepped forward.

The court has set a May 8 deadline for offers for Ormet's assets. If more than one qualifying bid is submitted then, an auction will be held on May 13 in the Cincinnati offices of Dinsmore & Shoal, the company's legal counsel.

So far, it does not appear anyone else has come forward. At least, there have been no such filings with the court.

However, the source said such bankruptcy auction processes "tend to go quickly. We may not know until the evening of May 7" if a bid will be submitted the following day, the source said.

Ormet CEO Michael Tanchuk was unavailable for comment Friday.

Tanchuk told Platts in an interview earlier this year he expected the bankruptcy process to proceed expeditiously, with a strengthened company perhaps emerging from Chapter 11 in three to four months -- which would be roughly around the middle of the year.

In addition to its 260,000 mt/year smelter in Hannibal, Ormet also owns a 540,000 mt alumina refinery in Burnside, Louisiana.

On March 28, the United Steelworkers union voted overwhelmingly in favor of a new labor contract with Wayzata that eliminates the union's traditional pension plan with Ormet.