17 OCTOBER 2013Platts
Ormet gets bankruptcy plan filing extension
Edited by : AL CIRCLE
2 min read
US aluminum producer Ormet has been given a three-month extension -- until February 20, 2014 -- to file a Chapter 11 reorganization plan by a federal bankruptcy court in Delaware.
In a Tuesday order, US Bankruptcy Court Judge Mary Walrath also gave the Hannibal, Ohio-based company until April 22, 2014, to seek creditors' approval for the plan.
"This order shall be without prejudice to the debtors' right to seek further extensions of the time within which only the debtors may file and solicit acceptances of a plan," Walrath said.
Ormet had faced an October 23 deadline to submit the plan.
The embattled company, which filed for reorganization on February 25, had hoped to exit bankruptcy protection quickly after Minnesota's Wayzata Investment Partners, a private equity firm, won court approval on June 4 to acquire Ormet for $282 million.
But Ormet failed to meet a key condition of the sale when the Ohio Public Utilities Commission on October 3 granted the company only a portion of the electricity rate relief Ormet said was required for its 260,000 mt/year Hannibal smelter, which since has been idled entirely.
Ormet has long complained about steep increases in electricity bought for Hannibal from American Electric Power under a "unique arrangement" that runs until 2018. Rising power costs coupled with low aluminum prices have prevented Ormet from turning a profit for most of 2013.
The PUC decision has caused Ormet to reconsider its options, including liquidation.
Ormet also owns a 540,000 mt/year alumina refinery in Burnside, Louisiana, that currently is operating at one-third of its capacity.
In an interview earlier this week, Ormet CEO Michael Tanchuk said it will be a couple more weeks before the company completes its evaluation of several unspecified "opportunities" for the refinery. Until now, the plant essentially has supplied alumina to Hannibal.
In a Tuesday order, US Bankruptcy Court Judge Mary Walrath also gave the Hannibal, Ohio-based company until April 22, 2014, to seek creditors' approval for the plan.
"This order shall be without prejudice to the debtors' right to seek further extensions of the time within which only the debtors may file and solicit acceptances of a plan," Walrath said.
Ormet had faced an October 23 deadline to submit the plan.
The embattled company, which filed for reorganization on February 25, had hoped to exit bankruptcy protection quickly after Minnesota's Wayzata Investment Partners, a private equity firm, won court approval on June 4 to acquire Ormet for $282 million.
But Ormet failed to meet a key condition of the sale when the Ohio Public Utilities Commission on October 3 granted the company only a portion of the electricity rate relief Ormet said was required for its 260,000 mt/year Hannibal smelter, which since has been idled entirely.
Ormet has long complained about steep increases in electricity bought for Hannibal from American Electric Power under a "unique arrangement" that runs until 2018. Rising power costs coupled with low aluminum prices have prevented Ormet from turning a profit for most of 2013.
The PUC decision has caused Ormet to reconsider its options, including liquidation.
Ormet also owns a 540,000 mt/year alumina refinery in Burnside, Louisiana, that currently is operating at one-third of its capacity.
In an interview earlier this week, Ormet CEO Michael Tanchuk said it will be a couple more weeks before the company completes its evaluation of several unspecified "opportunities" for the refinery. Until now, the plant essentially has supplied alumina to Hannibal.
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