Ormet's losses deepen in April; Wednesday court date looms

With its future likely to be decided Wednesday by a federal bankruptcy judge in Delaware, US aluminum producer Ormet told the court this week its losses continued to accelerate in April, increasing to $41.8 million for the first four months of 2013.

April marked the third month in a row the Hannibal, Ohio-based company had piled on the red ink. Ormet said it lost $17.3 million in April following a loss of $12.5 million in February and $14.1 million in March. Ormet last turned in a profit in January -- $2.2 million -- before it filed for Chapter 11 bankruptcy reorganization on February 25.

Ormet reported cash and cash equivalents on hand of $2.4 million at the end of April, a slight increase from $1.9 million at the close of January.

In the report, Ormet said its revenue from sow sales totaled $29.6 million in April, down from $35.9 million in March. Other miscellaneous sales amounted to only $332,000 in April, and just $1.3 million for the first four months of the year. The company continues to operate only four of the six pot lines at its 260,000 mt/year smelter in Hannibal.

The firm's operating costs and expenses also decreased somewhat in April, dipping to $43.7 million from $45.2 million in March.

On Wednesday, a judge is scheduled to decide whether to approve Ormet's sale to Smelter Acquisition LLC, a portfolio company owned by private investment funds managed by Minnesota-based Wayzata Investment Partners, for $221 million in debt forgiveness and cash.

The Pension Benefit Guaranty Corp., an arm of the US government, has asked the court to block the sale, saying it would leave Ormet's retirement plans underfunded by about $235 million.

Blocking the sale, Ormet warned in a court filing this week, could plunge the company into liquidation, resulting in reduced operations and layoffs.

Besides the Hannibal smelter, which employs about 1,000 people, Ormet also owns and operates a 540,000 mt alumina refinery in Burnside, Louisiana.