21 AUGUST 2013Reuters
Ormet seeks liquidity to keep two aluminum potlines open
Edited by : AL CIRCLE
2 min read
Ormet Corp is negotiating with its equity owner for additional liquidity to keep remaining aluminum operations running, after shutting down two potlines late last week, a spokesman at the U.S aluminum producer said on Monday.
On August 1, the Hannibal, Ohio-based company began shutting two of the smelters' four operating potlines in order to keep electricity costs under control while it waits for an August 27 hearing on the matter.
""We've asked for additional liquidity, which would assist us to get through this--not just the hearing on the 27th, but the Public Utilities Commission would then have to act,"" he said.
He added that the company was negotiating for additional liquidity from its sole equity sponsor Wayzata Investment Partners LLC to avoid having to completely curtail operations.
While shuttering the plant remains a possibility, the spokesman said it was no longer imminent.
On June 3, Smelter Acquisition, LLC, a portfolio company owned by Wayzata, acquired Ormet once the United States Bankruptcy Court for the District of Delaware approved the sale.
Ormet filed for bankruptcy protection in February to reorganize legacy costs related to retiree healthcare as it struggled to control costs in the current low aluminum metal price and high energy cost environment.
At a hearing set for August 27, the aluminum producer will present its case to the Public Utilities Commission of Ohio for a revised energy deal with power provider, Ohio Power, a unit of American Electric Power Service Corp.
CEO Mike Tanchuk said in an interview with Reuters earlier this month that restructuring Ormet's power costs was all that was left for Ormet to emerge from bankruptcy.
Benchmark aluminum prices on the London Metal Exchange have risen by $100 to $150 per tonne to around $1,900 a tonne since the company began the potline shutdown, though they remain well below the 2013 high at $2,184 a tonne.
The smelter is currently producing at a rate of about 90,000 tonnes per year. The plant has a total of six potlines with an annual capacity of about 270,000 tonnes per year.
On August 1, the Hannibal, Ohio-based company began shutting two of the smelters' four operating potlines in order to keep electricity costs under control while it waits for an August 27 hearing on the matter.
""We've asked for additional liquidity, which would assist us to get through this--not just the hearing on the 27th, but the Public Utilities Commission would then have to act,"" he said.
He added that the company was negotiating for additional liquidity from its sole equity sponsor Wayzata Investment Partners LLC to avoid having to completely curtail operations.
While shuttering the plant remains a possibility, the spokesman said it was no longer imminent.
On June 3, Smelter Acquisition, LLC, a portfolio company owned by Wayzata, acquired Ormet once the United States Bankruptcy Court for the District of Delaware approved the sale.
Ormet filed for bankruptcy protection in February to reorganize legacy costs related to retiree healthcare as it struggled to control costs in the current low aluminum metal price and high energy cost environment.
At a hearing set for August 27, the aluminum producer will present its case to the Public Utilities Commission of Ohio for a revised energy deal with power provider, Ohio Power, a unit of American Electric Power Service Corp.
CEO Mike Tanchuk said in an interview with Reuters earlier this month that restructuring Ormet's power costs was all that was left for Ormet to emerge from bankruptcy.
Benchmark aluminum prices on the London Metal Exchange have risen by $100 to $150 per tonne to around $1,900 a tonne since the company began the potline shutdown, though they remain well below the 2013 high at $2,184 a tonne.
The smelter is currently producing at a rate of about 90,000 tonnes per year. The plant has a total of six potlines with an annual capacity of about 270,000 tonnes per year.
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