Secondary aluminium producer Real Industry U.S. files for bankruptcy; awaits DIP financing

On November 17, 2017, Real Industry and its U.S. subsidiaries have filed for voluntary bankruptcy. The company also confirmed that they received interim approval from the U.S. Bankruptcy Court for all of the “first day” motions related to their filings. The secondary aluminium producer expects to continue with its operations with grants from the Court on an interim basis. The grant gives authority to the Company and Real Alloy to make payments to suppliers and service providers as well as to pay employees wages, salaries and benefits during its reorganization effort under Chapter 11.

Real Alloy expects to get approval for $110-million asset-based lending facility and up to $85 million through debtor-in-position (DIP) financing. These funds - combined with income generated from ongoing operations - will be used to support Real Alloy’s normal operating and working capital requirements.

“We have received commitments for up to $195 million for debtor-in-position financing. Upon court approval, this DIP financing will provide us with greater financial flexibility and sufficient liquidity to meet...” a company executive said.

“With the DIP financing also approved today, we have begun making payments to scrap suppliers and service providers that support our facilities,” said Terry Hogan, President of Real Alloy. “The Court’s approvals today are a significant step toward rebuilding our capital structure,” he added.

The Court has set a hearing date of December 19, 2017 for final approval of the DIP financing. It is to be noted that Real Alloy’s European, Mexican, and Canadian operations and Goodyear, Ariz. joint venture are supported by their own cash flows and are not part of the bankruptcy filing. Operations in these locations continue as usual.