Ormet files for Ch. 11, agrees to sale

Feb 26, 2013 | 05:38 PM | Michael Cowden

Tags  Ormet, bankruptcy protection, Chapter 11, Michael Tanchuk, Wayzata Investment Partners, Smelter Acquisition, USW, David McCall power

CHICAGO — Ormet Corp. has filed for Chapter 11 bankruptcy protection, citing high legacy and power costs and low aluminum prices.

The Hannibal, Ohio-based primary aluminum producer also said it had entered an agreement to be acquired by a company owned by private equity firm Wayzata (Minn.) Investment Partners LLC as it looks to restructure and re-emerge from bankruptcy with a better cost structure.

"This is an organized step to reduce our costs ... so it is a good thing for Ormet and a positive thing for employees, long term—but not easy," Ormet president and chief executive officer Michael F. Tanchuk told AMM Feb. 26.

Ormet has assets of $406.8 million and total liabilities of $416 million, according to documents filed Feb. 25 in U.S. bankruptcy court in Delaware.

"Ormet has done everything possible during very difficult financial times to pay its debt and legacy obligations," Tanchuk said in a statement Feb. 25. "However, with a low metal price and higher power costs, we no longer have the financial liquidity to continue to do this."....