CHICAGO Ormet Corp.s sale to stalking horse bidder Smelter Acquisition LLC, a company owned by Wayzata (Minn.) Investment Partners LLC, has been approved by the U.S. Bankruptcy Court in Delaware, Ormet.
The sale should allow Ormet to shed substantially all of its legacy liabilities and emerge with a much stronger balance sheet, the bankrupt Hannibal, Ohio-based aluminum producer said June 4.
In addition, Ormet said that the acquisition is not expected to affect the companys ordinary course of operations.
Ormet made a major step forward today in finalizing our purchase agreement with Smelter Acquisition, Ormet president and chief executive officer Michael Tanchuk said in a statement.
The main unresolved issue for the company is gaining approval of suitable relief from the companys current power arrangement. Ormet will be submitting a proposal on the matter soon to the Public Utilities Commission of Ohio (PUCO), Tanchuk said.
The deal remains subject to customer closing conditions as well as relief from PUCO in regards to power arrangements, Ormet said.
Ormet had cited high legacy and power costs and low aluminum prices in its bankruptcy filing (amm.com, Feb. 26).
The company appeared set to be sold to Smelter Acquisition until objections to the deal, including from Pension Benefit Guaranty Corp., saw a sale approval hearing pushed back to June 3 (amm.com, May 22).
The $282.2-million deal for Ormet wasnt simply a credit bid by a secured lender but a transaction aimed at giving Ormet the best future prospects while representing a better deal for creditors than liquidation, an executive with a New York-based investment banking firm retained by Ormet said (amm.com, June 3).
Ormet counsel and parties affiliated with the aluminum producer have said the company faced the possibility of liquidation if the sale was not approved.