CHICAGO Trafigura AG has closed on a $200-million tax-exempt long-term bond to pay for the development of its terminal in Burnside, La., which also serves bankrupt aluminum producer Ormet Corp.
Once the work is complete, the Burnside terminal will be one of the top coal and bulk logistics facilities in the United States and the only one on the Mississippi River offering both barge-to-vessel and rail-to-vessel capabilities, Trafigura said June 13.
The Swiss trading house noted that the Burnside terminal, operated by subsidiary Impala Warehousing (US) LLC, already receives regular shipments of bauxite and coal from the companys barge fleet.
"With this successful entry into the United States tax-exempt financing market, the company continues to find new markets very receptive to Trafiguras business model and growth," Bryan Keogh, chief financial officer of Trafiguras North American operations, said in a statement.
Impala acquired the Burnside terminal from Hannibal, Ohio-based Ormet in June 2011 for $28 million. The bulk terminal also ships alumina and bauxite, including offloading and discharging material for Ormets refinery in Burnside (amm.com, June 3, 2011).
A 30-year terminal services agreement (TSA) was included as part of the sale to provide reliable loading and unloading services to the refiner. The agreement became a matter of contention in Ormets recent bankruptcy proceedings, with Impala last month raising concerns about the sale of the company to stalking horse bidder Smelter Acquisition LLC, according to documents filed in U.S. Bankruptcy Court in Delaware.
Impala noted in its objection that in addition to the "heavily negotiated" TSA, Trafigura and Ormet in May 2012 signed an agreement to jointly develop business opportunities in the aluminum industry. In addition to Impala providing services to Ormet worth "millions of dollars" annually, the companies are physically linked, for example, by Ormet operating a potable water plant that services both the Burnside refinery and the Impala terminal, the documents said.
Impala sought additional financial information about Smelter Acquisition and assurances that the company would honor contracts negotiated with Ormet.
The sale to Smelter Acquisition, a company owned by Wayzata (Minn.) Investment Partners LLC, was approved by the bankruptcy court earlier this month (amm.com, June 4). Ormet filed for bankruptcy protection in February, citing high legacy and power costs, as well as low aluminum prices (amm.com, Feb. 26).