Corp. is considering liquidating its Hannibal, Ohio, smelter
while it looks to make a deal with a potential buyer for its
Burnside, La., alumina refinery.
The bankrupt aluminum
producer said it hopes a sale of the Burnside refinery will
allow the operation to continue as a "going concern," but it
has "no option but to pursue a liquidation of assets at the
Hannibal smelter," according to documents filed in U.S.
Bankruptcy Court in Delaware.
Ormet did not respond
to a request for comment.
A United Steelworkers
union staff representative said that liquidation at Hannibal
was not a foregone conclusion, noting that it was standard
practice in bankruptcy proceedings to prepare for liquidation
if it becomes necessary.
"All that is is a plan
to liquidate," John Puskar, a staff representative for USW
District 1, told AMM Oct. 18, adding that, to his
knowledge, Ormet has made no decision to liquidate and that it
was premature to jump to any conclusions. "They have a skeleton
crew down there. Theyre doing their normal maintenance.
... Its day by day," he said.
previously said it was seeking court approval to sell "excess
assets" to repay creditors, including raw materials such as
alumina, anodes, caustic soda and bauxite as well as finished
goods, excess equipment, office furniture, fixtures, vehicles
and property (
amm.com, Oct. 16).
The company is
examining "all options" for the Hannibal smelter, "including
inviting certain parties that are known to have an interest in
the liquidation of assets similar to what may be found at the
Hannibal facility to perform diligence," according to court
documents. Ormet also is exploring whether stalking-horse
bidder Smelter Acquisition LLC might be amenable to changing
its agreement with the company. Resolving the situation at
Hannibal "may take several weeks," Ormet said in the court
The proposed sale to
Smelter Acquisition fell apart after Ormet failed to win
approval for a lower fixed power rate or to gain permission to
break its agreement with American Electric Power Co., Columbus,
Ohio, so that it could buy electricity on the open market in
amm.com, Oct. 4).
At Burnside, Ormet
said in court documents it is in discussions with a potential
purchaser that might want to keep the operation as a going
concern, and the facility is therefore on "hot idle" so that it
could "quickly be brought back up to operational status."
Ormet hopes that a
sale of the Burnside refinery will occur "in a compressed
timeframe," but it is prepared for all contingencies and could
curtail operations at Burnside at any time, court documents
smelter, which is capable of producing 270,000 tonnes of
primary aluminum per year when operating at full capacity, has
been idled since Oct. 7, while the Burnside refinery, which can
produce 540,000 tonnes of smelter-grade alumina at full
capacity, has been on hot-idle status since Oct. 14.
Ormet had more than
1,100 employees at the two facilities when it filed for
bankruptcy protection in February (
amm.com, Feb. 26), court documents said. The
company now has 99 workers at Hannibal and 213 at Burnside.