PALM BEACH, Fla.
Ormet Corp. is seeking court approval to sell its
Burnside, La., alumina refinery to Almatis Inc. for $35.3
The proposed deal
excludes any assets primarily used in connection with
Ormets idled Hannibal, Ohio, smelter, according to
documents filed in U.S. Bankruptcy Court in Delaware.
Hannibal-based aluminum producer has requested a sale hearing
on Nov. 5, with objections due by Nov. 4.
Almatis supplies alumina to the refractory, ceramic and
polishing industries, with operations in Leetsdale, Bauxite,
Ark., Dalton, Ga., and Neville, Pa., as well as facilities in
Brazil, China, Germany, India and the Netherlands.
Talks between Almatis
and Ormet "accelerated" after a previous deal with another
suitor fell apart when Ormet failed to gain necessary changes
to its power deal for the Hannibal smelter (
amm.com, Oct. 4).
"It is critical that
the court approve the sale," Ormet said in court documents. The
potential deal is the "highest and best value available,"
exceeds the liquidation value of the Burnside facility and,
given mounting losses at the company, represents the "only
chance" to save 213 jobs at the refinery.
Ormet said it was
looking to sell the Burnside refinery as a going concern. The
refinery, which can produce 540,000 tonnes of smelter-grade
alumina at full capacity, has been on hot-idle status since
Oct. 14, which should allow it to return to production quickly.
In contrast, Ormets Hannibal smelter, capable of
producing 270,000 tonnes of primary aluminum per year, is idle
amm.com, Oct. 18).
for approval to sell the Burnside facility to Almatis came as
the U.S. Trustee objected to the companys wind-down plan,
calling for its Chapter 11 bankruptcy reorganization case to be
converted to a Chapter 7 liquidation.
U.S. Trustee Roberta
DeAngelis blasted Ormet in bankruptcy court documents for
seeking relief not contemplated in U.S. bankruptcy rules and
presenting a "half-baked" Chapter 11 "scheme."
"There is no budget to
support and finance (Ormets) wind-down procedures at this
point, and it is unknown what, if any, administrative, priority
or general unsecured claims, other than professional, will be
paid," DeAngelis said. "Because a Chapter 11 plan does not
appear to be a feasible option ... the creditors and other
parties-in-interest appear to be better served by a conversion
to Chapter 7."
Steelworkers union also objected to Ormets wind-down
plan, noting that Ormetin a possible violation of
collective bargaining rulesmailed letters to both active
and inactive employees at the Hannibal smelter saying that the
company could no longer pay for, among other things,
health-care benefits, supplemental unemployment benefits and
both short- and long-term disability benefits.