CMX, SA Recycling to run Colonial Metals ops
Apr 11, 2019 | 10:26 AM
LOS ANGELES — California Metal X Inc (CMX) has entered into a 50:50 joint venture with SA Recycling LLC to restart and run the shuttered operations of Colonial Metals Co, CMX president Tim Strelitz told Fastmarkets AMM on the sidelines of the annual Institute of Recycling Industries conference on Wednesday April 10.
Start-up of the venture between Los Angeles-based CMX and Orange, California-based scrap processor and exporter SA Recycling - which is led by chief executive officer George Adams - is targeted for May, Strelitz said.
“The cultures of both companies are closely matched. This partnership allows us to have a stronger presence in the market and for the first time in our history to form a symbiotic partnership with a company in the United States," he said.
“Work on the plant bailout is proceeding on schedule. We’re targeting to be melting and casting within the next 35 days,” Strelitz said. “We’ve rehired all Colonial’s middle managers.”
The pair successfully completed the settlement of Columbia, Pennsylvania-based Colonial Metals’ outstanding debt, having offered 18 cents on the dollar for all outstanding unsecured claims after Colonial ceased operations in June due to growing operating losses.
Key to the success of the deal was the acceptance by unsecured creditors, who could have shirked the offer and pushed the company into an involuntary bankruptcy proceeding.
“All unsecured creditors have accepted our debt payoff offer,” Strelitz said.
Some brass scrap prices slipped slightly in Fastmarkets AMM’s latest assessment on April 10, with No1 composition solids down by 2 cents to $2.11-2.15 per lb.