Noranda files for bankruptcy protection in the United States
Published:Monday | February 8, 2016 | 12:00 AM
Noranda Aluminium Holding Corporation has filed for bankruptcy protection under Chapter 11 of the United States code.
The petitions were filed in the U.S. Bankruptcy Court for the Eastern District of Missouri.
Noranda says it has taken this action to have additional time and financial flexibility to evaluate options for its various business operations.
"In conjunction with the filing, Noranda has entered into an agreement in principle with its existing ABL lenders for up to US$130 million in debtor-in-possession financing and has received a commitment for up to US$35 million in incremental financing provided by certain existing term loan lenders," a Noranda spokesperson said in a release.
The company says its subsidiary, Noranda Bauxite Limited (NBL) in St Ann is continuing production and its partnership with the Jamaican government continues.
"To maintain NBL as a secure source of bauxite supply to the company's alumina operations, the company continues to focus its efforts on improving productivity and reducing its costs, as well as maintaining bauxite sales volumes and achieving improved pricing with respect to its largest third party customer, Sherwin Alumina LLC," the spokesperson said.
Sherwin filed for Chapter 11 relief in January 2016.
Noranda says upon approval by the court, the new financing, combined with cash generated from the Company's ongoing operations, will be used to support the business during the court-supervised process.
"In light of the challenging market conditions for the aluminium industry and the recent disruptions in our primary business operations, the Board and management team, with the support of our principal lenders, determined that undertaking this court-supervised process is in the best interests of Noranda and its stakeholders," said Kip Smith, Noranda's president and chief executive officer.
The company says for goods and services provided post-Chapter 11 filing, it intends to pay suppliers in full under normal terms.