Ormet Corporation Reaches Agreement on Debt Restructuring and Sale of Business to Wayzata Investment Partners

  Ormet Corporation Reaches Agreement on Debt Restructuring and Sale of
  Business to Wayzata Investment Partners

  Ormet Files Voluntary Chapter 11 Petition to Facilitate the Restructuring;

    Operations to Continue Without Interruption During Chapter 11 Process;

    Wayzata to Provide $30 million in Debtor-in-Possession (DIP) Financing

Business Wire

HANNIBAL, Ohio -- February 25, 2013

Ormet Corporation, a leading producer of primary aluminum, announced today
that it has signed a definitive Asset Purchase Agreement with Smelter
Acquisition, LLC, a portfolio company owned by private investment funds
managed by Wayzata Investment Partners LLC. (“Wayzata”), in connection with a
proposed financial restructuring of Ormet. Wayzata-managed funds are also
Ormet’s largest pre-petition lender and have agreed to provide Term DIP
financing to ensure a smooth ownership transition to Smelter Acquisition, LLC.
The restructuring will be implemented through a proceeding in the U.S.
Bankruptcy Court in the District of Delaware, where the Company filed a
voluntary chapter 11 petition today. The Asset Purchase Agreement, which has
been filed with the Court, provides for Smelter Acquisition, LLC to purchase
substantially all the Company’s assets, subject to higher or better offers and
Bankruptcy Court approval. The Company has received aggregate commitments of
$90 million of DIP Financing, consisting of a $30 million Term DIP financing
from Wayzata and a $60 million DIP facility from Wells Fargo, which will
replace its $60 million pre-petition revolver with Ormet. Upon Court approval,
these DIP financings should provide sufficient liquidity to meet ongoing
obligations and ensure that the Company’s operations continue without

“This is a positive and necessary step for Ormet and is in the best interest
of the Company, our employees, suppliers, customers and other key
stakeholders,” said Mike Tanchuk, Chief Executive Officer and President of
Ormet Corporation. “The Chapter 11 filing will allow Ormet to accomplish two
important goals. First, to sell the company in a controlled process that is
designed to ensure that the highest and best offer is received. Second, to
restructure the debt and legacy costs while operations continue. We will come
out of this process stronger and better positioned for the future.” Mr.
Tanchuk emphasized that Ormet expects its day-to-day operations to continue
during the Chapter 11 proceedings and sales process. “We do not anticipate
that any customers or suppliers will experience any change in the way we do
business with them,” Mr. Tanchuk said. “We have secured adequate financing so
that we will be able to pay our vendors in the ordinary course of business for
all goods and services and customers continue to receive the same quality
products to which they are accustomed.”

As a routine matter, Ormet has sought approval to continue the payment of
employee wages, salaries and benefits. The Company anticipates that the Court
will approve this request in the next few days. “We greatly appreciate the
ongoing loyalty and support of our employees,” said Mr. Tanchuk. “Their
continued dedication and focus on producing quality products safely is
absolutely critical to our success going forward. Company management will be
meeting with employees over the next several days.”

Mr. Tanchuk acknowledged that the Company’s high level of debt and legacy
costs have been obstacles to achieving profitability. “Ormet has done
everything possible during very difficult financial times to pay its debt and
legacy obligations. However, with a low metal price and higher power costs, we
no longer have the financial liquidity to continue to do this. Ormet and its
employees have made great strides in reducing costs, but this is simply not
enough to overcome the headwinds of metal price and energy costs.”

The purchase price for the Company’s assets under the Asset Purchase Agreement
with Smelter Acquisition, LLC would consist of repayment or assumption of the
DIP loans, credit bidding of $130 million of Ormet term loans held by
Wayzata-managed funds, delivery of $1 million of buyer securities, and payment
of cash for certain fees and expenses to be incurred in the administration of
the bankruptcy proceedings. In addition, the buyer would assume specified
normal course liabilities of the Company, but would not assume many of the
Company’s legacy liabilities. It is not anticipated that the purchase price
would be sufficient to provide any recovery to the Company’s shareholders.

The Asset Purchase Agreement is subject to certain conditions, including
satisfactory amendments to the Company’s electric power agreement, collective
bargaining agreements and Bankruptcy Court approval. In addition, the Company
will solicit competing bids from other potential purchasers in accordance with
a sale process to be approved by the Bankruptcy Court. Ormet’s assets would be
sold to the bidder submitting the highest or otherwise best offer.

Copies of the Asset Purchase Agreement and the Wayzata and Wells Fargo DIP
facilities are available on the Company’s website at www.ormet.com.
Information about the Chapter 11 case, including access to court filings, can
be obtained at http://www.kccllc.net/ormet or through a link to this service
on the Company’s website.

Cautionary Statement

This Statement contains forward-looking statements that can be identified by
use of words such as “anticipates,” “believes,” “estimates,” “expects,”
“hopes,” “targets,” “should,” “forecast,” “outlook,” “projects” or other words
of similar meaning. All statements that address the Company’s expectations or
projections about the future, including statements about the Company’s
strategy for growth, cost reduction goals, expenditures, financial results,
liquidity and capital needs, are forward-looking statements. Forward-looking
statements are based on the Company’s estimates, assumptions and expectations
of future events and are subject to a number of risks and uncertainties and
may or may not be realized. The Company cannot guarantee its future
performance or results of operations. All forward-looking statements in this
press release are based on information available to the Company on the date
hereof. The Company disclaims any intention or obligation to update or revise
any forward-looking statements, except as may be required by law. The
Company’s business is subject to a number of significant risks and
uncertainties, including the potential adverse impact of its Chapter 11 cases
on the Company’s operations and relationships with customers and suppliers and
its ability to close an asset purchase agreement with Wayzata or another
purchaser. Reference is made to the risk factors and other disclosures
contained in the Company's Information and Disclosure Statements for year
ended December 31, 2011, which is available on the Company's website at
www.ormet.com. Given the significant uncertainties and risks to which the
Company is subject (a) the reader should not place undue reliance on
forward-looking statements contained in this press release and (b) the
Company’s future results could differ materially from the Company’s current
results and from those anticipated in the Company’s forward-looking

Headquartered in Hannibal, Ohio, Ormet Corporation is a major U.S. producer of
aluminum. Ormet employs approximately 1,250 people. For more information,
visit the Company’s website at www.ormet.com.


Ormet Corporation
Matthew Powell, 740-483-2801
Press spacebar to pause and continue. Press esc to stop.