March 22 (Bloomberg) -- Ormet Corp., the operator of an Ohio aluminum smelter, won court approval to hold an auction to sell virtually all its assets, with an affiliate of lender Wayzata Investment Partners LLC making the lead bid.
U.S. Bankruptcy Judge Mary Walrath approved the procedures that will govern the auction process and also granted the company final approval of a $90 million loan from Wayzata and Wells Fargo Capital Finance LLC, according to court documents filed today and yesterday. Wayzata is providing $30 million and Wells Fargo the remaining $60 million.
Ormet will hold an auction on May 13 to see if there are any potential buyers willing to top Wayzata’s so-called stalking-horse offer of about $221 million in debt forgiveness, court filings show. If no competing offers surface, the company will cancel the auction and seek court approval to sell its assets to Wayzata at a May 15 hearing. Competing bids must be submitted by May 8.
The aluminum producer, based in Hannibal, Ohio, listed assets of $407 million and debt of $416 million, according to court documents.
Ormet has the ability to produce 270,000 tons of aluminum a year when operating at full capacity, court papers show. Its alumina refinery in Burnside, Louisiana, one of only four in the U.S., is capable of producing 540,000 tons of smelter-grade alumina a year at full capacity.
The case is In re Ormet Corp., 13-bk-10334, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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