Oaktree's Neo Performance to Seek C$300 Million in IPOBy and
Molycorp legacy firm plans to list shares in Toronto
Company working with Scotiabank, RBC, Cormark on IPO
Advanced materials producer Neo Performance Materials Inc., carved from the remains of bankrupt Molycorp Inc., is seeking to raise C$300 million ($235 million) in its initial public offering, according to people familiar with the matter.
Neo Performance, backed by investment firm Oaktree Capital Group LLC, is working with Bank of Nova Scotia, Royal Bank of Canada and Cormark Securities Inc. on the share sale, according to a regulatory filing last month. The company intends to list its shares in Toronto, the filing shows.
Representatives for Neo Performance and Oaktree declined to comment.
Oaktree plans to sell shares in the IPO, and Neo Performance won’t receive any of the proceeds of the offering. The company also is exploring a sale as an alternative, in a so-called dual-track process, people familiar with the matter said in September.
Neo Performance’s assets don’t include Molycorp’s former rare-earths mine in the California desert, which is the only such mine in the U.S. and was sold separately.
Molycorp spent hundreds of millions of dollars on an experimental ore-processing system for rare-earth metals, which are used in hybrid electric cars, iPhones and military hardware such as night-vision goggles and guided weapons, among other applications. When prices plummeted in the mining segment dominated by low-cost Chinese producers, Molycorp couldn’t compete and filed for bankruptcy in June 2015.
Oaktree, as Molycorp’s biggest secured creditor, took over a collection of the mining company’s most valuable assets and brought them out of bankruptcy under the name Neo Performance last year. In June, Los Angeles-based Oaktree and bondholders JHL Capital Group LLC and QVT Financial LP split up Molycorp’s remaining assets, including the California mine and the advanced ore-processing equipment, that had been left in bankruptcy under the care of a trustee.
Now based in Toronto, Neo Performance processes advanced rare-earth metals used in a variety of technology applications, including auto parts, clean energy, crude oil refining, advanced and consumer electronics, and waste water treatment, according to its website. It operates in 10 countries: Canada, the U.S., China, Japan, Thailand, Singapore, South Korea, Germany, the U.K. and Estonia.
The company reported revenue of $382 million in 2016, down 3.7 percent from the previous year, according to the filing. Its net income was $1.7 million, up from a loss of $226 million in 2015, the filing shows.