Aleon Metals, together with subsidiaries Gladieux Metals Recycling (GMR) and Aleon Renewable Metals (ARM), has secured $188 million in debtor-in-possession (DIP) financing and has filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The company will use Chapter 11 to facilitate the restructuring and complete the sale process.
The new financing will provide Aleon with the liquidity to maintain normal operations, reinvest in its Freeport, TX facilities and continue its mission of delivering responsibly sourced, high-purity critical minerals to U.S. industries, national security and clean energy.
As part of the restructuring, Aleon has entered into an agreement to sell the business in a “free-and-clear” sale under Section 363 of the Bankruptcy Code. A consortium of the DIP lenders will serve as the stalking horse bidder. Jefferies, Aleon’s investment banker, will continue to market the business as part of the ongoing auction process, which remains open to higher or better offers.
“This is a pivotal step in Aleon’s journey,” Roy Gallagher, chief restructuring officer, said. “With fresh capital, strong stakeholder support and a competitive process underway, Aleon is positioned to enhance its Freeport operations and continue providing critical minerals that are essential to America’s future.”
“We’ve worked diligently to streamline our operations and position Aleon for continued growth,” Tarun Bhatt, CEO of Aleon, said. “I want to thank our employees for their dedication and our bondholders for their steadfast support. Now more than ever, offering a sustainable, domestic alternative to foreign-sourced critical minerals is essential. This process enables us to invest further in GMR and ARM, accelerate innovation and secure Aleon’s role as a long-term leader in U.S. critical mineral supply, while continuing to support local jobs, play a positive role in the community and advance environmental sustainability for future generations.”
The company has filed customary “first day” motions seeking court approval to continue operations without disruption. These include requests to pay employee wages and benefits in full. The company anticipates swift approval and intends to operate in the normal course throughout the restructuring.
Morrison & Foerster is serving as legal counsel, Jefferies as investment banker, Ankura Consulting Group as restructuring advisor (with Gallagher, senior managing director at Ankura, serving as the company’s chief restructuring officer) and Norton Rose Fulbright as Texas restructuring counsel.
