Ormet Corporation said it has signed a definitive asset purchase agreement with Smelter Acquisition, a portfolio company owned by private investment funds managed by Wayzata Investment Partners in connection with a proposed financial restructuring of Ormet.
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.
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.
The asset purchase agreement provides for Smelter Acquisition 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 interruption.
Hannibal, OH-based Ormet Corporation is a producer of primary aluminum.