Horsehead Holding Seeks Bankruptcy Protection
February 02 2016 - 8:30AM
Dow Jones News
Zinc producer Horsehead Holding Corp. filed for chapter 11
bankruptcy protection Tuesday, hit by low commodity prices and
weaker global demand for base metals.
The Pittsburgh, company is carrying $420.7 million in funded
debt, secured and unsecured, court papers say.
Horsehead is in talks with senior secured bondholders about a
deal that would require it to file a chapter 11 reorganization plan
within 40 days, and get out of bankruptcy within 130 days of the
bankruptcy filing.
Horsehead resorted to chapter 11 protection following a move on
Jan. 5 by Macquarie Bank Ltd., as the agent for lenders. Macquarie
declared a default on a loan and froze some of Horsehead's bank
accounts, further stressing the company's liquidity.
In a filing with the U.S. Bankruptcy Court in Wilmington, Del.,
Horsehead said it is completing a bankruptcy financing package that
will fund its turnaround effort.
Operational problems at a North Carolina zinc processing
facility have amplified the macroeconomic factors that made
Horsehead's debt load difficult to carry, according to a
declaration from James Hensler, chairman, president and chief
executive officer of Horsehead.
Construction began on the facility in 2011, which uses
state-of-the-art technology for processing zinc. Cost overruns and
the inability to get the facility up to full capacity caused
Horsehead to temporarily halt production at the North Carolina
plant.
Horsehead Holdings is the parent company of three entities that
produce zinc metal and zinc oxide and recycle other materials,
including nickel-bearing waste, in North America. Its products are
used in the galvanizing of steel products and as components in
rubber tires, alkaline batteries, paint, chemicals and
pharmaceuticals.
--Stephanie Gleason contributed to this article.
Write to Peg Brickley at peg.brickley@wsj.com
(END) Dow Jones Newswires
February 02, 2016 08:15 ET (13:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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