Sweden's Grä nges Offers $300 Million for Noranda Foil Business
June 14 2016 - 9:50AM
Dow Jones News
Sweden's Grä nges AB will lead the bidding at a bankruptcy
auction for the aluminum foil rolling business of Noranda Aluminum,
with an offer valued at about $300 million.
The planned sale of Noranda's foil business is a key component
of the company's effort to address its debts in its chapter 11
restructuring. Plants in the southeastern U.S. are the most
profitable part of Noranda's operation, producing heavy-gauge and
light-gauge foil, consumer foils and sheet products.
Customers include makers of air conditioners, transformers,
containers and packaging. Grä nges is one of the world's largest
manufacturers of rolled aluminum for aluminum heat exchangers.
Grä nges said the proposed acquisition of Noranda's plants is
"in line with Grä nges' stated strategy to establish production
capacity in North America and to grow into adjacent market segments
in the aluminum rolling industry."
Noranda, based in Franklin, Tenn., filed for chapter 11
bankruptcy in February, having already agreed to sell its aluminum
foil operations to appease senior creditors.The company's balance
sheet was weighed down with nearly $530 million in secured loans,
as well as $175 million in unsecured bond debt.
Bankruptcy court papers outlining the Grä nges bid put the price
on the plants at $302.5 million, including net cash consideration
of $288 million, subject to adjustment due to fluctuation in
working capital.
According to court papers, Granges will make an offer to unions
representing workers at the North Carolina and Arkansas plants to
assume the labor contracts. Granges will also assume the union
pension plans, court papers say.
The plants are located in Huntingdon, Tenn., Newport, Ark., and
Salisbury, N.C.
Noranda's junior creditors lobbied to delay the bankruptcy
auction, which originally had a target date in May. Noranda is
holding open the door to competing bids until June 29. The auction
is scheduled for July 7, with results to be reviewed at a hearing
in the U.S. Bankruptcy Court in St. Louis July 14.
Write to Peg Brickley at peg.brickley@wsj.com
(END) Dow Jones Newswires
June 14, 2016 09:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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