Ormet seeks approval of $130 million stalking horse bid for all assets

By Jim Witters

Wilmington, Del., April 17 - Ormet Corp. is seeking approval of a $130 million stalking horse bid from Smelter Acquisition LLC as the successful bidder in the sale of substantially all of the company's assets, according to an April 16 filing with the U.S. Bankruptcy Court for the District of Delaware.

The motion came even as the debtors continue to market the assets under a bid procedures order issued March 21.

"The stalking horse bidder is the only party that submitted a concrete proposal to purchase the assets during the pre-petition marketing efforts. The debtors are continuing their marketing efforts and maintain dialogue with interested parties. To date, the debtors have not received additional bids," the motion states.

The bid deadline is May 8.

Smelter Acquisition is a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC.

Some affiliates of Smelter Acquisition are substantial holders of Ormet's common stock, collectively controlling about 47% of the equity.

Wayzata entities also are the pre-petition term loan lenders and debtor-in-possession term loan lenders.

"No employees, officers, directors or agents of the Wayzata affiliates sit on any of the debtors' boards of directors and the Wayzata affiliates do not exercise control over the debtors. The debtors assert that the stalking horse agreement was negotiated in good faith and at arm's length and that the approved bidding procedures will provide for an open and fair sale process. The debtors will consider sales to any insider of the debtors," the motion states.

The auction, if needed, will be May 13. Bids at auction must be made in minimum increments of $1 million.

A sale hearing is scheduled for 10:30 a.m. ET on May 15.

Ormet, a Hannibal, Ohio-based producer of aluminum, filed for bankruptcy on Feb. 26. The Chapter 11 case number is 13-10334.

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