International –Molycorp, the bankrupt rare earths producer which is in the process of shutting down its Mountain Pass operation in California, has requested that potential interested buyers submit their bids by 1 December 2015.
The first round of bids is expected to draw a number of interested parties from Asia and Europe including one of the few major rare earths companies outside of China – Australia’s Lynas Corp.
Since filing for bankruptcy in June, the company and its affiliated debtors have further filed a joint plan of reorganisation with the U.S. Bankruptcy Court for the District of Delaware that proposes an emergence from Chapter 11 through either a stand-alone reorganisation that would substantially de-lever its balance sheet or a sale of substantially all of its assets.
The plan, which represents a major process milestone in Molycorp’s bankruptcy process, envisions a dual-track process pursuant to which the company’s assets are being actively marketed for sale, either as a whole or through the separate sale of its business units.
The company’s four business units, Chemicals & Oxides, Magnetic Materials & Alloys, Rare Metals, and Resources, consists primarily of its assets at Mountain Pass.
The company will pursue a plan process to sell its assets if the bid or bids received exceed certain value thresholds set forth in the plan.
If the bids do not exceed the threshold values, the company will be reorganised with Oaktree Capital Management as its shareholder around its Chemicals & Oxides, Magnetic Materials & Alloys, and Rare Metals business units, and its assets at Mountain Pass will be sold.
“If approved, the plan would help to significantly reduce our $1.9 billion of debt and cut our interest expense, putting us on a more solid financial and operational footing going forward,” says Molycorp president and CEO Geoff Bedford.