Rare earths producer Molycorp files for bankruptcy protection
by Canadian Manufacturing.com Staff
Company looks to refinance $1.7B in debt
GREENWOOD VILLAGE, COL—The only American rare earths miner and producer has filed for bankruptcy protection.
The company announced an agreement that will provide a financial restructuring of the company’s US$1.7 billion in debt and provide up to $225 million in gross proceeds in new financing to support operations while the company completes negotiations with creditors.
Operations outside of North America are excluded from the filings. Molycorp does have some Canadian operations, however, with corporate offices in Toronto as well as research and development and production facilities in Peterborough, Ont.
The filing was not wholly unexpected after the company missed a $32.5-million interest payment on its senior secured notes.
“The actions we have taken today are important steps toward achieving a restructuring of our $1.7 billion debt with our major creditor constituencies. In doing so, the Company expects to exit Chapter 11 with an appropriate financing framework to support our business going forward,” Geoff Bedford, Molycorp president and CEO, said.
The company said employees are working their usual schedules, the purchasing of goods and services will continue, with all purchases made after today’s filings granted a special administrative priority under the law.
After going public in 2010, the company’s value surged to more than $6-billion, with shares peaking at $79.16. As of the bankruptcy protection filing five years later, shares were trading a 36-cents. Surging exports of rare earths from China have been consistently cited as the cause of the company’s dramatic decline.