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Court Confirms Molycorp’s Plan of Reorganization

April 04, 2016, 07:36 AM
Filed Under: Bankruptcy

Molycorp, Inc., a global producer of advanced rare earth and rare metal based engineered materials used in many electronic, transportation, industrial and clean energy applications, announced  that its Fourth Joint Amended Plan of Reorganization (“the Plan”) was confirmed by the U.S. Bankruptcy Court for the District of Delaware.  The confirmation is one of the final steps before Molycorp will be able to emerge from Chapter 11 protection as a newly reorganized company.

The confirmed Plan allows Molycorp’s downstream business units, Chemicals & Oxides, Magnequench, and Rare Metals to reorganize under new ownership with a significantly stronger balance sheet. The Plan features a settlement agreement between an affiliate of funds managed by Oaktree Capital Management L.P. (“Oaktree”), a secured creditor, and unsecured creditors, pursuant to which Oaktree will receive 92.5% of the equity and the unsecured creditors will receive 7.5% of the equity in the reorganized company.  A settlement also was reached on the purchase through a credit bid by the ad hoc group of the Company’s 10% secured noteholders of the mineral rights and certain intellectual property of Molycorp Minerals (the “Sale”). The ad hoc group of 10% secured noteholders was the last major secured creditor group with which the Company had not reached a settlement in a mediation process that spanned several months.
Molycorp’s Mountain Pass mine was excluded from the Plan, and the equipment and surface property rights at the mine were excluded from the Sale.

“The Plan confirmation is a major step forward for the Company,” stated Geoff Bedford, Molycorp President and Chief Executive Officer.  “Throughout this nine month process, we have made every effort to continue to run our business and service our customers and we thank them for our support and patience.  I also want to acknowledge all of our advisors and employees who have worked tirelessly during this time and helped us to reach this day.”

When the Plan becomes effective, Molycorp will emerge as a privately held company with a sustainable balance sheet and strong financial partners.

Molycorp has been advised by the investment banking firm of Miller Buckfire & Co. and received financial advice from AlixPartners, LLP.  Jones Day and Young, Conaway, Stargatt & Taylor LLP served as legal counsel to the Company in this process.

Molycorp produces high-purity, custom engineered rare earth and rare metal products to meet increasingly demanding customer specifications.

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