UPDATE 1-Rare earths miner Molycorp files for Chapter 11 bankruptcy

Thu Jun 25, 2015 4:18am EDT
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June 25 (Reuters) - Molycorp Inc, the only U.S. supplier of rare earths, filed for Chapter 11 bankruptcy protection on Thursday along with its North American subsidiaries to restructure $1.7 billion of debt in its U.S. and Canadian operations.

Molycorp, whose shares have lost 86 percent of their value in the past year, said it had obtained agreement for up to $225 million in new debtor-in-possession (DIP) financing.

The company this month missed a $32.5 million interest payment on its senior secured notes, triggering concerns that it could file for bankruptcy before the end of the month.

The Greenwood, Colorado-based company listed assets and liabilities of more than $1 billion in its petition in the Delaware bankruptcy court.

Molycorp's operations outside of North America, with the exception of non-operating companies in Luxembourg and Barbados, are excluded from the filing. Molycorp Rare Metals (Oklahoma) LLC is also excluded.

The company, which reported a loss for the thirteenth straight quarter in May, had warned in March that it might not have enough money to stay afloat if its debt restructuring efforts failed.

The company's shares closed on Wednesday at $0.36, down from $2.53 a year ago. The stock traded at $79.16 at its peak four years ago.

Rare earths are used in a range of products from smartphones to military jet engines to hybrid vehicles. China controls roughly 90 percent of the world's supply of rare earths.

The case is in U.S. Bankruptcy Court, District of Delaware, Case No: 15-11357. (Reporting by Rama Venkat Raman and Anannya Pramanick in Bengaluru; Editing by Gopakumar Warrier)