UPDATE 1-Noranda Aluminum hit by commodity crash, seeks bankruptcy
(Adds details on sales process, underfunded pensions, legal disputes and shares)
By Shivam Srivastava and Tracy Rucinski
Feb 8 (Reuters) - Noranda Aluminum Holding Corp, which smelts and refines aluminum and mines bauxite, filed for bankruptcy on Monday and joined a growing list of commodity-related businesses in Chapter 11.
Over the past year scores of commodity-related businesses have filed for bankruptcy as prices for metals, energy and coal have plummeted amid a slowdown in markets such as China and Brazil.
Noranda is putting its profitable flat-rolled products business up for sale to raise cash and is winding down a key smelting plant in New Madrid, Missouri, where production will halt around March, court documents showed.
The Franklin, Tennessee-based company, whose competitors include Alcoa Inc and Kaiser Aluminum Corp, said challenging market conditions made business without court protection unsustainable.
"This is due to a number of factors, principal among them is the sustained and dramatic decline in the price of primary aluminum," Chief Financial Officer Dale Boyles said in a filing with the U.S. Bankruptcy Court of Eastern Missouri.
Noranda, with $530 million of secured debt, is seeking up to $130 million in debtor-in-possession (DIP) financing to help fund its business. It has already received commitments for about $35 million.
A failure to achieve adequate funding could force it to idle more facilities and liquidate on a piecemeal basis, CFO Boyles said. Continued...