Noranda Aluminum files for bankruptcy protection

ALBANY (Scrap Monster): The US Aluminum producer Noranda Aluminum and all of its wholly-owned direct and indirect subsidiaries have filed voluntary petitions for a court-supervised restructuring under Chapter 11. The filing under Chapter 11 of the US Bankruptcy Code was made in the US Bankruptcy Court in the Eastern district of Missouri.

The Franklin, Tenn.-based company will sell three rolling mills that make up its downstream business. However, the company will continue to operate the primary aluminum production facility in Gramercy, La. The company is granted 45 days time to get court approval for the restructuring plans. Upon approval, it will start selling the flat-rolled products business.

According to reports, Noranda has entered into an agreement in principle with its existing lenders for up to US$130 million in debtor-in-possession (DIP) financing and has received a commitment for up to US$35 million in incremental financing. Noranda's President and Chief Executive Officer, Kip Smith stated that the court-supervised process will provide us with time and financial flexibility to evaluate options to improve sustainability of primary business operations.

The court filing indicates that Noranda has assets and liabilities between $1 billion and $10 billion. There are nearly 5,000 creditors in total. The company owes $175 million to the US Bank National Association US Bank Global Trust Services, thus making it the largest creditor. The second largest creditors are Surelia Investments with a claim of $16.88 million.

Meantime, the company has decided to permanently shut doors of the 263,000 mt/year New Madrid primary aluminum smelter in New Madrid during March this year.

A bankruptcy-court hearing is scheduled to be held today.

Noranda Aluminum Holding Corporation is a leading North American integrated producer of value-added primary aluminum products and high quality rolled aluminum coils. Noranda is comprised of an upstream primary metals division and a downstream rolled products division.