KINGSTON, Jamaica — Noranda Aluminum Holding Corporation (NAHC) announced today through NASDAQ that the company and all of its wholly-owned direct and indirect subsidiaries have filed voluntary petitions for a court-supervised restructuring process under Chapter 11 of the United States Bankruptcy Code in the US Bankruptcy Court for the Eastern District of Missouri.

Noranda in its filing said it has taken the action to have additional time and room to assess options available for its assorted business operations

NACH is parent company of the St Ann, Jamaica -based Noranda Bauxite Limited, which recently was affected by changes to mining targets and workforce reduction, conditions reflective of a company-wide retrenchment which started in January. 

In a 10K filing made to the US Securities and Exchange Commission (SEC) earlier in 2015, the company had disclosed substantial indebtedness, “which could adversely affect its “ability to raise additional capital to fund our operations”. As of December 31, 2014, total indebtedness was US$668 million.

In mid-January NAHC initiated workforce reductions, disclosing that that the filing of a case under Chapter 11 of the Bankruptcy Code by a significant bauxite customer, Sherwin Alumina Company, LLC, could result in material reductions to both alumina production and bauxite mining plans.

The company had indicated planned cutbacks might be mitigated if it could negotiate meaningful and substantial fiscal regime relief with the Government of Jamaica -including tax and production levy relief.

NAHC has been protesting the arbitration approved production levy which doubled this tax expense for the 2015 period and going forward.

It was also indicated that it needed substantial cost reductions across the board and also secure suitable replacement volume for alumina currently provided to the New Madrid smelter. 

NASDAQ reports that, in conjunction with the filing, 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 provided by certain existing term loan lenders.

Upon approval by the Court, the new financing, combined with cash generated from the Company’s ongoing operations, will be used to support the business during the court-supervised process.

Noranda’s President and Chief Executive Officer, Kip Smith,  was quoted as saying, “In light of the challenging market conditions for the aluminium industry and the recent disruptions in our primary business operations, the Board and management team, with the support of our principal lenders, determined that undertaking this court-supervised process is in the best interests of Noranda and its stakeholders. We believe this court-supervised process will provide us with time and financial flexibility to evaluate options to enhance the sustainability of our major business operations.”

Avia Collinder