Interest exists in restarting Ormets Hannibal smelter: Calibre Group official Washington (Platts)--21Mar2014/408 pm EDT/2008 GMT Bankrupt US aluminum producer Ormet Corp.s idled 260,000 mt/year Hannibal aluminum smelter in southeastern Ohio could be restarted if current expressions of interest translate into formal purchase offers, Toby Kreidler, a principal in Calibre Group, the company tasked with finding a buyer for the smelter, said Friday. In an interview, Kreidler said he expects to get one or more offers before the end of March that could lead to the plants eventual reopening. Hannibals final two potlines were shut in mid-October. Im feeling cautiously optimistic, he said. Theres some folks in the running that certainly are capable, from the perspective of their size and sophistication, to manage a restart. Since Calibre received approval more than a month ago from Judge Mary Walrath of the US Bankruptcy Court for the District of Delaware to market the smelter, the plant has had a number of visits from potential operators and redevelopment groups, said Kreidler, who declined to identify any of the prospective buyers. Theres fairly substantial interest in both of those buckets, he said. Calibre has asked the parties to submit preliminary indications of interest in acquiring Hannibal by Monday, although that is not a hard deadline. We expect to get some offers, he said. Some potential bidders might not be ready by Monday, he said. Calibre plans to accept additional offers for at least a number of days afterward. While the hunt for a buyer is ongoing, Calibre also is talking with various constituencies with Ohio state government about a solution to the electricity rate problem that caused Ormet to close the smelter last fall. The six-potline smelter finally was closed after the Public Utilities Commission of Ohio approved only a portion of the power rate relief Ormet sought. The PUC, in particular, failed to grant Ormets request to begin buying power on the wholesale market for Hannibal. In terms of a possible restart, The key piece obviously is power, power, power for everybody, Kreidler said. Ohios Republican governor, John Kasich, has been criticized for not personally interceding with the PUC to approve Ormets application. Kasichs press secretary, Rob Nichols, has said his boss does not have the legal authority to tell the commission what to do. Low aluminum prices are another concern, Kreidler said, adding London Metal Exchange prices are still a pressure that nobody has any control over. After filing for Chapter 11 bankruptcy reorganization February 25, 2013, Ormet appeared to have a buyer in Minnesotas Wayzata Investment Partners, but that deal collapsed after the PUC decision in October. Since then, Ormet has been selling off key assets, including its 540,000 mt/year Burnside alumina refinery in Louisiana. But Kreidler said the divestitures would not necessarily preclude a possible smelter restart. --Bob Matyi, newsdesk@platts --Edited by Valarie Jackson, valarie.jackson@platts
Posted on: Fri, 21 Mar 2014 23:52:49 +0000