Molycorp, Inc. and its affiliated debtors today filed a joint plan of reorganization with the U.S. Bankruptcy Court for the District of Delaware that proposes an emergence from Chapter 11 through either a stand-alone reorganization that would substantially de-lever its balance sheet or a sale of substantially all of its assets. 

The Plan represents a major process milestone in Molycorp’s bankruptcy process and, if approved, would position the Company to successfully emerge from Chapter 11. The Plan is supported by the Company’s largest pre-petition secured creditor and its post-petition lender, investment funds managed by Oaktree Capital Management, L.P. and its affiliates.

The Plan envisions a dual-track process pursuant to which the Company’s assets are being actively marketed for sale, either as a whole or through the separate sale of its business units.  The Company’s four business units are Chemicals & Oxides, Magnetic Materials & Alloys, Rare Metals, and Resources, which consists primarily of its assets at Mountain Pass.  The Company will pursue a plan process to sell its assets if the bid or bids received exceed certain value thresholds set forth in the Plan.  If the bids do not exceed the threshold values, the Company will be reorganized with Oaktree as its shareholder around its Chemicals & Oxides, Magnetic Materials & Alloys, and Rare Metals business units, and its assets at Mountain Pass will be sold.

The Company has begun reaching out to a broad range of prospective buyers. The first round of non-binding indications of interest are due by December 1, 2015. Interested parties should contact Alexander Tracy of Miller Buckfire at Alexander.tracy@millerbuckfire.com.

“If approved, the Plan would help to significantly reduce our $1.9 billion of debt and cut our interest expense, putting us on a more solid financial and operational footing going forward,” said Geoff Bedford, Molycorp President and Chief Executive Officer.

Molycorp and its North American subsidiaries, together with certain of its non-operating subsidiaries outside of North America, filed voluntary petitions under Chapter 11 of the Bankruptcy Code with the Court on June 25, 2015.  The Company’s operations outside of North America, with the exception of non-operating companies in Luxembourg and Barbados, were excluded from the filings.  Molycorp Rare Metals (Oklahoma), LLC, with operations in Quapaw, Oklahoma, also was excluded from the filings as it is not 100% owned by the Company.

Molycorp is being advised by the investment banking firm of Miller Buckfire & Co. and is receiving financial advice from AlixPartners, LLP.  Jones Day and Young, Conaway, Stargatt & Taylor LLP have acted as legal counsel to the Company in this process.