| NEW YORK
NEW YORK Aug 19 Ormet Corp is
negotiating with its equity owner for additional liquidity to
keep remaining aluminum operations running, after shutting down
two potlines late last week, a spokesman at the U.S aluminum
producer said on Monday.
On August 1, the Hannibal, Ohio-based company began shutting
two of the smelters' four operating potlines in order to keep
electricity costs under control while it waits for an August 27
hearing on the matter.
"We've asked for additional liquidity, which would assist us
to get through this--not just the hearing on the 27th, but the
Public Utilities Commission would then have to act," he said.
He added that the company was negotiating for additional
liquidity from its sole equity sponsor Wayzata Investment
Partners LLC to avoid having to completely curtail operations.
While shuttering the plant remains a possibility, the
spokesman said it was no longer imminent.
On June 3, Smelter Acquisition, LLC, a portfolio company
owned by Wayzata, acquired Ormet once the United States
Bankruptcy Court for the District of Delaware approved the sale.
Ormet filed for bankruptcy protection in February to
reorganize legacy costs related to retiree healthcare as it
struggled to control costs in the current low aluminum metal
price and high energy cost environment.
At a hearing set for August 27, the aluminum producer will
present its case to the Public Utilities Commission of Ohio for
a revised energy deal with power provider, Ohio Power, a unit of
American Electric Power Service Corp.
CEO Mike Tanchuk said in an interview with Reuters earlier
this month that restructuring Ormet's power costs was all that
was left for Ormet to emerge from bankruptcy.
Benchmark aluminum prices on the London Metal Exchange
have risen by $100 to $150 per tonne to around $1,900 a
tonne since the company began the potline shutdown, though they
remain well below the 2013 high at $2,184 a tonne.
"With the level of activity we have right now, higher prices
are not as large a help as we'd like it to be, but it's
certainly going in the right direction," the source said.
The smelter is currently producing at a rate of about 90,000
tonnes per year. The plant has a total of six potlines with an
annual capacity of about 270,000 tonnes per year.
The spokesman said Ormet has had to slow output at its
Burnside, La. alumina refinery to match Hannibal's lower output,
but no additional workers were laid off at the refinery.