Sweden's Grä nges Offers $300 Million for Noranda Foil Business

Sweden's Grä nges AB will lead the bidding at a bankruptcy auction for the aluminum foil rolling business of Noranda Aluminum, with an offer valued at about $300 million.

The planned sale of Noranda's foil business is a key component of the company's effort to address its debts in its chapter 11 restructuring. Plants in the southeastern U.S. are the most profitable part of Noranda's operation, producing heavy-gauge and light-gauge foil, consumer foils and sheet products.

Customers include makers of air conditioners, transformers, containers and packaging. Grä nges is one of the world's largest manufacturers of rolled aluminum for aluminum heat exchangers.

Grä nges said the proposed acquisition of Noranda's plants is "in line with Grä nges' stated strategy to establish production capacity in North America and to grow into adjacent market segments in the aluminum rolling industry."

Noranda, based in Franklin, Tenn., filed for chapter 11 bankruptcy in February, having already agreed to sell its aluminum foil operations to appease senior creditors.The company's balance sheet was weighed down with nearly $530 million in secured loans, as well as $175 million in unsecured bond debt.

Bankruptcy court papers outlining the Grä nges bid put the price on the plants at $302.5 million, including net cash consideration of $288 million, subject to adjustment due to fluctuation in working capital.

According to court papers, Granges will make an offer to unions representing workers at the North Carolina and Arkansas plants to assume the labor contracts. Granges will also assume the union pension plans, court papers say.

The plants are located in Huntingdon, Tenn., Newport, Ark., and Salisbury, N.C.

Noranda's junior creditors lobbied to delay the bankruptcy auction, which originally had a target date in May. Noranda is holding open the door to competing bids until June 29. The auction is scheduled for July 7, with results to be reviewed at a hearing in the U.S. Bankruptcy Court in St. Louis July 14.

Write to Peg Brickley at [e-mail]

(END) Dow Jones Newswires

June 14, 2016 09:35 ET (13:35 GMT)

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