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New Day Aluminum wins auction for Noranda's upstream Louisiana, Jamaica assets

New Day Aluminum, whose parent company is headed by the former senior management of Wise Metals, was the successful bidder for the remaining upstream assets of US-based producer Noranda Aluminum.

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In winning the assets, New Day edged out ARG International AG, which recently bought Noranda's idled, 263,000 mt/year New Madrid primary aluminum smelter in southeastern Missouri, according to a court filing Thursday.

New Day, the designated stalking horse bidder in a court-sanctioned auction that began Tuesday in the New York City law offices of Noranda's lead attorneys, emerged the winner with a final offer of $24.43 million -- $2.93 million above its previous proposal of $21.5 million and $430,000 above the $24 million final bid by Stockholm-based ARG, which formed in 2013 by former Glencore official Matthew Lucke.

Noranda plans to ask Judge Barry Schermer of the US Bankruptcy Court for the Eastern District of Missouri in St. Louis later Thursday afternoon to approve the sale of its 1.2 million mt/year Gramercy alumina refinery in Louisiana and St. Ann bauxite mining operation in Jamaica to New Day.

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If the judge approves the sale, the book essentially will close on the disposition of Noranda's most valuable upstream and downstream assets. The Franklin, Tennessee-based company filed February 8 for Chapter 11 bankruptcy reorganization, but since decided to sell off its assets and effectively go out of business.

According to a court filing, PJT Partners, a restructuring and special situations group that served as Noranda's investment banker, began soliciting interest in July for the potential sale of Gramercy and St. Ann.

Of the 42 parties PJT contacted, 25 executed non-disclosure agreements and six submitted non-binding letters of interest, variously proposing to buy the refinery and bauxite mining operation for $35 million-$125 million, according to the filing.

New Day eventually was selected to serve as stalking horse bidder after six unidentified parties were provided with more detailed financial information and a management presentation on Gramercy and St. Ann in the second round of the sale process.

Following New Day's selection as stalking horse bidder, PJT contacted three remaining parties that had participated in the second round and had indicated interest in taking part in the auction.

Before this week's auction, Noranda received a bid from ARG, which previously agreed to buy the smelter for $13.7 million. Officials with New Day and ARG could not be reached Thursday for further comment.

Switzerland-based Granges acquired Noranda's downstream business, comprising three aluminum rolling mills in Tennessee, Arkansas and North Carolina, with combined annual capacity of 495 million pounds, in August for $324.2 million.

--Bob Matyi, newsdesk@spglobal.com

--Edited by Valarie Jackson, valarie.jackson@spglobal.com