Each one in plain English, with the numbers worked through for a shareholder.
1 Sept 2016bankruptcy or receivership▼ BadMajor
On August 31, 2016, Molycorp, Inc. and 14 other Plan Debtors emerged from Chapter 11, and all equity in the company (common and preferred stock, options, warrants and rights to acquire equity) was cancelled with no distributions to holders. This makes the plan confirmed in April 2016 effective and ends shareholders' position. The six Molycorp Minerals Debtors (the Mountain Pass entities) did not emerge: they remain in Chapter 11 under a court-appointed trustee, Paul E. Harner (appointed May 2, 2016), who has moved to dismiss their cases, with a hearing set for September 2016.
The bankruptcy court confirmed Molycorp's Chapter 11 plan on April 8, 2016. Because the sale process drew no bids big enough, the plan is a stand-alone reorganization of the downstream businesses (Chemicals & Oxides, Magnetic Materials & Alloys, Rare Metals), and the Mountain Pass assets go to the ad hoc 10% noteholders by credit bid (sale approved April 5, 2016). Molycorp, Inc. will be dissolved, with the new parent's equity going 92.5% to Oaktree and 7.5% to general unsecured creditors (both subject to dilution by the management incentive plan). All existing shares, including the common stock, are cancelled on the effective date with no distribution to shareholders. This resolves the open question of how common stock would be treated: it gets nothing.
On July 24, 2015 the bankruptcy court's final order made effective Molycorp's debtor-in-possession loan from lenders with Wilmington Trust as agent: up to $135,416,667 (including original issue discount), of which $21,978,022 was already advanced on an interim basis and a further $113,438,645 sits in a controlled account released subject to conditions. It matures at the earlier of acceleration or January 31, 2016, bears 7% cash plus 7% paid-in-kind interest, and is secured on substantially all assets of Molycorp and its guarantors. Milestones require a limited-operations plan for Mountain Pass by August 20, 2015, implementation by September 1 and completion by October 20, 2015; on a default, Molycorp must pursue a section 363 asset sale to repay the loan in full. This funds the Chapter 11 case begun June 25, 2015.
On June 25, 2015, Molycorp and certain U.S., Canadian, Barbadian and Luxembourg subsidiaries filed for Chapter 11 in Delaware (Case No. 15-11357), while its subsidiaries in Hong Kong, China, Thailand, Japan, Korea, Germany, UK, Estonia and Singapore, plus the Sri Lanka subsidiary and the Quapaw, Oklahoma joint venture, were not included. The filing triggered acceleration of its debt, including $206.505M of 2016 notes, $650M of 10% 2020 notes, $382.986M of 2017 notes, $148.939M of 2018 notes, $1.745M of Neo debentures, the Oaktree term loans ($50.167M and $60.0M, plus PIK interest) and the $143.689M equipment lease; enforcement is stayed by the bankruptcy. The NYSE suspended trading in the stock on June 25, 2015 and will delist it; Molycorp does not plan to appeal. The filing gives no treatment for shareholders, so their position is unresolved. This ends the listing-compliance thread from December 2014.
or OCM MLYCo PT, LLC, or OCM FIE, LLC, or Oaktree Capital Management, L.P, or Oaktree Holdings, Inc, or Oaktree Capital Group, LLC, or Oaktree Capital Group Holdings GP reported a Molycorp, Inc. shareholding of 6,119,340 shares (2.20% of votes) in a periodic institutional filing.
On December 30, 2014, the NYSE told Molycorp it fell short of listing rules because its average closing share price was below $1.00 over 30 consecutive trading days. Molycorp has six months to get back above $1.00 (on the last trading day of a month, both the closing price and the 30-day average at least $1.00) or the NYSE will begin suspension and delisting steps; shares keep trading meanwhile with a .BC flag. The company says it intends to cure the deficiency.
On November 20, 2014, Molycorp agreed with one noteholder to swap $27M of its 6.00% 2017 notes and $11M of its 5.50% 2018 notes (total $38M principal) for common stock with an agreed value of $15,960,000, between 11,239,436 and 15,056,603 shares depending on a seven-day average price ending December 2, 2014. Accrued interest is paid in cash. This cuts convertible debt by $38M at the cost of issuing new shares, which dilutes existing holders.
On September 11, 2014, Molycorp signed a $185.0M term loan with an Oaktree affiliate (OCM): $50.167M funded at closing and $134.833M of delayed-draw loans available only if conditions are met (adjusted EBITDA of at least $20.0M for two consecutive quarters and Mountain Pass production of at least 4,000 metric tons for two consecutive quarters, by the quarter ending March 31, 2016). Its subsidiary Magnequench signed a separate $75.0M loan ($60.0M funded, $15.0M delayed-draw), and Molycorp Minerals sold Mountain Pass equipment (parts of the co-generation plant, chloralkali facility and water treatment plant) to OCM for $139.833M and leased it back for five years with a $1 purchase option. Interest is 7% cash plus 5% paid in kind through June 14, 2016, with large early-repayment premiums (43.8% in the first year), and the debt is secured pari passu with the 2020 notes. Oaktree also received warrants for up to 24,477,395 shares (text truncated before further detail), so existing shareholders face potential dilution. The loans can accelerate if the 2016 and 2017/2018 convertible notes are not repaid or escrowed by set dates (April 30, 2016 and March 31, 2017, to specified residual amoun
Resource Capital Fund IV L.P, Resource Capital Associates IV L.P, RCA IV GP L.L.C reported a Molycorp, Inc. shareholding of 6,933,340 shares (2.80% of votes) in a periodic institutional filing.
Molycorp amended its May 20, 2014 auditor-change filing to add disclosure about KPMG Canada covering 2012, 2013 and the interim period to May 16, 2014. Otherwise it repeats the earlier text, with no new developments.
Molycorp dismissed PwC Canada, appointed only two months earlier, and approved KPMG Canada as auditor from the quarter ending June 30, 2014, subject to KPMG's client acceptance process. PwC Canada had issued no audit report. The filing says the same two material weaknesses were reported in the Q1 2014 10-Q, and says there were no disagreements.
Resource Capital Fund IV L.P, Resource Capital Associates IV L.P, RCA IV GP L.L.C disclosed a new substantial Molycorp, Inc. shareholding (4.50% of votes).
Molycorp dismissed PricewaterhouseCoopers (U.S.) as auditor on March 19, 2014 and appointed PwC Canada, starting with the quarter ending March 31, 2014. The filing says PwC U.S. gave an adverse opinion on internal controls at December 31, 2013 and that two material weaknesses were reported: too few accounting staff, and weak controls over its new ERP system. It follows the 2013 restatement, and the filing states no disagreements with the auditor.
