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Matt Lucke Buys Missouri Aluminum Smelter from Bankrupt Noranda for $13.7M

Matt Lucke Buys Missouri Aluminum Smelter from Bankrupt Noranda for $13.7M

Glencore plc (LSE: GLEN) (SEHK: 805) (JSE: GLN) top aluminum trader, who left Glencore after its merger with Xstrata a few months earlier. The court approval follows an auction that took place on September 28 with only two bidders. MFR II LLC, a company that specializes in industrial and commercial asset disposition and liquidation, submitted a slightly lower stalking horse bid for $13 million, according to S&P Global Platts. Noranda’s alumina refinery in Gramercy, Louisiana, and bauxite mining operation in St. Ann, Jamaica, were not included in the auction. With respect to its bauxite and alumina operations, Noranda, based in Franklin, Tennessee, continues to explore strategic alternatives, including discussions with potential acquirers, it said. Noranda filed for Chapter 11 bankruptcy in February as a result of a liquidity crisis, caused by declining global aluminum prices and the current commodities markets slump. The New Madrid smelter, idled since mid-March, has a production capacity of 263,000 metric tons of primary aluminum annually, at full capacity. It is fully integrated with its own raw material unloading facility, environmental control systems and aluminum reduction plant, including carbon anode fabrication. ARG officials reportedly did not visit New Madrid or the plant before purchasing it. “They kind of bid on it site unseen,” New Madrid city administrator Richard McGill told the Southeast Missourian. The plant site also includes a fabrication facility for the production of continuous cast rod, extrusion billet and foundry ingot. Formed in 1968, the smelter is located at a strategic mid-U.S. distribution point on the west bank of the Mississippi River, five miles south of the City of New Madrid in Southeast Missouri. The New Madrid smelter has been recently plagued with rising production costs due to increasing power rates from local electricity and gas utility Ameren Missouri. Noranda Aluminum, formerly Noranda Mines, was a mining and metallurgy company originally from Rouyn-Noranda, Quebec, Canada, founded in 1922. It was listed on the TSX under the symbol NRD.LV. After eventually acquiring a large interest in rival mining company Falconbridge, they merged in 2005. The combined company continued under the name Falconbridge Ltd until it was acquired by the Swiss-based mining company Xstrata (Schweiz) AG. In 2007, global private equity firm Apollo Global Management (NYSE: APO) acquired a portion of the aluminum business from Xstrata and renamed it Noranda. After taking the company public in 2010, Apollo remained Noranda’s largest shareholder with a 33% equity stake. In May 2015, Apollo sold all of its Noranda shares in a secondary public offering. ARC will be facing massive competition from global giants, including Century Aluminum Co. (NASDAQ: CENX), a U.S.-based producer of primary aluminium formed by Lucke’s former employer Glencore in 1995, with aluminum smelters in the US and Iceland. Century is the second-largest producer of primary aluminium in the U.S. after Alcoa Inc (NYSE: AA). A month ago, Zhongwang USA LLC, led by Chinese billionaire Liu Zhongtian, founder of China Zhongwang Holdings Ltd (HKEX: 01333), the world’s second largest industrial aluminum extrusion developer and manufacturer, agreed to acquire Cleveland, Ohio-based Aleris Corp., a global aluminum rolled products producer, for $2.33 billion. Since 2010, Aleris has been owned and controlled by private equity firms Oaktree Capital Management LP (NYSE: OAK), Apollo Management LP (NYSE: APO), and Sankaty Advisors LLC owning minority interests. In July, Russia’s leading aluminum producer United Co. Rusal (SEHK: 486; EN: RUSAL; MCX: RUAL/RUALR) agreed to sell a 100% stake of its Alumina Partners of Jamaica (Alpart) to Jiuquan Iron & Steel Co. Ltd., a Chinese state owned enterprise, for $299 million. Rusal’s chairman, president, and largest shareholder is Russian billionaire Oleg Deripaska, the founder and owner of Basic Element, one of the largest Russian industrial groups, and president of En+ Group. The former metals trader “came back from the brink of collapse, facing margin calls and billions of dollars in debt triggered by the 2008 financial crisis,” according to Forbes, and has a net worth recently valued at $3.3 billion.]]>

Chilean Copec to Acquire Mapco C-Stores From Delek US $DK for $535M

Chilean Copec to Acquire Mapco C-Stores From Delek US $DK for $535M

Compañía de Petróleos de Chile COPEC SA (SNSE: COPEC) agreed to acquire MAPCO Express Inc. convenience stores from Delek US Holdings Inc. (NYSE: DK) for $535 million in cash. The deal has received unanimous approval of both boards of directors and is expected to close by year-end, subject to customary regulatory and closing conditions. COPEC will be fund the acquisition with cash on hand. Debt associated with the MAPCO retail assets, amounting to approximately $160 million at June 30, 2016, will be repaid at closing. As part of the deal, Delek will continue to supply fuel to certain MAPCO retail locations under an 18-month supply agreement. MAPCO is a leading convenience store chain with 348 corporate stores operating primarily in Tennessee, Alabama and Georgia, with an additional presence in Arkansas, Virginia, Kentucky and Mississippi. MAPCO operates company stores under the banners MAPCO Express, MAPCO Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart. In addition, MAPCO provides fuel to 142 dealer locations as of July 31, 2016, and provides logistical fuel transportation to MAPCO and third parties with approximately 50 tractors and trailers. COPEC is expected to retain MAPCO’s current retail team to provide for a seamless entrance into the U.S. convenience store market. The deal comes a week after Canadian Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B), one of the world’s largest company-owned convenience store operators, agreed to acquire San Antonio, Texas-based CST Brands Inc. (NYSE: CST) for $4.4 billion. CST operates over 2,000 locations throughout the Southwestern United States with an important presence in Texas, Georgia, the U.S. Southeast Region, New York and Eastern Canada. CST also controls the general partner of CrossAmerica Partners (NYSE: CAPL), a gas distributor to more than 1,100 locations in the United States. COPEC is one of the largest companies in Chile, operating in fuel and lubricants distribution and convenience stores. The company has an existing presence in the convenience stores market, with the largest convenience store network in Chile and 53% of the Chilean gasoline market share, with 626 company and dealer operated service stations, 82 Pronto-branded convenience stores and 220 Punto-branded convenience stores. COPEC is an industry innovator with Pagoclick (mobile pay), Zervo (self-serve fueling dispenser) and leading convenience store developer with multiple formats for urban, suburban and highway locations. In addition, COPEC has a 58.9% ownership stake in Bogota, Colombia-based Organizacion Terpel SA (BVC: TERPEL), which accounts for approximately 45% of Colombia’s fuel market share. Terpel has 1,949 Terpel-branded gas stations in Colombia and 233 stores in Panama, Ecuador, Peru and Mexico under store brands Altoque and Deuna selling Terpel-branded fuel. COPEC was founded in 1934 and is headquartered in Santiago, Chile. Through its subsidiary Celulosa Arauco, it has a commercial presence in over 80 countries, with production facilities in Chile, Argentina, Brazil, Canada, the United States and Uruguay. AntarChile SA (SNSE: ANTARCHILE) has a 60% controlling stake in COPEC. “The acquisition of MAPCO represents an important step for COPEC’s entry into the U.S. convenience store market, which has been identified as a key strategic growth opportunity,” said COPEC CEO Lorenzo Gamuri. “MAPCO’s assets are located in a geographic zone with interesting demographic attributes and with the size for a proper competitive operation in the US market.” “After buying into the control of Organización Terpel in 2010, this is the second significant step to transform Copec into a broader company in the fuel retail and convenience store market,” added Gamuri. “The sale of MAPCO to COPEC allows Delek to simultaneously unlock the value of these assets and gain a continuing competitive partner in retail fuel sales,” said Delek chairman, president, and chief executive Uzi Yemin. Delek’s exclusive financial advisor was RBC Capital Markets LLC. COPEC’s financial advisor was Raymond James & Associates Inc. and legal advisor was Simpson Thacher & Bartlett LLP. Delek US is a diversified downstream energy company with assets in petroleum refining, logistics and convenience store retailing. The refining segment consists of refineries operated in Tyler, Texas, and El Dorado, Arkansas, with a combined nameplate production capacity of 155,000 barrels per day. Delek US also owns 62 percent of Delek Logistics Partners LP (NYSE: DKL), focused on midstream energy infrastructure assets. Delek US also owns 48 percent of Alon USA Energy Inc. (NYSE: ALJ). Delek US is headquartered in Brentwood, Tennessee and employs more than 4,000 people across the eight states. Delek Group owns a stake of nearly 8 percent in Delek US, which has a market capitalization of $1.08 billion. The Delek Group (TASE: DLEKG) (OTCQX: DGRLY), controlled by Israeli billionaire Isaac Tshuva, is a dominant integrated energy company in Israel, and a pioneering leader of the natural gas exploration and production activities that are transforming the Eastern Mediterranean’s Levant Basin into one of the energy industry’s most promising emerging regions. Having discovered Tamar and Leviathan, two of the world’s largest natural gas finds since 2000, Delek and its partners are now developing a balanced, world-class portfolio of exploration, development and production assets with total gross natural gas resources discovered since 2009 of approximately 37 TCF. In addition, Delek Group has a number of assets in downstream energy, water desalination, and the finance sector. The company has a market capitalization of $2.37 billion.]]>