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Molycorp is planning to file for bankruptcy protection, according to the Wall Street Journal. The news comes after Molycorp missed a $32.5 million bond interest payment this week.
Molycorp (NYSE:MCP) is planning to file for bankruptcy protection, according to the Wall Street Journal. The news comes after Molycorp missed a $32.5 million bond interest payment this week.
As quoted in the publication:
The Greenwood Village-based company is completing a plan that would involve senior bondholders exchanging some or all of their debt for ownership of the company, some of the people said. It is exploring options such as an equity sale to junior creditors and shareholders to ensure the company would emerge in sound financial health, they added.
Molycorp is also weighing an offer from the senior bondholders for a loan that would fund its operations during bankruptcy, the people said. Senior lender Oaktree Capital Management LP may also participate in that loan, they added.
The plans aren’t final and could change, the people cautioned. Companies and their advisers sometimes use the threat of bankruptcy to bring creditors and other stakeholders to the negotiating table.