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Magnetation Agreement Reached

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According to documents filed with the SEC, AK Steel entered into a global settlement agreement with Magnetation and its affiliates and JPMorgan Chase Bank, Associated Bank and BMO Harris Bank (as lenders under revolving credit facility) to terminate the iron ore pellet off-take agreement between Magnetation and AK Steel and to wind down Magnetation’s business.

Among other terms of the agreement, following U.S. Bankruptcy Court approval of the transaction, AK Steel has agreed to make a cash contribution of $37.5 million to Magnetation’s Chapter 11 estate. AK Steel’s off-take agreement with Magnetation will terminate, and AK Steel will cease purchasing iron ore pellets from Magnetation. This is expected to occur on or about September 30, 2016. Under the terms of the agreement, AK Steel is not obligated to make its $37.5 million payment until certain conditions are fulfilled, including Court approval of the settlement and termination of the off-take agreement with Magnetation.

The agreement also provides that AK Steel’s net payment may be partially offset based on certain factors, including the amount of proceeds generated from the eventual sale and/or liquidation of Magnetation’s plant, property and equipment and other assets. In addition, Magnetation may terminate the agreement if Magnetation receives a bona fide proposal for an alternative transaction that provides for a higher or better economic recovery to the Magnetation bankruptcy estate if Magnetation reasonably believes in good faith that such alternative transaction can be consummated in accordance with the U.S. Bankruptcy Code and other applicable law.

Read more Magnetation bankruptcy news.

The post Magnetation Agreement Reached appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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