NASHWAUK, Minn.--(BUSINESS WIRE)--Mesabi Metallics Company LLC (Mesabi) announced it has emerged from bankruptcy under the ownership of Chippewa Capital Partners, LLC (Chippewa). Mesabi’s chapter 11 plan of reorganization, sponsored by Chippewa, was confirmed by the U.S. Bankruptcy Court for the District of Delaware in June 2017 and became effective December 22, 2017.
Tom Clarke, Chippewa principal, and Mesabi’s new Chief Executive Officer praised the efforts of Governor Dayton, the Minnesota Department of Natural Resources, and the Itasca County Board of Commissioners, who worked closely with the Mesabi and Chippewa teams to achieve last Friday’s success. Chippewa expresses its appreciation to the northern Minnesota contractors for their patience and commitment to finish the multi-billion-dollar project. Chippewa provided the funding for Mesabi to make the deferred mechanic lienholder payments last Friday, over three years ahead of schedule. Mechanic lienholders have now received all of the payments provided for under the Mesabi plan of reorganization. Mesabi is working with an international team of experts including Kiewit, Tenova, and Danieli to complete the 7.0 mmtpa Metso pellet plant and the 2.0 mmtpa HYL hot briquetted iron/pig iron plant.
Clarke emphasized the project’s international collaboration with equity investors on three continents and pellet sales with a global reach. The project is intended to provide substantial employment and tax benefits to northern Minnesota throughout the construction period and for decades to come. The former Magnetation, LLC assets owned by ERP Iron Ore, LLC (ERPI) will be integrated into the Mesabi operations providing an additional 3.0 mmtpa of pellet production through ERPI’s Indiana Metso pellet plant. Minnesota iron ore from ERPI’s mining operations will be used to produce pig iron in Lorain, Ohio through a joint-venture with Republic Steel.
David Pauker, Mesabi’s Chief Restructuring Officer throughout the chapter 11 case, said, “The bankruptcy raised the very real prospect of liquidation. Instead, on emergence from bankruptcy, contractors and others who worked on the project received 75 cents on the dollar and lenders received a notional recovery of 30 cents, including new bonds. This was only made possible by the State’s willingness to work with creditors and our new investors to avoid a liquidation, save the Nashwauk project, and ensure creditors receive a recovery. I wish Tom Clarke and his team the best of luck.”