November 23, 2020 – Further to a November 6th bidding procedure order [Docket No. 153] and the completion of a November 16th auction, the Court hearing the Energy Alloys Holdings cases issued an order approving the $16.4mn sale of Debtors’ “equity interests in their eastern hemisphere (“EH”) assets” (i.e., interests in non-Debtor foreign subsidiaries with direct or indirect operations in the United Kingdom, Singapore and Dubai) to stalking horse BioUrja Commodities, LLC (“BioUrja”) [Docket No. 235].

The November 10, 2020 BioUrja asset purchase agreement (the "APA") and a subsequent November 17th amendment (which included, inter alia, a slight increase in purchase price, from $16.338mn to $16.4mn) are attached to the order. The role of YAS International, LLC (“YAS”) as the backup bidder was also confirmed by the Court, with the YAS APA at Docket No. 194.

Key Terms of the BioUrja APA:

• Seller: Energy Alloys, L.L.C.
• Buyer: BioUrja Commodities, LLC
• Purchase Price: Aggregate Closing Consideration” means an amount equal to the result of: (A) $16.4mn (the “Base Purchase Price”), minus (B) the outstanding amount of Indebtedness set forth on the Payoff Letters received from the Persons identified on the Closing Indebtedness Schedule as of the Closing, plus (C) the amount, if any, by which Net Working Capital exceeds the Net Working Capital Target, minus (D) the amount, if any, by which Net Working Capital is less than the Net Working Capital Target, plus (E) the Closing Date Cash Amount, minus (F) any Company Group Transaction Expenses.
• Bidder Protections: Break-up fee of 3% and expense reimbursement of $100k.

Background

On September 9, 2020, Energy Alloys Holdings LLC and seven affiliated Debtors (“Energy Alloys” or the “Debtors,” more than 99% owned by Blackstone/GSO Capital Solutions Fund L.P.) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 20-12088 (Judge Walrath). At filing, the Debtors, a supplier of specialty metals to the global oilfield industry, noted estimated assets between $10.0mn and $50.0mn and estimated liabilities between $100.0mn and $500.0mn (funded debt of $97.3mn). 

On November 17, 2020, the Debtors designated BioUrja as the successful bidder for the EH assets and YAS as the backup bidder [Docket No. 194].

Marketing Efforts

The Debtors' bidding procedures motion [Docket No. 79] states, “…in March 2020, the Debtors determined, after considerable discussion and analyses, that these initial restructuring actions were insufficient to address the speed and severity of financial distress facing the Debtors’ Western Hemisphere business. As such, the Debtors determined that it was in the best interests of the Debtors and their estates, and necessary to maximize the value of their estates, to begin an orderly liquidation of their Western Hemisphere assets and to begin evaluating a possible sale of the Company’s more stable and profitable EH Business on a going concern basis. In May 2020, the Debtors began negotiations with the First Lien Secured Parties (as defined in the Cash Collateral Orders) regarding the orderly wind down of the Debtors’ Western Hemisphere operations and disposition of the EH Business. Among other things, these negotiations laid the framework for the Debtors to establish the process utilized to wind down their Western Hemisphere operations and sell their EH Business.

In connection with the marketing process, Moelis invited such Interested Parties to submit initial, nonbinding indications of interest (the “IOIs”) by no later than August 28, 2020 (Eastern Time) (the “Initial IOI Deadline”). Moelis received IOIs from multiple Interested Parties, including certain IOIs after the Initial IOI Deadline (collectively, the “IOI Parties”). To build on this momentum and to further facilitate the sale of the EH Business, on or around September 29, 2020, Moelis, on behalf of the Debtors, distributed a process letter (the “Process Letter”) to the IOI Parties, which communicated critical information about the proposed Bidding Procedures and proposed sale timeline and invited the IOI Parties to engage in a more detailed due diligence review. The Debtors anticipate that the Process Letter will encourage the IOI Parties to conduct a more thorough review of, and submit competitive bids for, the EH Business. The Debtors are hopeful that one or more IOI Parties will submit revised IOIs by no later than October 9, 2020, and that at least one of those parties will become a stalking horse bidder for the EH Equity Interests.”

About the Debtors

According to the Debtors: “Energy Alloys is the only 100% oil and gas focused supplier of specialty metals to the global oilfield industry. 

With this focus we have built one of the widest ranging and tailored oilfield inventories in the world. Our value-added services and resources create a reliable and consistent supply chain that increases product quality and decreases lead times."

Corporate Structure Chart

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