Arrium to Maybe Keep Moly Cop...?

Looks like you might get your wish of holding onto Moly Cop after all fitnfam... Interesting article in today's AFR re Moly Cop sale (see below).

Jury out on whether its the PE guys talking it down pre-bid, or whether Arrium's price expectations too high for them. Perhaps Arrium thinking shareholders interests better served medium term holding onto Moly & riding its USD earnings & growth profile - using USD debt markets to replace local bank facilities. Given strong USD earnings from Moly should give lenders comfort to lend (albeit at higher rates to compensate for risk).

Either way I imagine having this option open will remove any chance of PE/trade buyer prizing Moly out on the cheap. Interesting days ahead...
  
http://www.copyright link/street-ta...-markets-amid-molycop-jitters-20150914-gjlxb5

Arrium eyes US debt markets amid Moly-Cop jittersDebt-laden Arrium is mulling a high-yield debt issuance as an alternative to selling part or all of its Moly-Cop mining consumables business.
Sources told Street Talk that Arrium and its advisors are working on the high-yield debt scenario as a potential backstop in case a sale of Moly-Cop does not achieve the desired value.

The sale process for Moly-Cop, which is the jewel in Arrium's struggling suite of businesses, has attracted interest from private equity firms including KKR & Co, Blackstone (said to be advised by Goldman Sachs) and TPG.
Arrium advisors Lazard and UBS are seeking indicative bids by September 18, but Street Talk understands that if first round bids are underwhelming - and sources suggested bidders are struggling to make the numbers stack up - then the auction is likely to serve as a price discovery exercise on a US debt refinancing.

The Moly-Cop sale process will put a marker on value for Arrium's key cash generating asset for a potential debt restructure.Any restructure of Arrium's $1.75 billion of debt is expected to include a small parcel of senior secured debt and a subordinated high-yield debt offering from the US market.

Arrium has said it is considering the structure and level of its debt as well as asset sales.

Arrium's current debt profile is primarily comprised of syndicated loan facilities from the big four Australian banks.

Nine Entertainment, Chemstralia, Fortescue Metals, Midwest Vanadium and gold miner St. Barbara have also turned to US debt markets.