Molycorp stock collapses after missing $32.5M interest payment
Shares in Molycorp (NYSE:MCP), the U.S.’s only miner and processor of rare earths, plummeted Monday as the company unveiled it had missed a US$32.5 million interest payment on its senior secured notes.
Molycorp, a speculators’ favourite and highly volatile share which regularly featured among the NYSE top traded stocks, was changing hands at 0.46, or 13% lower than Friday in mid-morning trading. This as today’s announcement means the company has barely 30 days (the grace period) to avoid filing for bankruptcy before the end of the month, as reported Sunday the Wall Street Journal, citing unnamed insiders.
“The company has retained financial and legal advisors to assist the company to restructure its debt. The company will use the grace period to continue to evaluate different options related to such debt restructuring,” the miner said in a statement.
Hit by lower rare earth prices, Molycorp —the largest supplier of rare earths anywhere in the world — had warned in March it might not have enough money to remain in business. The company, which went public in 2010 and two years later paid $1.3 billion for Canada’s Neo Material Technologies, carries a $1.7 billion debt load, with $206.5 million in convertible notes that mature in June 2016.