|
KEYWORDS: Timminco , Dow Corning , Globe Specialty Metals , Ferroatlantica , Quebec Silicon , silicon , smelter , Quebec , bankrupcy
Timminco Ltd.’s bankruptcy filing has sparked speculation that a handful of other silicon producers—plus a major consumer—could be mulling a play for the company’s majority stake in Quebec Silicon Ltd.
Quebec Silicon, formed in August 2010 between Timminco and Dow Corning (AMM, Aug. 12, 2010), operates a silicon plant in Bécancour, Quebec, with a nameplate capacity of some 47,000 tonnes per year. The operation will continue to operate as normal during the restructuring, Timminco said at the time of the bankruptcy filing.
While the company has not said whether a sale is in the cards, speculation is mounting nonetheless that a number of players could be interested in acquiring the stake.
Dow Corning, a major customer as well as 49-percent owner of Quebec Silicon, is an obvious contender for Timminco’s majority share if a sale were to take place, market sources said.
"Dow Corning can’t afford to just let it go. They have too much at stake to lose," a market source said.
A second market source agreed. "Dow Corning is in there with a very, very important share of the production. I don’t think they would jeopardize that," he said. "There is a strong likelihood that Dow Corning will buy the balance."
Dow Corning did not respond to requests for comment.
Competing silicon producers also may throw their hats in the ring, market sources speculated.
For example, domestic silicon producer Globe Specialty Metals Inc. could be a natural fit, particularly with acquisition-hungry executive chairman Alan Kestenbaum at the helm, sources said. Under Kestenbaum’s leadership, Globe recently completed its purchase of specialty coal miner Alden Resources LLC for $73.2 million (AMM, Aug. 2), and earlier last year spent $17 million to acquire mining licenses for manganese ore in Nigeria (AMM, May 11).
"Who’s to say Globe doesn’t swoop in and snap it up? Kestenbaum buys things when they’re cheap," the first market source said.
Globe did not return calls for comment.
Ferroatlantica SL also was cited by market players as a potential bidder, although the Spanish company did not return requests for comment.
Sale or no sale, most market participants agree that Timminco’s bankruptcy filing will not significantly affect silicon prices, provided the smelter continues to operate.
Silicon prices are holding at around $1.45 per pound, sources said, down from summer highs of $1.72 per pound but up from lows near $1 a pound at the height of the economic crisis.
|