Noranda Aluminum Holding Corp. has filed for Chapter 11 bankruptcy and will undergo a court-supervised restructuring process. In conjunction with the filing, Noranda has entered into an agreement in principle with its asset-based lending partners for up to USD130m in debtor-in-possession (DIP) financing. It has also received a commitment for up to USD 35m in incremental DIP financing provided by certain existing term loan lenders. Upon approval by the Court, the new financing, combined with cash generated from the company's ongoing operations, will be used to support the business during the court-supervised process. Kip Smith, Noranda's president and CEO, declared the step was necessary because of "challenging market conditions and the re- cent disruptions in our primary business operations." Only recently, in January, Noranda announced steps to reduce costs, including a 25% lay-off of upstream workforce.
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