Molycorp Inc. (MCP), a mining company whose market valuation has fallen to $93 million from more than $6 billion in 2011, hired law firm Jones Day for advice on debt restructuring, a person familiar with the situation said.
The person asked not to be named because the matter hasn’t been publicly disclosed. Jim Sims, a spokesman for the Greenwood Village, Colorado-based rare-earths producer, declined to comment on the hiring of an adviser.
Jones Day helped Molycorp secure $400 million of loans from Oaktree Capital Management LP last year, the person said. Debtwire reported Wednesday that the law firm was advising Molycorp on restructuring.
Molycorp shares fell as much as 38 percent Thursday in New York. They have lost 99 percent of their value since peaking in 2011 after China restricted exports of rare earths, a group of minerals used in applications including batteries and wind turbines. The curbs causing rare-earth prices to surge. Prices subsequently fell after manufacturers found ways to replace or minimize their use of the commodities.
Molycorp dropped 17 percent to close at 38 cents in New York.
The company had total debt of $1.6 billion at the end of the third quarter, according to data compiled by Bloomberg.
