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W.R. Grace sale of vermiculite unit gets cleared

by Aviva Gat | Published November 29, 2011 at 4:54 PM

Bankrupt building materials maker W.R. Grace & Co. will sell one of its units for $10 million as it continues to await a U.S. District Court ruling on its reorganization plan.

Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania in Pittsburgh was set to consider the private sale on Monday, Nov. 28, but approved the sale without a hearing on Nov. 21 after no objections were filed. The W.R. Grace case is actually in the U.S. Bankruptcy Court for the District of Delaware in Wilmington, but Fitzgerald is still a holdover from the days when the Wilmington court needed visiting judges from other jurisdictions to help it deal with its clogged docket.

Vermiculite Acquisition Corp. has agreed to purchase Grace Specialty Vermiculite, which mines the mineral vermiculite in and around Europe, from W.R. Grace unit W.R. Grace & Co.-Conn., according to the Oct. 17 sale motion. Located in Enoree, S.C., GSV also operates a milling and processing facility there and five other facilities in the U.S. and Canada. Documents show W.R. Grace projects the business will achieve sales of about $22 million in fiscal 2011.

Court papers did not identify the owner of Vermiculite Acquisition, but its listed address matches that of Dicalite/Dicaperl Minerals Inc. of Bala Cynwyd, Pa. Dicalite/Dicaperl owner Raymond G. Perelman is listed in court papers as CEO of Vermiculite Acquisition.

Vermiculite is used in several products, including spray-on fire protection products, lightweight insulating concrete, soil mixes and animal feeds. Dicalite/Dicaperl, meanwhile, mines and processes perlite, another mineral.

W.R. Grace has been looking to sell its vermiculite business since February 2009 because the business is not a "strategic fit" with the debtor's other business lines, documents show. The business' revenue contributed to less than 0.7% of W.R. Grace's 2010 consolidated revenue, but managing the business was demanding and used a disproportionate share of senior management's time, the company said.

The business' aging facilities also require significant investment over the coming years to maintain efficiencies.

W.R. Grace, meanwhile, awaits confirmation of its reorganization plan from Judge Ronald L. Buckwalter of the U.S. District Court for the District of Delaware in Wilmington. Buckwalter heard oral arguments on the plan, as well as two outstanding appeals of the bankruptcy court recommendation for confirmation on June 28.

Fitzgerald confirmed W.R. Grace's reorganization plan on Jan. 31, but district courts have jurisdiction over asbestos-related bankruptcies under Section 524(g) of the Bankruptcy Code.

Founded in 1854, W.R. Grace is a building materials and industrial catalysts manufacturing company with operations in more than 40 countries.

The Columbia, Md., company filed for Chapter 11 on April 2, 2001, in the face of mounting asbestos-related lawsuits. At the time, it pegged its assets and liabilities at roughly $2.6 billion and $2.7 billion, respectively.

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W.R. Grace sale of vermiculite unit gets cleared

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