AMIDST suggestions that Noranda Aluminum Holding Corporation (NAHC) might become the object of a buyout soon, some analysts say a buyer would benefit from the significant slide in share value since the start of the year to below US$1 per stock.

Noranda indicated on its investor portal at norandaaluminum.com yesterday that common stock is now valued at US$0.32 cents per unit. The stock’s 52-week high was US$27.51 and 52-week low was US$0.28 cents.

Share value began heightened deceleration in May 2015 when the company’s largest shareholder, Apollo, began to seek a buyer for its 33.3 per cent holding in the company. Before that, the fortunes of the general metals industry fed a decline.

On November 25, Noranda Holdings disclosed that the New York Stock Exchange (NYSE) had commenced proceedings to delist the company’s common stock because, as prescribed by Section 802.01B of the NYSE’s Listed Company Manual, the company had fallen below the NYSE’s continued listing standard requiring listed companies to maintain an average global market capitalisation over a consecutive 30 trading-day period of at least US$15.0 million. The stock remains available over the counter.

What a buyer might get, analysts note, is one of the few vertically integrated operations of its size in the industry. The company reported 253 million metric tons produced in 2014 which accounts for 14.6 per cent of US production.

NAHC’s bauxite is mined in Jamaica through subsidiary Noranda Bauxite Limited, shipped up the Mississippi, taken to its smelting plant, and then on to its rolling plants. The rolling mills are located in: Huntingdon, Tennessee; Salisbury, North Carolina and Newport, Arkansas. The company owns 49 per cent of the mining operation in St. Ann, Jamaica.

The Jamaican government owns the other 51 per cent plus surface rights. Concessions received from this partner since 2004 are estimated at more than US$300 million.

Noranda said this week that it would cut 100 jobs due to financial pressures including a government of Jamaica bauxite levy which has returned to its pre-financial crisis thresholds. The job cut projection also comes after progressive losses and deepening debt continue to affect the company.

For the nine months, reported net loss was US$203.2 million (US$20.46 per share) in the first nine months of 2015 versus a US$28.3 million net loss ($2.89 per share) in the first nine months of 2014.

Sales were US$987.8 million in the first nine months of 2015 compared to US$1,018.9 million in the first nine months of 2014.

“The year-to-date sales decrease of US$31.1 million is primarily due to lower external shipments at primary and lower average midwest transaction price, partially offset by higher external shipments at Alumina,” the company stated in its nine month financials.

In the article headlined ‘Would Alcoa or Century Be Interested in Acquiring Noranda ?‘ online magazine247wallstreet.com author, Paul Ausick, noted a buyer would have to be optimistic.

“When demand from exchange traded funds and hedge funds was high in early 2011, aluminium fetched about US$1.25 a pound, compared with a closing price of US$0.75 a pound at the close of trading on June 16 this year,” Ausick noted.

“Demand for aluminium from the auto industry as it builds and sells new vehicles at a very strong pace has failed to raise demand (and prices) for aluminium or, for that matter, steel. Demand from the airplane builders is slower to develop because it takes so long to increase production on more planes, and the huge backlogs at Boeing and Airbus are having little impact on the market for aluminium,” the analyst said.

The miners, said 247wallstreet, are all struggling with falling prices for the commodity, and the blame, at least this month, is being assigned to continuing high export levels from China. Other factors affecting the price are weak demand and abundant supply from Noranda and Alcoa and others. Even Rusal is said to be affected.

NAHC meanwhile is carrying debt of over US$600 million. In the 10K filing made to the US Securities and Exchange Commission (SEC), the company disclosed under risks that it has “substantial indebtedness, which could adversely affect our ability to raise additional capital to fund our operations”. As of December 31, 2014, total indebtedness was US$668.0 million.

Earnings are said to be further hampered by a contract with Glencore on which losses have been running for a period. Queries to NAHC over the continued impact of the Glencore losses were not answered up to press time. The company also did not respond to queries relating to a possible sale.

Glencore itself has also been the subject of a share price rout and has announced a project to reduce the company’s borrowings to US$20 billion from US$30 billion. It may not be minded at this time to pay out more to Noranda in a renegotiated deal.