Aleon Metals, a critical mineral recycling and production company, has secured $188m in debtor-in-possession (DIP) financing.

The company has also voluntarily filed for Chapter 11 relief in the Southern District of Texas' US Bankruptcy Court.

The financing will enable Aleon to maintain operations, invest in its facilities in Freeport, Texas, and continue supplying critical minerals vital for US industries and national security.

The restructuring process includes an agreement for a “free-and-clear” sale under Section 363 of the Bankruptcy Code, with the consortium of DIP lenders acting as the 'stalking horse bidder'.

Investment banker Jefferies will market the business to ensure a competitive auction, inviting higher or better offers to achieve the best outcome for Aleon's employees, customers, stakeholders and community.

Chief restructuring officer Roy Gallagher said: “This is a pivotal step in Aleon's journey. With fresh capital, strong stakeholder support and a competitive process under way, Aleon is positioned to enhance its Freeport operations and continue providing critical minerals that are essential to America's future."

Aleon's $188m financing ensures the company's continuity, with uninterrupted operations and full wages and benefits for employees.

The investment will also enhance the Freeport facilities, expanding production and strengthening US supply chains.

The company has submitted 'first day' motions for court approval to continue its operations smoothly, including paying employee wages and benefits.

Aleon anticipates quick court approval and plans to operate normally during the restructuring.

Legal counsel Morrison & Foerster, investment banker Jefferies, restructuring advisor Ankura Consulting Group and Texas restructuring counsel Norton Rose Fulbright are supporting the company through this transition.

Aleon Metals CEO Tarun Bhatt said: “We have worked diligently to streamline our operations and position Aleon for continued growth.

“Now more than ever, offering a sustainable, domestic alternative to foreign-sourced critical minerals is essential. This process enables us to invest further in GMR [Gladieux Metals Recycling] and ARM [Aleon Renewable Metals], accelerate innovation and secure Aleon's role as a long-term leader in US critical mineral supply, while continuing to support local jobs, play a positive role in the community and advance environmental sustainability for future generations."