(Repeat story published on Monday)
* Arrium collapsed after private equity bailout rejected
* Global investment bank to be hired to advise on sale
* Moly-Cop was valued at around $1 bln in late 2015
SYDNEY, May 23 (Reuters) - Troubled Australian steel group Arrium Ltd ARI.AX , which collapsed last month after creditors rejected a private equity bailout, will hire a global investment bank to advise on the sale of its profitable Moly-Cop mining supplies unit, the firm's administrator said on Monday.
Moly-Cop, which makes steel balls to grind ore, among other items, operates mostly in the United States and Latin America, and had been excluded until now from Arrium's restructuring after a private equity sale collapsed last year.
"A global investment bank will be appointed shortly to advise on the sale of Moly-Cop," KordaMentha said in a statement.
The bank was not identified, though the administrator recently agreed to work with Morgan Stanley (NYSE:MS) toward a "constructive outcome" after the Wall Street bank sought repayment of a $75.4-million credit facility. decision to sell Moly-Cop is part of planned recapitalisation and sale by the end of the year of Arrium's assets, which also include steel works and distribution businesses in Australia, KordaMentha said.
Moly-Cop was valued at around $1 billion in late 2015, when it was sought after by private equity groups, suggesting a sale could help alleviate Arrium's financial problems stemming from a soft steel market and an ill-timed move into iron ore mining.
Arrium went into voluntary administration, a precursor to bankruptcy, in April after creditors rejected a $927-million bailout proposal by private equity group GSO Capital Partners that would have paid no more than 55 cents on the dollar on their claims.
A spokesman for KordaMentha, Michael Smith, said the sale of Arrium assets had already prompted a number of parties to register interest.
Arrium owes around A$4 billion ($2.89 billion), including A$2.8 billion due to Australian and overseas banks. The balance includes dues to nearly 8,000 employees, U.S. bond holders and trade creditors.
Two New York private equity funds are eyeing all of Arrium's businesses, provided a co-investment package from government for its loss-making Whyalla steelworks makes it enticing enough to be part of a future buyout, the Australian Financial Review reported on the weekend.
Cerberus Capital Management, which has $30 billion of assets around the world, and the smaller Argand Partners, were initially interested only in a joint buyout of Moly-Cop, it said. ($1=1.3852 Australian dollars)