UC Rusal suffers massive loss; Jamaican plants to remain shuttered

(Reuters) – Russian aluminium producer United Company Rusal Plc posted a $3.2 billion loss for 2013, hurt by lower prices and restructuring charges, and said it was in still in talks to renegotiate part of its debt.

The company has been closing smelting plants all over Russia and has indicated it decision is based on the efficiency levels of the plants involved as well as the low price of Aluminium on the world market.

The company wrote down just over US$1.2B in plant property and equipment for its world wide operations and while Jamaica was not specifically mentioned here, we have word that one local plant is being pulled down and assets are being transferred elsewhere.

Phillip Paulwell some time last year was suggesting that Alpart will be reopened in 2016 but given what is taking place now I seriously doubt this plant will ever open and I also believe the write down (losses) noted in the Dec 2013 financial report, includes the assets of the Alpart facility.

UC Rusal is struggling to repay its debts and is now working with  its creditors to restructure over US$10B in debt.

Rusal, which has been in talks on restructuring its debt of about $10 billion, said it has completed restructuring negotiations with state lender Sberbank on $4.9 billion of debt and Gazprombank on $660 million.

It was in advanced talks on $3.7 billion of PXF facilities but expected to breach certain covenants, resulting in a default, as the talks were expected to continue past the expiry of a covenant holiday on March 31.

Rusal said management believed the facilities would be renegotiated “in due course” and it should have sufficient liquidity to meet its obligations as they fall due.

It had also secured additional financing from a major customer and identified non-core assets it could sell if aluminium prices fell further.

 http://online.wsj.com/article/PR-CO-20140327-915526.html

 

See UC Rusal financial report attached.

UC_RUSAL_FS_31_Dec_13_ENG_27032014_final

 

 

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