AN INITIAL deal to restructure Aughinish Alumina’s parent company Rusal’s $7.3 billion (€5.2 billion) in foreign debt requires the aluminium giant to sell its stake in Norilsk Nickel if it fetches a high enough price, sources at creditor banks said yesterday.
Rusal’s spokeswoman was not immediately available for comment. The terms – which come up for a vote at a creditors’ club meeting today – contain a formula for determining the value of the 25 per cent stake in Norilsk Nickel, the world’s largest nickel and palladium producer, sources said.
When the value is high enough to cover Rusal’s debts to state banks, namely a $4.5 billion loan from Russian state bank VEB secured by Rusal’s shares in Norilsk Nickel, the stake must be sold, the sources said.
“It is obligatory, with certain conditions,” one source said.
At Monday’s closing price on Moscow’s Micex exchange, Norilsk was worth $19.4 billion, valuing the stake at about $4.8 billion. The shares rose about 2.8 per cent yesterday morning but stood 1.99 per cent higher at 3,182 roubles after the news. The deal requires Rusal to pay a minimum of $7.5 billion over four years to Russian and foreign creditors who have lent a combined total of $16.8 billion to Rusal, the sources said.
The payments are linked to the price of aluminium and the rate of repayment can rise in line with the price on the London Metals Exchange. The proposed terms of the restructuring extend the debt over a maximum period of seven years. Aughinish, on the Shannon estuary, is the largest alumina refinery in Europe. It did not return calls to The Irish Timesyesterday.
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