07 May 2004 07:56
RUSAL COULD SELL DOWNSTREAM ASSETS TO ALCOA FOR $500 MLN
MOSCOW. May 7 (Interfax) - Russian aluminum giant Rusal might raise up to $500 million from the sale of two
downstream assets to Alcoa, Alexei Pukhayev, an analyst at UFG, told Interfax.
The Samara Metals Plant (SMZ) is currently worth around $200 million-$300 million and the Belaya-Kalitva plant
(BKMPO) $80 million- $90 million. "The deal could fetch a total of $400 million-$500 million,' Pukhayev
said.
in the Samara and Belaya Kalitva plants. They did not go into detail
about the transaction, but said closing, subject to government
Rusal and Alcoa said on Thursday they had reached agreement in principle under which Alcoa will purchase Rusal's
controlling interests
approvals, is expected to be completed by June 30. As part of Alcoa, the two fabricating facilities will serve not
only the domestic Russian market but will also focus on global customers in Europe, Asia and the Americas.
Some analysts are inclined to think Rusal is offloading the assets because they are uneconomical.
Pukhayev said he thought Rusal was trying to trim its capacity for manufacturing value-added products. "SMZ and
BKMPO have practically no customers, and Rusal has never been able to fully utilize their capacity," the analyst
said.
"As for the Samara plant's capability to produce beverage can
strip, Rusal has in its time over-estimated the Russian market's
Timur Pestov of the Aton Investment Company told Interfax that SMZ ran at less than half its capacity in 2003 and
BKMPO at just 40% because the plants could not sell their products in Russia. Rusal is still having to maintain these
assets at extra cost, though.
In addition, Rusal is geared towards smelting and, in view of this year's sharp increase in the price of primary
aluminum, the margin has decreased at downstream units if not turned negative, Pestov said.
Alcoa, for its part, has received major orders from European aerospace concern EADS and Canada's Bombardier, and
the Rusal assets are capable of meeting those orders, he said.
potential, while Alcoa has a wealth of experience at promoting products like this," Pestov said. The Aton
analyst did not, though, venture to put a price tag on the sale of the two units.
[Interfax] |
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