UC RUSAL, the owner of Aughinish Alumina, said yesterday it had reached a standstill agreement with more than 70 international banks to delay payments on $7.4 billion in loans for at least two months.
The Russian aluminium group, controlled by Oleg Deripaska said the agreement, which could be extended for a third month, would provide additional liquidity as it seeks a broader, long-term restructuring agreement with foreign lenders and Russian banks on its $14 billion in gross debt. Rusal owes an additional $2.8 billion to metals tycoon Mikhail Prokhorov.
Aughinish on the Shannon estuary is the largest alumina refinery in Europe. It employs 481 people.
“We are pleased that our lenders have endorsed our proactive steps to address the exceptional trading conditions and the current global economic crisis,” Mr Deripaska said. “The agreement . . . demonstrates the constructive nature of the ongoing negotiations between Rusal and its lenders.”
The company made the announcement after gaining the support of 75 per cent of lenders at noon yesterday. But people close to the situation cautioned the agreement still had to be signed by the international banks.
“I don’t think there will be any problems, but I think we were all taken a bit by surprise that the client unilaterally announced the deal,” said one person close to the lending banks.
The agreement would give some breathing space to Mr Deripaska, once Russia’s richest man, as he battles to keep his empire afloat. The global market collapse has revealed the vast borrowings that have gone into building his aluminium, cars and construction empire.
One person close to the lenders said the standstill applied to the principal payments for the $7.4 billion in debt and was only the first step in starting complicated negotiations with foreign banks on debt restructuring. Members of the co-ordinating committee representing the international lenders have met Arkady Dvorkovich, the presidential economic adviser, and Igor Shuvalov, the first deputy prime minister, in recent weeks as they seek to gauge the level of state support for a broader restructuring of Rusal’s debt. Rusal owes state-controlled banks almost $7 billion, of which at least $4.5 billion falls due this year. Mr Deripaska has said he does not need state financial support. But lenders have not received clear signals on the level of state support since the government suspended a $50 billion bailout programme for Russian companies with foreign debts, saying it would focus on support for the banking system instead.
Rusal had been among the first recipients of bailout loans,winning $4.5 billion from state-owned VEB to prevent its 25 per cent stake in Norilsk Nickel being seized by foreign creditors last year. – ( Financial Timesservice)
