United Co. Rusal (486) said all creditors have now agreed to its proposed changes to terms on two loans, for $4.75 billion and $400 million, averting the need for the world’s largest aluminum producer to pursue court action.
Rusal expects to sign a new loan agreement “in the next week or two,” Deputy Chief Executive Officer Oleg Mukhamedshin told reporters on a call today. The balance due under two loans, which will be refinanced, was $3.55 billion as of July.
Rusal, controlled by Russian billionaire Oleg Deripaska, won court approval last month for its lenders to vote on a scheme of arrangement that allows debt restructuring when at least 75 percent of creditors by value agree to it. The consensual sign-off by all creditors means Rusal may no longer need to pursue its court action, the company said today.
Royal Bank of Scotland Group Plc had been the last creditor holding out against new terms for Rusal’s debt, Robin Knowles, a lawyer for the aluminum producer, said July 10.
Rusal had net debt of $10.1 billion at the end of 2013 and posted an annual net loss of $3.2 billion as it wrote down the value of assets after aluminum prices fell, the company said in March. An agreement with creditors will allow Rusal to cut the amount it needs to pay back this year to $400 million from $1 billion, the company said.
The aluminum company plans to merge the two loans totaling $5.15 billion, taken in 2011 and 2013, and restructure them simultaneously. The company is seeking to extend the maturity of the debt to 2018, with a two-year grace period on repayment of the principal amount under the new terms.
Rusal depositary receipts rose as much as 4.1 percent, before paring their gains to 0.4 percent by 1:22 p.m. in Moscow.
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