Bloomberg News

Rusal Seeks a ‘More Flexible’ Approach From Its Lenders

December 16, 2011

(Updates with aluminum prices in fourth paragraph.)

Dec. 15 (Bloomberg) -- United Co. Rusal, the world’s largest aluminum producer, asked lenders for a “more flexible approach” to covenants given the prospect of “continuing weakness” in commodity markets in the next year.

It also requested a period in which its covenants aren’t tested, according to a statement today.

Rusal completed an $11.4 billion debt refinancing in October that involved borrowing $4.75 billion from 13 lenders including BNP Paribas SA and ING Groep NV.

Rusal undertook a $17 billion debt restructuring in 2009 as the global crash in commodity prices coincided with increased borrowing to finance Rusal’s expansion. Aluminum prices slumped 29 percent from this year’s peak of $2,797 a ton on May 3.

Rusal’s short-term obligations for 2012 are limited to $600 million, it said today in a statement. They are covered by the committed credit facility signed by OAO Sberbank. Russia’s biggest lender agreed an 18.3 billion ruble ($575 million) credit line with Rusal last month.

Rusal should have net debt to earnings before interest, tax, depreciation and amortization of 3.5 for this year under the current covenants on a $4.75 billion loan from international lenders, a person familiar with the deal said. The ratio should be 4 or less in 2012, the person said, declining to be identified because of the confidentiality of the agreements.

Rusal’s press-service declined further comment.

--Editors: Stephen Cunningham, Torrey Clark.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net


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