Alcoa Corporation and Ma’aden Amend Joint Venture
June 26 2019 - 8:20AM
Business Wire
Alcoa to divest minority interest in rolling
mill to Ma’aden; Company to retain interest in joint venture’s
bauxite, alumina and aluminum businesses
Alcoa Corporation, a global leader in bauxite, alumina, and
aluminum products, today announced that it has amended its joint
venture with the Saudi Arabian Mining Company (Ma’aden) in which
Alcoa holds a minority, 25.1 percent stake.
The joint venture was created in 2009 as a fully integrated
aluminum complex in the Kingdom of Saudi Arabia, comprised of three
entities: the Ma’aden Bauxite and Alumina Company (MBAC; the
bauxite mine and alumina refinery), the Ma’aden Aluminium Company
(MAC; the aluminum smelter and cast house), and the Ma’aden Rolling
Company (MRC; the can and auto sheet mill).
As a result of the amended joint venture agreements, signed June
26, 2019, and expected to close by month end:
- Alcoa will transfer its 25.1 percent interest in MRC to
Ma’aden
- Alcoa to make a contribution to MRC in the amount of $100
million paid in two installments: 1) $34 million paid on June 17,
2019 to fund its 25.1 percent share of MRC’s current cash
requirements, and 2) $66 million paid at closing
- Alcoa is released from all future MRC obligations, including
Alcoa’s sponsor support of approximately $295 million of MRC debt
and its share of any future MRC cash requirements
- Alcoa will avoid future capital contributions in any MRC debt
restructuring and recapitalization
- Alcoa and Ma’aden further defined MBAC and MAC shareholder
rights, including the dividend policy
The parties will maintain their commercial relationship, which
includes Alcoa providing sales, logistics and customer technical
services support for MRC products for the North American can sheet
market.
The Company will retain its 25.1 percent minority interest in
MBAC and MAC, and Ma’aden will continue to own a 74.9 percent
interest.
“The Ma’aden joint venture aluminum complex has been an integral
part of our portfolio, and we greatly value our relationship with
our Saudi partners,” said Alcoa President and Chief Executive
Officer Roy Harvey. “As we look ahead, divesting Alcoa’s investment
in MRC enables us to pursue future returns in our bauxite mining,
alumina refining, and aluminum smelting businesses and gives
Ma’aden more strategic flexibility to further develop the rolling
business.”
Alcoa will record an estimated charge associated with the
disposition of its interest of approximately $320 million (pre- and
after-tax), or $1.72 per share, in the second quarter of 2019. The
charge includes the write-off of Alcoa’s investment in MRC, the
cash contributions noted above, and the write-off of Alcoa’s share
of MRC’s delinquent payables due to MAC of $59 million that were
forgiven as part of this transaction. Investment losses
attributable to MRC included in net income totalled $34 million
(pre- and post-tax) in 2018.
About Alcoa
Alcoa (NYSE:AA) is a global industry leader in bauxite, alumina,
and aluminum products, and is built on a foundation of strong
values and operating excellence dating back to more than 130 years
to the world-changing discovery that made aluminum an affordable
and vital part of modern life. Since developing the aluminum
industry, and throughout our history, our talented Alcoans have
followed on with breakthrough innovations and best practices that
have led to efficiency, safety, sustainability, and stronger
communities wherever we operate. Visit us online on www.alcoa.com,
follow @Alcoa on Twitter, and on Facebook at
www.facebook.com/Alcoa.
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company developments and financial performance through its website
at www.alcoa.com.
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Investors James Dwyer 412-992-5450 James.Dwyer@alcoa.com
Media Jim Beck 412-315-2909 Jim.Beck@alcoa.com
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