Rusal agrees cash sweep cancelation with creditors until at least Jan
MOSCOW. Dec 6 (Interfax) - UC Rusal and its creditors have agreed on the cancelation of the cash sweep mechanism until at least January 2017, the Russian aluminum giant's Director of Strategy, Business Development and Financial Markets Oleg Mukhamedshin said on the sidelines of the Sberbank CIB Metals and Mining Fertilizer Conference.
As part of the cash sweep process all resources, excluding operational expenses and capital expenditure, must be allocated for the repayment of debts. This process must take effect if Rusal net debt/EBITDA surpasses 3x. At the end of June this was 3.3x and 2.9x in the preceding quarter.
"The cash sweep will not take effect before the end of the year, by agreement with creditors it will come into operation from January if the level of Rusal net debt/EBITDA requires this," Mukahamedshin said.
Responding to a question on the possibility of revisiting the idea of a spin-off of Rusal's stake in MMC Norilsk Nickel , in relation to the upcoming changes in the capital of Rusal itself, Mukhamedshin said: "We looked at this option last year and didn't see that it will give an immediate result. If something changes, we will return to this idea".
