UC Rusal continues consultations on Panda Bonds, these possible in 2017
MOSCOW. Dec 6 (Interfax) - UC Rusal is continuing consultations with Chinese regulators on an offering of RMB-denominated bonds (Panda Bonds), Rusal's Director of Strategy, Business Development and Financial Markets Oleg Mukhamedshin said on the sidelines of the Sberbank CIB Metals and Mining Fertilizer Conference.
"We are not ready for Panda Bonds at the moment. We are holding consultations with Chinese regulators. Then things will again depend on what terms the markets offer. We are not rushing into anything. If we are able to this year, good, if not, we will discuss it next year," Mukhamedshin said.
Other than Panda Bonds, the aluminum company was also exploring the possibility of offering Eurobonds in October-November. Mukhamedshin said rates were not to the company's liking. "If the rates on the Eurobond market in autumn had corresponded with our expectations, we would have certainly offered them. Technically we were ready for this. But the rates, even before the closing of the window after the U.S. elections, seemed rather high to us. We are continuing to look at all options," Mukhamedshin said.
Rusal is also continuing negotiations with creditor banks about a reduction in the cost of borrowing, he said. The negotiations are being conducted across the entire credit portfolio.
"The financial condition of the company and market situation have changed for the better. We have all the arguments to convince our creditors to lower the cost of debt," he said.
"We are holding negotiations with Sberbank on how to improve conditions on a loan with shares in MMC Norilsk Nickel (Nornickel) as collateral. We hope that a mutual understanding will be reached with all parties," Mukhamedshin said.
In January 2017 Rusal will prepay a pre-export finance (PXF) facility of around $200 million, Mukhamedshin said.
He also said that Rusal is holding negotiations on the sale of a number of production assets, but did not specify which enterprises he was speaking about.
Rusal is not currently planning to discuss the possibility of new interim dividend pay-outs with creditors, Mukhamedshin said.
Besides this, the aluminum company is holding talks with banks about the improvement of financing conditions for the construction of the second launch complex of the Boguchany Aluminum Plant. "If everything is normal, we will resume construction of the second launch complex," the Rusal executive said.
Mukhamedshin said that the situation with the construction of the Taishet Aluminum Plnat will become clear in Q1 2017.
"Our idea was to transfer this project to the Boguchanskoye Energy and Metals Complex and agree upon the participation of RusHydro . For now, our colleagues are studying the materials and have not made final decisions. Some clarity should arise in Q1 2017. The banks are interested in the participation, in particular, of Vnesheconombank (VEB)," Mukhamedshin said.
Rusal's capex in 2017 is planned at $600 million, he said.