Rusal could start paying div if aluminum trades at $2500/tonne
ST.PETERSBURG. June 22 (Interfax) - UC Rusal could start paying dividends again if market trends improve considerably.
The aluminum giant has not paid dividends since 2008 due to the need to restructure and service debt.
"We'll see a considerable improvement after aluminum prices have reached $2,500 a tonne," the company's CEO and main beneficiary, Oleg Deripaska, told Interfax on the sidelines of the economic forum in St Petersburg, when asked what price aluminum needed to rise to in order for dividends to become possible.
The metal is currently trading at $1,840/tonne. Rusal has forecast it will trade at $2,200-2,400 in 2012. Prices have been falling since the end of February 2012, but analysts reckon they will start to recover in H2 and end the year at around $2,200 a tonne.
Deripaska said demand in Europe was stagnating and that a weaker euro might help things. He said the world's biggest aluminum consumer, China, was buying and subsidizing energy resources to produce the metal as it wanted to be self-sufficient, but the situation ought to change. "We've discussed this with the heads of state companies and they are opting for efficiency," he said.
Rusal finished refinancing its debt last fall, reducing it to $11.472 billion and saying at the same time that dividends could be paid for Q3 2011. But a decision was not reached. Covenants say the company can pay dividends after its debt/EBITDA has fallen to 3. Net debt was $11.049 billion at the end of last year and debt/EBITDA - 4.4.
In January, Rusal struck an agreement with lenders on the possibility of introducing a 12-month period during which the covenants for $4.75 billion of debt will not be tested.
Rusal said in the middle of June that its smelters plan to raise up to 60 billion rubles with issues of corporate and exchange traded bonds and that the proceeds would be used to finance general corporate purposes, including refinancing and financing of capital expenditures.
The principal beneficiary of Rusal, whose shares and Russian depositary receipts are traded in Hong Kong and Moscow respectively, is Oleg Deripaska with 47.4%. Mikhail Prokhorov's Onexim owns about 17%, Sual Partners holds 15.8%, Glencore has 8.75% and the free float is 10.75%.
