Rusal gets breather on $5.15 bln debt till 7th July

RUSAL’s lenders have agreed that they will not take any action against the company on any defaults for at least a period of 3 months, while RUSAL is in talks with its lenders to revise the lending terms up to $5.15 bn in debt. The debt renegotiation is very important for the largest producer of aluminum; RUSAL Plc as the prices of aluminum has remained the lowest in the four and half years. The company had reported its 2nd annual loss in March.

RUSAL said that they are trying to convince their lenders to defer loan repayment dates and reconsider $4.75 bn and $400 mn of syndicated facilities that the company wants to merge into a single agreement.

Majority of the lenders has agreed to take any steps against RUSAL until 7th July or till the time any amended agreement is being reached, if the company is not able to repay the instalments, said RUSAL in a filing to Hong Kong bourse.

"The Forbearance Request Letter may terminate early if any creditors of the Group take enforcement actions, any new defaults occur or if, after 9 June 2014, a requisite majority of the Lenders decide that there is no reasonable prospect of the Amendment Agreement becoming effective," Rusal said.

The company, burdened with $10.1 bn in debt, said it will continue to pay every accrued interest on loans outstanding.

Rusal could not negotiate an appropriate deal for the syndicated facilities before 31 March, when financial agreements were yet to be tested and would have resulted in a gap in the existing financial agreements, said the company.