RUSAL gets extension of waiver from its banks

Russia's RUSAL, the world's largest aluminium producer, has extended a waiver from its banks to end-2013 to meet required financial conditions on a $4.75 billion syndicated loan as it battles lower prices and high debt.

The aluminium giant had reached agreement in March to get a 12-month holiday on its conditions, or covenants, under the loan and has now reached an agreement to push that holiday to the end of next year, it said on Tuesday.

RUSAL, controlled by businessman Oleg Deripaska, is encumbered by net debt of $10.85 billion, which partly stems from the purchase of a stake in Norilsk Nickel in April 2008 for an estimated $14 billion.

Aluminium prices have fallen 6 percent since the start of the year on concerns about weakening global demand for the metal.

With the price level currently around $2,000 per tonne, roughly 20 to 25 percent of global aluminium production is loss-making, RUSAL said in September.

The company did not disclose the terms of the covenants that it may have difficulty in meeting. Typical covenants may require a company to keep its net debt and its interest payments at certain ratios to its operating earnings.

Rusal said it also intended to make an early repayment of no less than $406 million on debt due in 2013.

"This early repayment will be made by the end of 2012 and will include approximately $300 million of the company's own cash, with the remaining amount to be forthcoming from available credit lines," RUSAL said.

After the repayment, the amount due for payment under the existing credit facilities in 2013 will fall to $900 million, mainly payable in the second half of 2013, from $1.3 billion.

RUSAL said it planned to ensure it will have a sufficient amount of available credit lines, which if necessary could be used to refinance the remainder of the payments in 2013. It already has significant support from its international and Russian lenders, it said.