Rusal targets 1Q2022 to spin-off its higher carbon assets

Russian aluminium producer Rusal 0486.HK has targeted the first quarter of 2022 as its timeline to complete the demerger of higher-carbon assets into a separate company. This news came after the company’s head of strategy Oleg Mukhamedshin officially told Reuters.

"At this stage, management is preparing a proposal for the way forward," Mukhamedshin said, while adding "To what extent these proposals will be supported by all shareholders is too early to discuss. But we hope that they will be supported."

En+ Group, which own 56.9 per cent of Rusal, supports the demerger of assets with a pro-rate distribution of shares among all shareholders. Rusal’s second-largest shareholder Sual partners said that it would like to see more options on the table.

However, Mukhamedshin is of an opinion that shareholders should be asked to vote on the plan this year.

The assets, which will form a new company, yet to be named, consist of five older aluminium smelters, four alumina refineries and two bauxite mines in Russia. The new AL+ is expected to keep 60% of its current aluminium and 70% of alumina production assets.

Rusal will keep its Hong Kong listing when it becomes AL+ and the separated company will also be publicly listed, according to the current plan, said Mukhamedshin.

The debts will be shared on the basis of net debt to EBITDA ratios and long-term financial models, which are expected to provide both with enough cashflow to service their individual portion of debt.