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10 MARCH 2014 AL CIRCLE

Russia's Rusal enters a $5 billion debt refinance deal with Sberbank

2MINS READ
Rusal, the Russian aluminium giant, has entered into a deal with Sberbank to refinance their debt of $5 billion with the largest lender of the country, Oleg Mukhamedshin, Rusal Deputy Chief Executive said on Thursday.

Rusal, hit by aluminium’s weak prices as well as heavy levels of debt of around $10 billion, had talks with the state bank on debt restructuring deal, sources said in the month of January.

"We have finished our discussions and we have credit approval," Mukhamedshin told Reuters. "So currently we are finalising the ... process."

He did not provide further details. Sberbank declined to comment.

In January Sberbank and Rusal were discussing the particular model, under which "if aluminium prices remain low, the debt is to be repaid over 20-30 years; if they go up, then the cash flows will allow Rusal to redeem everything within five years," one of the sources said that time.

In 2010, Sberbank took on a loan given during the financial crisis by the state to Rusal. Now it is worth around $4.6 billion and also matures in the month of September 2016. This loan is secured against stake of Rusal in Russia's Norilsk Nickel, the leading miner of nickel & palladium in the world.

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