Rusal posts steep 2013 loss, still in debt restructure talks

HONG KONG, March 28 Thu Mar 27, 2014 10:44pm EDT

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HONG KONG, March 28 (Reuters) - Russian aluminium producer United Company Rusal Plc posted a $3.2 billion loss for 2013, hurt by lower prices and restructuring charges, and said it was in still in talks to renegotiate part of its debt.

The result, which included a $1.9 billion charge for impairment and one-off restructuring, was up from a $528 million loss in the previous year, the company said its results statement on Friday. Revenue fell 10.4 percent to $9.77 billion.

Aluminium prices are trading around their lowest levels in more than four years amid a global oversupply that has pushed stocks of the metal in London Metal Exchange (LME) warehouses to record levels.

Rusal's shares fell as much as 4 percent after the result before rebounding.

Rusal, which won a court ruling on Thursday derailing LME plans to cut logjams in warehouses, said the average LME aluminium price fell 8.6 percent in 2013 to $1,845 per tonne.

The company's aluminium output fell nearly 8 percent in 2013 to 3.857 million tonnes due to the curtailment of inefficient capacity.

Rusal, which has been in talks on restructuring its debt of about $10 billion, said it has completed restructuring negotiations with state lender Sberbank on $4.9 billion of debt and Gazprombank on $660 million.

It was in advanced talks on $3.7 billion of PXF facilities but expected to breach certain covenants, resulting in a default, as the talks were expected to continue past the expiry of a covenant holiday on March 31.

Rusal said management believed the facilities would be renegotiated "in due course" and it should have sufficient liquidity to meet its obligations as they fall due.

It had also secured additional financing from a major customer and identified non-core assets it could sell if aluminium prices fell further.

Rusal said it expected global demand for aluminium will trend upward, with demand expected to grow 6 percent to 55 million tonnes in 2014.

China, the world's top aluminium consumer and producer, was expected to cut production by about 3 million tonnes in 2014 and the Chinese market is expected to be balanced this year, it said.

Analysts polled by Reuters in January predicted a surplus in the global aluminium market, including China, tightening to 568,400 tonnes this year and 500,000 tonnes in 2015.

Major global aluminium producer Alcoa Inc reported a loss for the fourth quarter of 2013 after weaker aluminium prices led to a $1.7 billion non-cash impairment charge on smelter acquisitions.

China's top producer, Aluminum Corp of China Ltd (Chalco) , swung to a yearly profit in 2013, but warned it faces challenges in the short term as a glut of some products grips the sector. (Reporting by Polly Yam and Polina Devitt in MOSCOW; Additional reporting by the Hong Kong bureau; Editing by Richard Pullin)

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