Alumina ups to A$350 mln, prices convertible notes

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SYDNEY, May 15 (Reuters) - Australia's Alumina Ltd (AWC.AX: Quote, Profile, Research, Stock Buzz)
said it has increased to $350 million and priced its five-year
convertible issue.

The proceeds will help repay debt, fund the expansion of an
alumina refinery and dig a new bauxite mine.

The notes, initially launched with a size of around $300
million, will pay a coupon of 2.0 percent per year. They will
convert into shares at a conversion price of A$8.35 per share,
representing a premium of around 30 percent above the reference
price. Alumina's shares stood at A$6.42 on May 12, before the
offer announcement.

Holders have the rights to convert the bonds at any time
from June 25, 2008 until they mature on May 16, 2013.

The offer, led by Goldman Sachs International, is the
second convertible issue by an Australian company this year.

Convertible bonds are especially suited to the investment
intensive resource sector where companies need to raise funds
to complete major projects.

Convertible bonds stand between debt and equity, allowing
companies to avoid issuing more stock at a time when their
share price is expected to increase. The bonds give investors
regular interest payments and allow them to benefit from a
share price appreciation when the securities convert into
equity.

The Alumina notes are senior, unsecured, guaranteed
convertible notes, issued by Alumina Finance Ltd, a wholly
owned finance subsidiary of Alumina.

The European-style convertible offer was documented under
regulation S, which excludes the participation of U.S.-based
investors. It is expected to be listed on the Singapore Stock
Exchange after it closes on May 16.

Alumina said the issue completes the company's 2008 funding
programme to extend its debt maturity profile.

Alumina is a 40 percent partner in the Alcoa World Alumina
and Chemicals (AWAC) joint venture that is 60 percent owned by
Alcoa (AA.N: Quote, Profile, Research, Stock Buzz).
($1=A$1.07)
(Reporting by Cecile Lefort)