* Rusal looks to break lender deadlock with court move
* Debt breather extended to October
* Expects to sign the refinancing deal in September
* Rusal shares rebound 60 pct this year
(Adds details, quotes, context)
By Sonali Paul and Polina Devitt
MELBOURNE/MOSCOW, June 27 Russian aluminium
giant Rusal has won another reprieve from lenders,
extending a deadline to refinance $3.6 billion in debt to the
end of October while it seeks court approval for a debt
restructuring that is being blocked by a few creditors.
Without the deadline extension, the world's largest
aluminium producer, whose earnings have been hit by a slump in
aluminium prices, would have faced default on July 7.
"We are pleased that efforts to refinance our debt portfolio
have attracted such significant lender support. We are
disappointed, however, that these have not been supported by a
very small minority of lenders," Rusal Deputy Chief Executive
Oleg Mukhamedshin said in a statement on Friday.
Rusal said 94 percent of lenders had backed the
restructuring, but in the absence of unanimous support it would
apply to the courts in England and Jersey to approve a scheme of
arrangement to implement the debt deal.
According to Rusal, schemes of arrangement through UK courts
have become an important restructuring tool. "It prevents a few
hold-outs from frustrating the will of a large majority of a
company's creditors," the company said.
Two foreign creditors are yet to agree with the deal,
Mukhamedshin told reporters on a conference call. He did not
He expects the legal procedures to take a couple of months
and hopes to be ready to sign the refinancing deal in September.
The deal will revise the terms of its $3.6 billion syndicated
debt, including extension of the repayment period to 2018 from
2016, he said.
"With signing of these amendments our schedule of loans
repayment will fully meet our most conservative financial
model," Mukhamedshin added. Rusal's net debt stood at $10.3
billion at the end of March.
Rusal has been booking losses due to the drop in aluminium
prices, which have only recently bounced off 4-1/2 year lows as
global producers have cut output in face of a glut stoked by
Its shares have soared nearly 60 percent this year on the
prospects of an improvement in the market and a resolution to
its debt woes.
"Rusal is in a stronger negotiating position now that the
market environment has improved for it since the beginning of
the year. The banks should be relatively comfortable with the
refinancing," said Vadim Astapovich, a metals and mining analyst
at VTB Capital.
Rusal said its applications were expected to be heard by the
High Court Of Justice in London on July 10 and by the Royal
Court Of Jersey on July 15.
(Reporting by Sonali Paul and Polina Devitt; Editing by Jason
Bush and Jason Neely)