March 28, 2014 / 4:35 AM / 3 years ago

UPDATE 1-Rusal posts steep 2013 loss, still in debt talks

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(Adds quotes, analyst comment)

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, compared with 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 earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $101 million, from $221 million the previous year.

"EBITDA was a little below expectations, as the EBITDA margin contracted," said equities analyst Andrew Driscoll from CLSA.

Shares of Hong Kong-listed Rusal fell as much as 4 percent after the result before rebounding to be down 1.5 percent.

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.

Debt Talks

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 in Friday's statement that the 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 owes international lenders about $2.6 billion and to the Russian lenders about $1 billion," Rusal's chief financial officer Alexandra Bouriko told a conference call.

"The company is finalizing amendments to these facilities, with the objective to obtain approval from the lenders before March 31," she said.

"We believe that with the conclusion of refinancing, it will allow the company to maintain a sustainable cash position in anticipation of the market rebound."

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

Outside of China, it forecast a deficit of 1.3 million tonnes in the global aluminium market in 2014, from a deficit of 455,000 tonnes in 2013. That could support premiums of aluminium as the physical market remains tight and financial demand for the metal stays robust.

Physical premiums reached record highs in end-2013 and the rise has continued into 2014 with the U.S. Mid-west at 20 cents/lb and Rotterdam $275-$315 per tonne in January, Rusal said.

The premium is paid by buyers on top of the London Metal Exchange cash aluminium price to secure physical metal . In Asia, premiums for spot aluminium were currently at $340-$360 per tonne, traders said.

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 should be in balance this year, Rusal 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.

Reporting by Polly Yam and Polina Devitt in MOSCOW; Additional reporting by James Pomfret and the Hong Kong bureau; Editing by Richard Pullin

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