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CORRECTED-(OFFICIAL)-UPDATE 1-Russia's Rusal in $5 bln debt refinance deal with Sberbank
March 6, 2014 / 3:11 PM / 3 years ago

CORRECTED-(OFFICIAL)-UPDATE 1-Russia's Rusal in $5 bln debt refinance deal with Sberbank

2 Min Read

(Company corrects amount to $5 billion from $6 billion)

* Rusal has net debt of around $10 billion

* No clarity on terms of refinancing deal with Sberbank

* Earlier discussed an option to tie repayment with aluminium prices

LONDON, March 6 (Reuters) - Russian aluminium giant Rusal has reached a deal with Sberbank to refinance its $5 billion debt with the country's largest lender, Rusal Deputy Chief Executive Oleg Mukhamedshin said on Thursday.

Rusal, hit by weak aluminium prices and heavy net debt levels of around $10 billion, had been in talks on a debt restructuring deal with the state bank, sources said in 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 Rusal and Sberbank were discussing the 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 made by the state to Rusal during the financial crisis. It is now worth around $4.6 billion and matures in September 2016. The loan is secured against Rusal's stake in Russia's Norilsk Nickel, the world's leading miner of nickel and palladium.

Rusal, one of the world's biggest producers of the metal used in transport and packaging, has a primary listing in Hong Kong and secondary listings in Paris and Moscow. (Reporting by Susan Thomas; Additional reporting by Oksana Kobzeva; Writing by Polina Devitt; Editing by Jane Baird, Veronica Brown and David Evans)

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