Business News
Exit of Shining Prospect to Improve Alcoa Balance Sheet
Friday 13. February 2009 - Alcoa to Receive More Than $1 Billion in Cash
Alcoa today announced it is exiting the Shining Prospect special purpose vehicle formed together with Chinalco to purchase shares in Rio Tinto plc. Alcoa will receive a total of $1.021 billion in cash payable in three installments over a six-month period ending July 31, 2009. Alcoa also will receive its pro rata portion of dividends paid by Rio Tinto to date since the investment was made as and when recovered by Shining Prospect.
This transaction will improve Alcoas cash position and result in a positive impact on the Companys debt-to-capital ratio. The Company will record a non-cash after-tax loss of approximately $120 million on the investment in the first quarter of 2009.
“This transaction, combined with our intention to explore opportunities to expand our commercial relationship, strengthens Alcoas ability to weather the economic downturn,” said Klaus Kleinfeld, Alcoa President and CEO. “When the global economy recovers, the pent-up consumer and industrial demand will create a broad array of opportunities in both developed and developing regions for Chinalco and Alcoa.”