Alumina sells $266m in shares for expansion

Alumina, partner in the world’s biggest producer of the material used to make aluminum, sold $266 million in shares to individual and institutional investors to help fund an expansion in Brazil. About 53 per cent of the shares offered were sold to individual holders at $3.00 and the balance was bought by institutions, Melbourne-based Alumina said today in a statement. It has raised a total of $910 million after selling $644 million of shares to institutional shareholders earlier this month. Alumina and Alcoa, its partner in the Alcoa World Alumina and Chemicals venture, or AWAC, want to increase output to meet demand for aluminium. The cost of the companies’ expansion in Brazil has risen 48 per cent to $3.7 billion because of higher materials and labour expenses as well as local currency gains. “We are now in a position to fully fund our share of the capital costs for AWAC’s growth projects in Brazil and have strengthened our balance sheet in the process,” Alumina chief executive John Bevan said in the statement. Aluminium is used in making cars, planes and beverage cans. Alumina fell as much as 8.1 per cent to $3.52 and was at $3.54 at 8.48am on the Australian stock exchange. A total of 42.1 million shares, which weren’t bought by existing holders, were sold to other institutions at $3.35 a share, Alumina said. Those holders who decided not to take up their entitlements, and ineligible individual holders, will receive 35 cents for each share, it said. ---BLOOMBERG