Creditors Push RusAl For Stake in RusHydro

A Barclays-led syndicate has asked United Company RusAl to transfer its part of a joint $520 million debt to RusHydro as part of the restructuring of the aluminum maker's debt, a copy of the document said. According to the original terms of the loan, the funds were borrowed on a 50/50 basis, meaning that RusAl's obligation totals $260 million. In the May 14 letter, which was also sent to RusHydro, Barclays Capital and other members of the lending syndicate asked RusHydro to take on the entire debt in exchange for RusAl's equity interest in a joint power plant and aluminum smelter project in Boguchansk, Siberia. "To ensure the effective exit of RusAl from the facility, the value of that equity interest would need to be sufficient to cover, at least, the RusAl obligations in relation to the facility," the letter said. RusAl is struggling under a $16.8 billion debt burden, and last week it agreed to extend to June 11 a two-month-old standstill agreement with foreign creditors over $7.3 billion in borrowings made during the precrisis raw materials boom. RusAl spokeswoman Vera Kurochkina declined to comment on the contents of the letter but said her company had no intention of surrendering its stake in the Boguchansk project to RusHydro. RusHydro spokesman Yevgeny Druzyaka said so far there had not been any discussion on the matter between the two companies and RusAl's creditors. He said, however, that RusHydro would be amenable to such a proposal. The two companies in 2006 agreed to carry out the $3.6 billion project, which includes a 3,000-megawatt power plant and a greenfield aluminum smelter with a projected capacity of 600,000 tons per year. They agreed on April 1 to postpone the smelter launch until 2012 because of declining aluminum demand but said they still intended to start operations at the power plant next year. Two weeks later, RusAl said it wanted to continue with the smelter project and compensate for the increased output by cutting production at less efficient Soviet-era plants. The mandated lead arrangers for the original $520 million credit agreement are Barclay's Capital, Calyon and Sberbank. source：www.themoscowtimes.com