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Norsk Hydro Bid for Asia Aluminum May Be Opposed, Letter Shows

Wednesday, Jun 24, 2009
June 24 (Bloomberg) -- Zhaoqing, the Chinese city where Asia Aluminum Holdings Ltd. employs about 10,000 people, may oppose an offer from Norsk Hydro ASA for the company’s assets. The city’s bureau of foreign trade and economic cooperation said in a June 19 letter to Ferrier Hodgson Ltd., Asia Aluminum’s provisional liquidators, that Oslo-based Norsk Hydro may make a bid this month for what was formerly the region’s biggest maker of extruded aluminum. “This kind of expression of interest will only cause delay,” the bureau said in its letter. “We support the restructuring proposal submitted by the management, and hope the restructuring can be completed as soon as possible.” Asia Aluminum canceled a debt restructuring plan in March that the Hong Kong-based company said was “crucial” to stave off bankruptcy. Investors snubbed the company’s Feb. 13 offer to pay as much as 27.5 cents on the dollar to buy back its $450 million in 8 percent bonds due 2011 and parent AA Investments Co.’s offer of 13.5 cents for so-called pay-in-kind notes. Ferrier Hodgson, appointed provisional liquidators on March 16, had one offer for the company’s assets as of June 12, from Asia Aluminum’s management, according to a stock exchange filing. Norsk Hydro may offer more than $300 million for the assets while the management team’s offer is worth $297 million after Asia Aluminum’s debts are paid, the South China Morning Post reported on June 20, without saying where it got the information. Norsk Hydro dropped its bid, the Wall Street Journal reported yesterday, citing an unidentified person familiar with the situation. Beverage Cans Halvor Molland, a Hydro spokesman, and Arnstein Sletmoe, senior vice president of mergers and acquisitions, declined to comment. Ferrier Hodgson executive director Rod Sutton wasn’t available for comment and no-one could be reached at Asia Aluminum or Zhaoqing’s bureau of foreign trade and economic cooperation. Asia Aluminum was founded by Kwong Wui Chun in 1992 and makes aluminum in Zhaoqinq, located in China’s southern Guangdong province, for construction, machinery, beverage cans and vehicles, according to its Web site. The management team’s buyout proposal will lead to “social stability and protect the employment of 10,000 workers,” Zhaoqing city’s letter said. To contact the reporter for this story: Tom Kohn in Hong Kong at tkohn@bloomberg.net

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