RusAl Gets Reprieve With Debt Repayment Accord

United Company RusAl, an aluminum producer controlled by billionaire Oleg Deripaska, agreed to stop debt repayments for two months as it tries to renegotiate $7.4 billion of borrowings from foreign banks. The company has the option to extend the so-called standstill accord by an extra month, RusAl said in a statement Friday. RusAl amassed $14 billion of debt as it expanded smelters in Siberia, acquired a mine and a smelter in Africa and agreed to help finance nuclear and hydropower plants in Russia. Aluminum dropped 60 percent in London since trading at a record $3,380 per ton in July after demand slumped amid a global recession. "Any easing of debt payments will give RusAl a second wind," said Alexander Pukhayev, an analyst with VTB Capital. "Unless bankers want to manage aluminum-making, restructuring debt is the only way." RusAl said the agreement covered more than 30 transactions involving more than 70 banks, including syndicated and bilateral loan agreements, bank guarantees and letters of credit. It did not name the banks involved. Credit Suisse Group, BNP Paribas, Merrill Lynch, ABN Amro Holding, Citigroup, Natixis, Commerzbank, ING Group and Calyon are among RusAl's creditors, according to Bloomberg data. Russian banks and the majority of foreign lenders support the standstill, RusAl said. During the payment freeze, RusAl will reorganize debts "to the benefit of all stakeholders," it said. The company owes $2.8 billion to Mikhail Prokhorov, whose Onexim Group sold RusAl a 25 percent stake in Norilsk Nickel last year. RusAl may convert some of that debt into shares, RusAl chairman Viktor Vekselberg said in January. source：www.themoscowtimes.com