Ailing Alcoa to slash costs and dividend, raise cash

WASHINGTON : Ailing US aluminium giant Alcoa said on Monday it would step up restructuring to battle the global economic crisis, slashing costs and its dividend and selling stock to raise 1.1 billion dollars. The loss-making Alcoa, which in early January announced it would cut some 13,500 jobs, or 13 percent, of its global workforce and reduce output, said it was taking a series of actions "to significantly improve the company's cost structure and liquidity." "By taking quick and decisive actions, Alcoa has been able to stay ahead of the evolving economic crisis," said Klaus Kleinfeld, president and chief executive of Alcoa, in a statement after the stock market close. "Today's actions better prepare Alcoa to manage through a prolonged downturn and position the company for the future." New operational cutbacks were expected to reduce costs by more than 2.4 billion dollars annually and spending cuts would generate an additional 1.0 billion dollars in 2010, the company said. Alcoa announced slashed its quarterly common stock dividend by 88 percent, to three cents a share from 17 cents, estimating a savings of 400 million dollars a year. "We are pleased to be able to continue Alcoa's record of paying a dividend every quarter for the past 60 years," said Kleinfeld. The company also said it was launching a public offering of common stock and convertible notes that it expected to generate about 1.1 billion dollars. Before the announcement, Alcoa shares had closed 6.81 percent higher at 6.12 dollars. In January Alcoa reported a quarterly net loss of 1.19 billion dollars that including significant reorganisation charges, saying its sales had plunged amid the deepening global economic crisis. - AFP/de