Alcoa 150 Million-Share Follow-On Offering Prices At $5.25/Share

Alcoa Inc. (AA) will sell 150 million common shares at $5.25 each to raise $ 787.5 million to boost its liquidity. The price is a 4.2% discount from the Wednesday closing price of $5.48. The secondary offering will boost shares outstanding by about 19%. The offering includes an option to offer an additional 22.5 million shares. The aluminum giant has said another $250 million could be raised in a sale of convertible notes due in 2014. Morgan Stanley and Credit Suisse are handling the transactions. On Monday, Alcoa said it would slash its dividend 82% to 3 cents to save $400 million and is embarking on a new round of cost-cutting to reduce operational expenses by $2.4 billion. Those measures are in addition to the earlier cuts this year that included 15,000 layoffs, asset sales and plant closures. In a regulatory filing Monday, the company said it expects to record a net loss in the first quarter. Aluminum prices, sales and demand world-wide have been sliding since last year as manufacturing, automobile and construction sectors dial back their use. Alcoa's stock price has fallen about 88% in the past year. -By Adam O. Manzor, Dow Jones Newswires; 201-938-5400; adam.manzor@ dowjones.com (END) Dow Jones Newswires 03-18-09 1943ET Copyright (c) 2009 Dow Jones & Company, Inc.