Reuters reported that Russia's RUSAL has extended a waiver from its banks to end 2013 to meet required financial conditions on USD 4.75 billion syndicated loan as it battles lower prices and high debt.

The aluminium giant had reached agreement in March to get a 12 month holiday on its conditions or covenants under the loan and has now reached an agreement to push that holiday to the end of next year.

RUSAL, controlled by businessman Mr Oleg Deripaska is encumbered by net debt of USD 10.85 billion which partly stems from the purchase of a stake in Norilsk Nickel in April 2008 for an estimated USD 14 billion.

RUSAL said that aluminium prices have fallen 6% since the start of the year on concerns about weakening global demand for the metal. With the price level currently around USD 2,000 per tonne roughly 20% to 25% of global aluminium production is loss making.

The company did not disclose the terms of the covenants that it may have difficulty in meeting. Typical covenants may require a company to keep its net debt and its interest payments at certain ratios to its operating earnings.

Rusal said that it also intended to make an early repayment of no less than USD 406 million on debt due in 2013. This early repayment will be made by the end of 2012 and will include approximately USD 300 million of the company's own cash with the remaining amount to be forthcoming from available credit lines. After the repayment, the amount due for payment under the existing credit facilities in 2013 will fall to USD 900 million mainly payable in the H2 of 2013 from USD 1.3 billion.

The company said that it planned to ensure it will have a sufficient amount of available credit lines which if necessary could be used to refinance the remainder of the payments in 2013. It already has significant support from its international and Russian lenders.

Source - Reuters

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