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Alcoa to sell up to USD 1bn of non-core assets
Posted on Thursday, 17 October 2019 11:17
Alcoa has pulled the trigger on a divestment programme to raise between USD 500.00 million and USD 1.00 billion in aggregate from the sale of non-core assets over the next 12 to 18 months.
The Pittsburgh-headquartered industrial corporation intends to streamline its operations after posting a wider-than-expected net loss amid slowing economic growth and trade tensions between the US and China.
It said it is placing under review 1.50 million metric tons of smelting capacity and 4.00 million metric tons of alumina refining volume.
The appraisal will focus on “opportunities for significant improvement, potential curtailments, closures or divestitures”.
Chief executive Roy Harvey told Bloomberg following the earnings results yesterday: “It’s also simply a way that we can make sure we have the right cash to help weather through the different parts of the market cycle.
“That is for us an important component of making sure we have the cash to be able to move through our restructuring process.”
Alcoa intends to maintain or improve its competitiveness in each segment, namely alumina, bauxite and aluminium, Harvey said in a conference call for the quarter ended 30th September 2019.
The company also expect to be the lowest per ton emitter of carbon dioxide among all global aluminium companies, in both smelting and refining, following the review and restructuring.
It ended Q3 with USD 841.00 million cash and USD 1.80 billion of debt – or net debt of USD 965.00 million – on its balance sheet.
Sales for the first nine months of 2019 were down at USD 7.99 billion (Q1-3 2018: USD 10.06 billion) and Alcoa incurred a net loss of USD 822.00 million for the period, compared to a profit of USD 199.00 million over the same timeframe in 2018.
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