Rusal has suspended additional funding for its US project with Unity Aluminum citing the latter’s failure to raise equity.
The Russian aluminum producer indicated during an analyst call to report its earnings on Mar 17 that it expected Unity to raise the required funds after the COVID-19 pandemic subsides. To date, Rusal has invested $65mn of its previously agreed share of $200mn in the venture.
Oleg Mukhamedshin, Rusal’s deputy chief executive officer, noted the company would consider the option of converting its investment into debt-based securities if Unity was unable to raise its share of funds.
The investments were slated to be used in building a new $1.3bn aluminum rolling mill in Kentucky, USA, to meet the metal’s growing demand in the automotive, aerospace, and packaging industries. The suspension will be a setback for both Rusal and Unity, according to media reports.
Rusal’s 2020 aluminum production accounted for 5.8pc of the global share at 3.75mn mt. The company’s total aluminum sales in 2020 decreased 6.9pc as compared to 2019 at 3.926mn mt.
The company’s revenue declined by 11.8pc to $8.56bn in 2020 compared to $9.7bn in the previous year due to a 5pc drop in the average LME Aluminium prices and a 6pc fall in primary aluminum and alloys shipments last year, the company said in its earnings report on Mar 17. The aluminum maker’s adjusted EBITDA decreased by 9.8pc to $871mn last year from $966mn in 2019.