RusAl creditors approve merger with Sual, Glencore assets

Creditors of Russian aluminium giant RusAl have given their consent to the company's merger with Sual [RTS: SUAL], Russia's second-largest aluminium producer, and the alumina production assets of Switzerland's Glencore, RusAl said Thursday.

The two Russian aluminium giants and Switzerland's Glencore signed an agreement October 9 on the consolidation of their assets to create the world's largest aluminium producer, United Company Russian Aluminium. The deal required approval from the creditors of RusAl and Sual for a change in the shareholding structure of the companies under the terms of loan agreements.

"The enlarged business will become the new leader in the global aluminium and alumina production industry, with operations in 17 countries on five continents and more than 110,000 employees. The total production capability will be 4 million tons of aluminium and 11 million tons of alumina. The combined company will command 12.5% of the global primary aluminium market and 16% of the worldwide alumina volumes," RusAl said in a statement.

The shareholders of RusAl will hold a 66% stake in the newly enlarged company, while Sual will hold 22% and Glencore 12%, the statement said.

The creditors of Sual also gave their approval for the merger deal, the company said.

Russia's Anti-Monopoly Service (FAS) is expected to make a decision on the merger in the first quarter of 2007.

Founded in March 2000 following a merger of major aluminium plants in the former Soviet Union, RusAl holds 75% of the Russian market and 10% of the international market. The company exports aluminium to 50 countries and operates in nine Russian regions and 13 countries.

One of the world's top 10 aluminium companies, Sual has enterprises in nine Russian regions and in Ukraine, and annually mines over 5.4 million metric tons of bauxite, some 2.3 million metric tons of alumina, over 1 million tons of primary aluminium, and about 60,000 metric tons of silicon. It also manufactures aluminium products, including foil, wire, and wheel rims, and exports 80% of its production.

Switzerland-based Glencore is an international supplier of a wide range of commodities and raw materials to industrial consumers.