Rusal Goes to Court to Force Restructuring on Debt Holders

NEW YORK (The Deal) -- The world's biggest aluminum maker United Co. Rusal warned Friday, June 27, it will go to court to impose a restructuring agreement on the holders of about 6% of its debt that haven't backed plans to rewrite the terms of $5.15 billion of loans.

Moscow-based Rusal will apply to courts in England and in Jersey, the Channel Islands, to impose a scheme of arrangement that will allow it to push through the restructuring of a $4.75 billion loan and a $400 million pre-export financing, or PXF.

The restructuring has the support of holders of 94% of the debt. Those creditors have also agreed to extend a debt waiver until the end of October to give the company time to negotiate with the rebel minority or receive the court's ruling. The waiver had been due to expire on July 7.

The restructuring "will stabilize and strengthen Rusal's debt profile and financial position for the benefit of the company and all of its creditors," Rusal Deputy CEO Oleg Mukhamedshin said in a statement. "For that reason, the company is determined to implement them with the help of the courts, together with the support of the vast majority of its PXF lenders."

Rusal, which billionaire Oleg Deripaska controls, took on loans in 2008 to help fund its acquisition of a 25% stake in OAO GMK Norilsk Nickel. It has struggled to meet repayment since 2011 following a collapse in the price of aluminum and the value of its stake in Norilsk. Rusal posted a net loss of $3.2 billion in 2013 and had net debt of $10.3 billion at the end of March.

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