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| February 12, 2009
Exit of Shining Prospect to Improve Alcoa Balance Sheet
Alcoa to Receive More Than $1 Billion
in Cash
NEW YORK--(BUSINESS WIRE)--Alcoa today announced it is exiting the Shining Prospect special purpose
vehicle formed together with Chinalco to purchase shares in Rio Tinto
plc. Alcoa will receive a total of $1.021 billion in cash payable in
three installments over a six-month period ending July 31, 2009. Alcoa
also will receive its pro rata portion of dividends paid by Rio Tinto to
date since the investment was made as and when recovered by Shining
Prospect.
This transaction will improve Alcoa’s cash position and result in a
positive impact on the Company’s debt-to-capital ratio. The Company will
record a non-cash after-tax loss of approximately $120 million on the
investment in the first quarter of 2009.
“This transaction, combined with our intention to explore opportunities
to expand our commercial relationship, strengthens Alcoa’s ability to
weather the economic downturn,” said Klaus Kleinfeld, Alcoa President
and CEO. “When the global economy recovers, the pent-up consumer and
industrial demand will create a broad array of opportunities in both
developed and developing regions for Chinalco and Alcoa.”
Alcoa is the world leader in the production and management of primary
aluminum, fabricated aluminum and alumina combined, through its active
and growing participation in all major aspects of the industry. Alcoa
serves the aerospace, automotive, packaging, building and construction,
commercial transportation and industrial markets, bringing design,
engineering, production and other capabilities of Alcoa's businesses to
customers. In addition to aluminum products and components including
flat-rolled products, hard alloy extrusions, and forgings, Alcoa also
markets Alcoa® wheels, fastening systems, precision and investment
castings, and building systems. The Company has been named one of the
top most sustainable corporations in the world at the World Economic
Forum in Davos, Switzerland and has been a member of the Dow Jones
Sustainability Index for seven consecutive years. More information can
be found at www.alcoa.com.
Forward-Looking Statements
Certain statements in this release relate to future events and
expectations and as such constitute forward-looking statements involving
known and unknown risks and uncertainties that may cause actual results,
performance or achievements of Alcoa to be different from those
expressed or implied in the forward-looking statements. Alcoa disclaims
any obligation to update publicly any forward-looking statements,
whether in response to new information, future events or otherwise,
except as required by applicable law. Important factors that could cause
actual results to differ materially from those in the forward-looking
statements include: (a) uncertainties regarding the duration or severity
of the current global economic downturn and their impact on Alcoa; (b)
material adverse changes in aluminum industry conditions generally,
including global supply and demand conditions and fluctuations
(including sustained declines) in London Metal Exchange-based prices for
primary aluminum; (c) Alcoa’s inability to achieve the level of cost
reductions, cash conservation or return on capital improvement
anticipated by management; (d) continued volatility or deterioration in
the financial markets or further downgrades in Alcoa's credit ratings
which may adversely affect the cost of borrowing or ability to access
the credit or capital markets; and (e) the other risk factors summarized
in Alcoa’s Form 10-K for the year ended December 31, 2007, Forms 10-Q
for the quarters ended March 31, 2008, June 30, 2008 and September 30,
2008 and other reports filed with the Securities and Exchange Commission.
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