Rusal raises loan to buy a stake in Norilsk Nickel

On Friday, UC Rusal and a syndicate of 11 international banks signed off an agreement to extend the aluminum holding a $4.5 bln loan to buy a 25% + 1 share stake in Norilsk Nickel, according to a statement issued by the loan arrangers ABN Amro, BNP Paribas, Credit Suisse and Merrill Lynch. A Rusal spokesperson added that the deal to purchase Mikhail Prokhorov’s shareholdings would be wrapped up by the end of March. As a result, Rusal’s net debt should increase from $8.8 bln to $13.3 bln.

According to expert estimates, the company’s FY07 EBITDA margin is 38.5%, which, adjusted for the new loan, implies a net debt/EBITDA ratio of 2.4, which is conspicuously larger than the metallurgical sector average. In line with the agreement struck with Prokhorov, Rusal will be entitled to buy 11% of his shares if the company scuttles plans to float an IPO in 2009.