UC RUSAL has offered RusHydro a stake in the future $1.4-1.6 billion Taishet Aluminum Smelter in exchange for some debt of the smelter and a discount for the power the hydropower company will sell to it.
Earlier in June, RUSAL CEO Vladislav Solovyov said that the company offered RusHydro a 50% stake in a project to complete construction of the Taishet Aluminum Smelter in the Irkutsk region.
Representatives of a Russian investment bank and a bank that is negotiating project financing for the smelter said that the size of the stake and the discount were under discussion, but the talks were slow and investors were concerned with terms and the financing model of the project.
Sberbank, Gazprombank and Vnesheconombank (VEB) are ready to provide financing for the project, but RusHydro’s participation and the discount are vital, because serious risks emerge for RUSAL without participation of the power company, sources said.
Construction of the facility with a projected annual production capacity of 750,000 tons of aluminum started in 2006, but was frozen in 2009 because of the global economic crisis. RUSAL has already invested over $760 million of its own funds. RUSAL is holding talks with investors, including a consortium of Gazprombank, Sberbank, and VEB, on partial financing of further construction of the plant.
In April, RusHydro’s board of directors discussed participation in the Taishet Aluminum Smelter, but made no decision. The company said then it planned to focus on development of the core business. But on June 7, Deputy Economic Development Minister Nikolai Podguzov said that the company had not made a final decision on the matter. (Prime/Ukrainian metal)