Boston, MA 10/16/2014 (wallstreetpr) – According to reports, Alcoa Inc (NYSE:AA) and NOBLE GROUP LTD (OTCMKTS:NOBGF) announced collectively that they had decided to sign a definitive agreement. According to this agreement, Alcoa World Alumina and Chemicals would have to sell 100% of its ownership stake in alumina refining joint venture and Jamalco bauxite mining to NOBGF. As per the information, NOBGF would be paying $140 million in return to the stake.
Insights of the matter:
An agreement has been signed with quite a few conditions between both the entities. AWAC will hold its position of managing operator for another three years. All the employees will be employed by Jamalco.
Clarendon Alumina Production Ltd. has 45% stake in Jamalco Joint Venture, while Alcoa Minerals of Jamaica has 55% stake. At the same time, Alcoa Minerals of Jamaica is also a part of AWAC joint venture, in which 60% is owned by Alcoa Inc (NYSE:AA), while 40% is owned by Alumina Limited. Clarendon Alumina Production Ltd is a wholly owned company by Government of Jamaica.
The decision to sell AWAC stake in Jamalco has been taken by Alcoa Inc (NYSE:AA) in order to reduce the cost base of its commodity business and reshape its upstream portfolio. According to Bob Wilt, President, AA Global Primary Products, this sale transaction will help the company to fulfill all of its strategic goals without any hassle. It won’t let the transaction affect the jobs at Jamalco and company’s contribution towards the local economy.
According to Mark Hansen, Head of the Metals Division at NOBGF, with the help of this transaction, NOBGF will get additional 778,800 metric tons annual alumina off-take. He also clarified that Jamaica government will retain its 45% ownership in the company. The transaction has been executed in line with NOBGF’s commitment to working with best in class organizations like Alcoa Inc (NYSE:AA) without affecting supply for customers.
