Boston, MA 04/24/2014 (wallstreetpr) – Alcoa Inc (NYSE:AA) has been awarded Junk status by Ratings agency Fitch.
Key developments
The company has decided to close down a couple of its rolling mills and an aluminum smelter in Australia. A recycling facility and a rolling mill are situated in New South Wales while the smelter and the other mill are located in Victoria. The mills would be closed by this year end while the smelter will close by August this year itself. The smelter had been kept under strategic review in February 2012 following adverse and challenging market conditions.
The company has also planned to close down two potlines at its Massena East smelter in Newyork because the lines are not competitive anymore. This decision will cut the company’s smelting capacity by a good 84,000 tonnes. The Massena West facility, however, will not be affected adversely.
New alliances
Airbus has signed a multi-year supply agreement with Alcoa Inc (NYSE:AA) whereby it will provide aluminum aerospace forging and value-add titanium to Airbus. An agreement has been made for consideration of roughly $110 million. The parts will be produced at its facility in Cleveland which has recently been upgraded. Alcoa is already in another multi-year agreement with Airbus valued at nearly $1.4 billion since 2012. As per this agreement, Alcoa provides hard alloy extruded products and aluminum sheets and plates.
Russia`s VSMPO-AVISMA Corporation and Alcoa Inc (NYSE:AA) have planned to come together to meet the ever increasing demand for high-end aluminum and titanium products for aircraft manufacturers worldwide. The joint venture is expected to be operational by 2016 and is eyeing to tap opportunities in the global aerospace market.
Europe’s highest court, the European Union Court of Justice ordered Italy to claw back the state aid given to Alcoa in the last decade. The aid was in the shape of a preferential power tariff and amounted to $398 million. This verdict upholds a decision pronounced by the European Commission four years ago, when it ruled that the tariff for Alcoa Inc (NYSE:AA)’s Italian arm was illegal since it gave the Company an unfair edge over its rivals. The European Union competition authority dragged Italy in court after it refused to withdraw the aid.
