Alcan Parent To Sell For $280m
Sydney Morning Herald
Saturday March 5, 1994
Alcan Aluminum of Canada yesterday signalled its intention to sell off its$280 million stake in Alcan Australia Ltd and sever its 58-year tie with the integrated aluminium producer.
The selloff is the likely consequence of a review the Montreal-based parent announced it was making of its shareholding in Alcan Australia as part of a world-wide evaluation of its aluminium businesses.
Alcan Australia's company secretary, Mr John Krenich, said yesterday the parent company was still evaluating alternatives but the bottom line was that a selloff was more likely than the Canadian company deciding to retain its 73.3 per cent stake.
Mr Krenich said this would not jeopardise the operations of Alcan Australia as the company was to a large degree separate from its parent apart from sourcing alumina from Queensland Alumina's Gladstone refinery, which is partly owned by the parent company.
"It is business as usual. That is what we are telling our employees and customers."
The possible sale is after the recent appointment of Mr Jacques Bougie as chief executive officer. Mr Bougie has refocused the group on its major North American and European smelting and large-scale rolling operations.
Since his appointment last year, Mr Bougie has taken an aggressive stance to clean up the group's balance sheet after several years of negative cash flow due to low aluminium prices and a heavy capital expenditure program.
Mr Bougie has decided the upstream businesses in North America and Europe are where the group's future mainly lies.
Earlier this week, Alcan also announced it would sell off its North American building products division, which had a turnover of $US425 million($590 million) last year and employees 1800 people.
Alcan Australia is now one of the group's strongest subsidiaries.
In January, it announced a return to profit despite aluminium prices falling to a record low in the second half of last year. It earned $772,000 during the half, its first profit since 1989.
The profit followed success in trimming costs across the board and strengthening sales in the Australia market, which it mainly relies on. The local company's major asset is its Kurri Kurri smelter but it also has a sheet rolling mill and extrusions mills at Granville in Sydney's west and other plants in Melbourne, Brisbane and Auckland.
CS First Boston is advising the Canadian parent.
© 1994 Sydney Morning Herald
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