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Alcan hopes to remain involved in Sebree

Keywords: Tags  Rio Tinto Alcan, F. James Dickson, sales, Cleveland, Century Aluminum, Sebree, Ky., acquisition M&A


CHICAGO — Rio Tinto Alcan wants to continue to play a role selling metal produced at its smelter and cast house in Sebree, Ky., even after selling the operation to Century Aluminum Co. later this spring, according to a letter to customers.

The company, which said it has already agreed to honor all current commercial agreements for the sale of billet and ingot from Sebree through the end of 2013, said it is also in talks with Century to maintain some sourcing presence at the facility in “2014 and beyond.”

“It is our strong hope and desire that over the next 60 days we will be able to work out an arrangement with Century Aluminum in which (Rio Tinco Alcan) will be able to continue to source product for you from the Sebree facility,” Rio Tinto Alcan’s commercial director for North America F. James Dickson wrote in an April 29 letter to customers.

The company did not specify in the letter how it hoped to stay involved in the sourcing of metal from the facility after 2013, such as through an off-take agreement or through some kind of marketing deal. A spokesman for Rio Tinto Alcan did not return a call seeking comment.

Century Aluminum Co. agreed in late April to acquire Rio Tinto Alcan’s operations in Sebree for $61 million in cash and the assumption of $4 million in liabilities. Monterey-based Century also received $71 million in working capital from Montreal-based Rio Tinto Alcan as part of the deal (amm.com, April 29).

Rio Tinto Alcan had said the deal was expected to close by the end of June, but the customer letter, dated the same day the sale was announced, said the deal is expected to be completed by the end of May.

Century is working for “an early June close” of the Sebree transaction, a Century spokesman said in an e-mail to AMM May 10.

The Century spokesman told AMM the company does not anticipate any “immediate changes” to customer and supplier agreements at Sebree as a result of the ownership change. “All existing agreements will remain in place and will continue to be honored,” the spokesman said, declining to comment further on Rio Tinto Alcan’s possible off-take or marketing role at the facility following the sale.

Through the end of this year, Rio Tinto Alcan said in the letter that it would continue to handle order entry, sales, invoicing, product specifications, and other customer and technical support services with its existing staff at its Cleveland sales office.

AMM reported in March that Rio Tinto Alcan hoped to maintain a presence in the United States after selling Sebree given a strong customer base and brand presence, as well as an expected increase in aluminum demand in the country. Among the options discussed for achieving that goal was retaining a stake in Sebree (amm.com, March 20).

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