OREANDA-NEWS. December 23, 2011. UC RUSAL (SEHK: 486, Euronext: RUSAL/RUAL, MICEX: RUALR, RTS: RUALR), the world’s largest aluminium producer, announces commencement of negotiations with lenders in line with existing risk management procedures.

In light of possible continuing weakness of global commodity markets over the next 12 months, RUSAL has started discussions with its International and Russian lenders with a view to adapting the current terms of the credit facilities to better reflect the volatile global markets environment. In particular, only development of a more flexible approach to the calculation of covenants, including an introduction of a period, during which the covenants are not tested, is being negotiated.

Such consultations are part of the existing prudent internal risk management procedures that have been established by the Company, which also include cost optimisation, working capital management, tight control over investment programmes and renegotiation of commercial terms with suppliers.

In spite of the current volatile market conditions, UC RUSAL is well positioned to fulfill all the obligations under the credit facilities. The Company reported strong financial results for the third quarter of 2011, showing an adjusted EBITDA for 9 months 2011 of USD2,130 million and a Net Operating Cash Flow of USD1,269 million. Since the beginning of 2011, the Company has successfully decreased its debt by making repayments totalling over USD700 million from its operating cash flow which improved the Covenant leverage ratio from 4.1 to 3.5.

During the 4th quarter of 2011, RUSAL has fully refinanced its credit portfolio, extending the average maturity of debt to over four years. Currently, RUSAL's average effective annual interest rate stands at 4.7%. Short term obligations for the year 2012 are limited to USD600 million which is fully covered by the committed credit facility signed by Sberbank.