Alumina proposed to amend AWAC`s agreements in order to protect the interests of Alumina`s shareholders and said the two sides have been in talks since the beginning of this year. “We have updated the joint venture agreements to reflect the new realities of our industry and the individual circumstances of Alcoa and Alumina,” said Peter Wasow, Chief Executive Officer of Alumina. “These agreements strengthen the AWAC joint venture for Alcoa and Alumina and give companies more control over their investments and future strategic options. We have had a successful relationship with Alcoa for over 50 years and look forward to working together in this next phase. Shares of Alumina Ltd rose 6% on Friday in afternoon trading to $1.38. The company`s chief executive, Peter Wasow, said the new deal is expected to strengthen AWAC`s position as an industry leader. Alcoa said its proposed spin-off was similar when Alumina Ltd separated from Western Mining Corp more than a decade ago. Alcoa has no pre-emptive rights at this stage or the right to block the split under the AWAC agreements. The filing described Alumina Ltd`s interpretation of Alcoa`s rights and obligations under the AWAC agreements and the errors identified in Alcoa`s arguments against Alumina Ltd`s claim that the company should play a role in Alcoa`s spin-off. In recent months, Alcoa has tried to split into two small companies, but ASX-listed Alumina Ltd thwarted that process by claiming that its joint venture agreement with the U.S. company would give it the first rights in Alcoa`s 60 percent stake in a joint venture called AWAC. Copies of the main agreement are available as PDF files.
“We are strengthening our partnership agreement and bringing the interests of the partners more closely together. We are also creating a wider range of value-creating options for AWAC by providing its owners with greater strategic flexibility,” said Harvey. `In addition, in the event of a change of control, the prohibitions on exclusivity and competition under the current joint venture agreements would end and be replaced by initial offer rights for extensions and other development projects that any party can carry out outside the joint venture.` “We believe these changes will create a true win-win situation and increase the value of our AWAC joint venture, the future Alcoa Company, and its shareholders,” said Alcoa`s Global Primary Products President and future ALCOA Corporation CEO Roy Harvey. “We are strengthening our partnership agreement and bringing the interests of the partners more closely together. We also create a wider range of value-creating options for AWAC by providing its owners with greater strategic flexibility. Among other things, this opens the door for an industrial partner to enter the joint venture and become, like Alcoa, a long-term customer for bauxite and alumina. Alcoa looks forward to closing our separation, creating two strong companies before the end of the year, and working closely with Alumina to realize the full potential of the AWAC partnership. Overall, the amendments to the joint venture agreements are intended to enhance the coherence of partners` interests in AWAC, while providing greater strategic flexibility and autonomy to both partners. Alumina then filed a counterclaim at the end of June. The counterclaim refuted all the essential elements of Alcoa`s claim and also requested that the Tribunal stop alcoa`s separation, unless it met Alumina Ltd`s obligations. under the AWAC Agreements and requires the Company to receive offers to acquire Alcoa`s shares in AWAC, in accordance with the first option rights set out in the Agreement.
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