- Alcoa (NYSE:AA) offers further details of its plan to split in two, including moving some debt to its spun-off company in an effort to assist the credit rating of the remaining manufacturing entity.
- Alcoa will spin off the less-promising businesses into a company that keeps the Alcoa name and would continue trading on the NYSE under the AA symbol, while retaining the businesses that make products for the aerospace, automotive, transportation, and building and construction markets, which will be renamed Arconic and change its ticker symbol to ARNC.
- Alcoa says at least 80.1% of the spun-off company will be distributed to shareholders and 19.9% of the spun-off smelting business will be owned by Arconic.
- Alcoa would borrow ~$1B and return “a substantial portion” to Arconic, and Alcoa would get a revolving credit facility of as much as $1.5B; the division of debt and other liabilities is critical in implementing the plan to create a self-sufficient metal-producing company and achieve an investment-grade credit rating at the leaner industrial company that will remain.
- AA +0.7% premarket.