Alcoa Corporation (NYSE: AA) declared that it has finalized the divestiture of rolling mill and related assets near Evansville, Indiana, owned by Alcoa Warrick LLC, to Kaiser Aluminum Corporation. Alcoa maintains the possession of the 269,000 metric tons of smelting volume at the Warrick smelter, the Warrick electric generating divisions, and land investments in Warrick County, Indiana.
As per the sale contract, Alcoa has inked a supply agreement, a long-term ground lease, and a transition services contract with Kaiser. At the smelter and the power plant at the Warrick site, AA hires nearly 660 workers. AA has gained recognition as the worldwide the market leader in bauxite, alumina, and aluminum products, with a strong collection of value-added casts and moved products and significant energy assets.
Earlier, Alcoa has disclosed that it will divest its assets to Kaiser for the total payment of nearly $670 million. It also includes $587 million in cash and the supposition of $83 million in other postretirement employee benefits (OPEB) obligations. The payment amount is dependent on the post-execution modifications.
It has been disclosed earlier that the sale of the assets will be finalized by the end of the first quarter of 2021, awaiting supervisory clearance and traditional execution circumstances. Previously, it has been disclosed that Alcoa anticipated yearly estimated reductions in sales of $800 million, net income (pre-and after-tax) of $45 million to $55 million, and Adjusted EBITDA of $90 million to $100 million after the execution of the deal.
Furthermore, it has been disclosed that it will be based on the last 12-month valuing through September 2020. Alcoa anticipates spending roughly $100 million for site breakup and deal expenses, with roughly half being paid in 2021 and the rest will be paid in 2022 and 2023.