As the effects of the receding economy hit aluminum giant Alcoa Inc hard with a $1.2 billion loss late last year, the biggest announcement for metal producer in the first three months of the new year was its plan to substantially reduce costs and raise cash by 2010.
Presenting its first quarter earnings today, the Pittsburgh, PA-based company has faced steep declines in demand for metals as it refocuses itself, divesting itself of businesses which don’t fall into its strengths
Below is a review of some significant developments during the quarter.
March 31 - Alcoa focuses on expertise in Norway, gets additional smelting capacity. In a cashless deal, it gains a stake in a pair of aluminum smelting facilities while giving up its stake in a soft-alloy extrusion profile joint venture. See release here.
March 19 - Announces a plan to raise around $1.9 billion through a $1.3 billion sale of common stock and up to $575 million in convertible notes due in 2014. See release here.
March 16 – Announces various steps to save and raise cash by 2010. It will cut operating costs by $2.4 billion until that time. It will also reduce spending on capital by $1 billion. To save another $400 million it decides to cut shareholder dividends. It also announces it will raise $1.1 billion by selling stock and offering convertible notes. See release here.
March 12 – Agrees to provide its knowhow and technology services to the Henan Province government in China to develop its aluminum industry. See release here.
March 12 – Alcoa takes a $120 million non-cash after tax loss after exiting a venture with Chinalco to buy shares of Rio Tinto. Alcoa to get back $1 billion from the venture later in 2009. Alcoa says it expects aluminum demand to bounce back over the next decade with the highest growth in Asia. See release here.
January 13 – Announces a $600 million modernization plan, pending preparations, for its operations in Massena, New York. See release here.