Alcoa Corp (NYSE:AA) reported decisions pertaining smelting assets in Italy and the United States. The measures support the firm’s strategic priorities to strengthen the balance sheet and to lower complexity.
In the U.S., Alcoa plans to permanently terminate its Rockdale Operations location in Texas, which has been curtailed since the close of 2008. The site comprises a primary casthouse and aluminum smelter, an aluminum powder facility and associated equipment and buildings. Alcoa’s strategic assessment of these assets, reported earlier this year, stated that these operations showcase limited economic prospects. Distinctly, the firm remains to market for sale land of over 30,000 acres at the Rockdale site.
In Italy, company has reached a deal to sale the Portovesme primary aluminum smelter, curtailed since 2012 and shut since 2014, to Invitalia. As part of the deal, the Italian government and Alcoa have settled matters linked to previous energy tariffs. Roy Harvey, the CEO and President, expressed that they continuously evaluate their portfolio of international assets against many factors to enhance value. Recording a resolution on these two resources further streamlines their firm as they continue to execute against their strategic priorities.
Alcoa will record a projected charge of $55 million in Q4 2017 related with the permanent shutting of Rockdale. Besides, the firm will record a projected $22 million reserve reduction in Q4 2017 linked with a reserve established at the close of 2015 for the Italy matter. The company expects yearly adjusted EBITDA benefits of around $3 million upon closure of the Rockdale retiring in 2022, and of around $4 million upon close of the Portovesme divestiture this year.
In the last trading session, the stock price of Alcoa gained more than 1% to close the day at $56.91. The gains came at a share volume of 2.74 million compared to average share volume of 4.02 million.