Amendment to Scheme Implementation Deed On 12 March 2024, Alumina Limited (Alumina) announced that it had entered into a Scheme Implementation Deed (SID) with Alcoa Corporation (Alcoa) in relation to a proposal for Alcoa to acquire 100% of the fully paid ordinary shares in Alumina by way of a scheme of arrangement (the Transaction).
Alumina announces that together with Alcoa, it has entered into an amending deed to the SID and ancillary transaction documents (Amending Deed) to amend the form of consideration to be issued to CITIC Group (CITIC) and the Depositary and/or Custodian (as relevant) of Alumina's American Depositary Receipt Program (ADR program).
The Amending Deed provides for: CITIC, Alumina's second largest shareholder, to receive a small portion of its consideration under the Transaction in the form of Alcoa non-voting convertible series A preferred stock (New Alcoa Preferred Shares), instead of Alcoa CDIs,1 to enable compliance with the US Bank Holding Company Act of 1956. The US Bank Holding Company Act of 1956 prevents CITIC, which holds certain banking assets in the United States, from holding more than a 5% interest in any class of voting shares in a U.S. public company. Accordingly, if the Transaction is implemented, CITIC would receive Alcoa CDIs representing up to 4.5% of the total voting shares on issue in Alcoa, with the balance of its consideration being provided in the form of New Alcoa Preferred Shares. The economic rights of the New Alcoa Preferred Shares are generally equivalent to the economic rights of the Alcoa CDIs, except that the New Alcoa Preferred Shares will: (a) have a liquidation preference of US$0.0001 for each share; (b) convert into Alcoa common stock on a 1:1 basis upon transfer to a party that is not an affiliate of CITIC, subject to anti-dilution provisions and other customary adjustments and (c) have no voting rights except as required by applicable law or in relation to a change in the existing rights of New Alcoa Preferred Shares. The Depositary and/or Custodian of Alumina's ADR program to receive Alcoa common stock as consideration under the Transaction, instead of Alcoa CDIs.
Progress Update on Transaction
On 20 May 2024 (Eastern Time), Alcoa lodged a preliminary proxy statement with the US Securities and Exchange Commission. The preliminary proxy statement relates to a proposed meeting of Alcoa stockholders which will consider a resolution to approve issuance of Alcoa common stock and New Alcoa Preferred Shares under the Transaction. The preliminary proxy statement has been prepared for the benefit of Alcoa stockholders and includes certain information relating to Alumina, including financial information. Alumina will today lodge a confidential draft scheme booklet in relation to the Transaction (Scheme Booklet) with the Australian Securities and Investments Commission. The Scheme Booklet will contain information about the Transaction, Alumina, Alcoa and the combined group, including a Board recommendation,2 key advantages and potential disadvantages of and key risks in connection with the Transaction. It will also include an independent expert's report. As set out in Alumina's 12 March ASX announcement, the Transaction is subject to a number of conditions, including regulatory approvals and approval of Alumina shareholders at a scheme meeting which is targeted to be held in 3Q 2024. The required regulatory approvals include approvals from Australia's Foreign Investment Review Board and Brazil's antitrust regulator. The Australian Competition and Consumer Commission has indicated it does not intend to conduct a public review of the transaction. Subject to Alumina shareholders approving the Transaction, and the other conditions precedent including regulatory approvals being satisfied or waived, the Transaction is expected to be implemented during 3Q 2024.
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Forward-looking statements
All statements other than statements of historical fact in this communication or referred to or incorporated by reference into this communication are 'forward-looking statements'. The words 'anticipate', 'aim', 'believe', 'expect', 'project', 'estimate', 'forecast', 'intend', 'likely', 'should', 'could', 'will', 'may', 'target', 'plan' and other similar expressions (including indications of 'objectives') are intended to identify forward-looking statements. Indications of, and guidance on, future financial position and performance and distributions, statements regarding Alumina Limited's future developments and the market outlook, and statements regarding the future process for the Transaction, are also forward-looking statements. Any forward-looking statements contained in this document are not guarantees of future performance. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Alumina Limited and its directors, officers, employees and agents that may cause actual results to differ materially from those expressed or implied in such statements. Those risks, uncertainties and other factors include (without limitation): (a) material adverse changes in global economic conditions, alumina or aluminium industry conditions or the markets served by AWAC; (b) changes in production or development costs, production levels or sales agreements; (c) changes in laws, regulations, policies or regulatory decision making; (d) changes in alumina or aluminium prices or currency exchange rates; (e) Alumina Limited does not hold a majority interest in AWAC and decisions made by majority vote may not be in the best interests of Alumina Limited and (f) the other risk factors summarised in Alumina Limited's Annual Report 2023. In addition, with respect to the Transaction, relevant factors may include, among others: (1) the risk that the Transaction may not be completed in a timely manner or at all, (2) the failure to receive, on a timely basis or otherwise, the required approvals of the Transaction by Alcoa stockholders or Alumina shareholders or the required approval of the scheme of arrangement by the Australian court, (3) the possibility that any or all of the various conditions to the consummation of the Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (4) the possibility that competing offers or acquisition proposals for Alumina or Alcoa will be made, (5) the occurrence of any event, change or other circumstance that could give rise to the termination of the SID, including in circumstances which would require Alcoa to pay a termination fee, (6) the effect of the announcement or pendency of the Transaction on Alumina's operating results and business generally, (7) risks related to diverting management's attention from Alumina's ongoing business operations, (8) the risk of litigation in connection with the Transaction, including resulting expense or delay, and (9) those risks discussed in the documents that Alumina files with the ASX. Readers should not place undue reliance on forward-looking statements. Forward-looking statements are based on management's current expectations and reflect Alumina's good faith assumptions, judgements, estimates and other information available as at the date of this communication. Except as required by law, Alumina Limited disclaims any responsibility to update or revise any forward-looking statements to reflect any new information or any change in the events, conditions or circumstances on which a statement is based or to which it relates.
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