Alcoa to Sell Stake in Jamalco to Noble

Alcoa (NYSE: AA) and Noble Group Ltd (SGX: N21) today announced the signing of a definitive agreement that will result in Alcoa World Alumina and Chemicals (AWAC) selling 100 percent of its ownership stake in the Jamalco bauxite mining and alumina refining joint venture to Noble for $140 million. AWAC will continue as the managing operator for three years under a compensated service agreement and employees will remain employed by Jamalco.

The Jamalco joint venture is 55 percent owned by Alcoa Minerals of Jamaica (AMJ) and 45 percent owned by Clarendon Alumina Production Ltd. (CAP). AMJ is part of the AWAC joint venture, owned 60 percent by Alcoa and 40 percent by Alumina Limited. CAP is a company wholly owned by the Government of Jamaica.

"The decision to sell AWAC's stake in Jamalco is in line with Alcoa's global strategy to reshape its upstream portfolio and lower the cost base of our commodity business," said Bob Wilt, President, Alcoa Global Primary Products. "The sale will help achieve those goals, while maintaining jobs and protecting the economic contributions of Jamalco to Jamaica."

Mark Hansen, Head of the Metals Division at Noble Group commented, "This transaction will provide Noble with an additional 778,800 metric tons of annual alumina off-take while the Jamaican government retains its 45 percent ownership of the joint venture. This is consistent with Noble's strategy to secure supply for customers while working with best in class operators such as Alcoa. Noble looks forward to partnering with the Government of Jamaica to continue to build on Jamalco's robust operating history, and implement an energy solution that will enhance the efficiency of the plant."

The sale is subject to customary regulatory approvals, and is expected to close by the end of the fourth quarter 2014. As a result of the transaction, Alcoa will record a non-cash loss of approximately $80 million to $100 million, or between $0.07 and $0.09 per share, after-tax and non-controlling interest in the fourth quarter. This sale is in line with Alcoa's strategy to create a globally competitive commodity business.

Goldman Sachs & Co. acted as an advisor to Noble Group on this transaction.
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