MADRID – On Wednesday, Alcoa (NYSE: AA) said it was “progressing” toward a strategic cooperation agreement with Spanish renewable energy company Ignis to fund the operation of the U.S. metal producer’s aluminum plant in northwestern Spain.
Under the proposed deal, Alcoa would contribute 75 million euros ($81 million) and Ignis would make an initial investment of 25 million euros, giving it 25% ownership of the San Ciprian plant in the Galicia region, Alcoa said.
Pittsburgh, Pennsylvania-based Alcoa said it would fund up to another 100 million euros as needed while prioritizing future cash returns. Any additional funding would be shared under a 75%-25% split between Alcoa and Ignis, respectively.
The potential deal requires the approval of San Ciprian stakeholders, which include the Spanish government and regional authorities in Galicia.
Alcoa (NYSE: AA) has complained for years that steep energy prices in Spain had made its plant uncompetitive, which worsened when European power prices soared to record highs during the COVID-19 pandemic and the war in Ukraine.
Earlier this year, Alcoa started looking to sell 100% of the San Ciprian plant. It said that no viable bid was made despite sharing information with 60 potential investors.
($1 = 0.9207 euros)
(Source: Reuters)
Mary Lee is a freelance writer and journalist based in Toronto, Canada. She holds an M.S. degree in business and economic journalism from Columbia University’s Graduate School of Journalism in New York and a certificate in digital marketing from the University of Toronto.
