On 12 March 2024, Alumina Limited announced it had entered into a Scheme Implementation Deed (SID) with Alcoa Corporation for Alcoa to acquire 100% of Alumina’s fully paid ordinary shares via a scheme of arrangement. Recently, Alumina and Alcoa have signed an Amending Deed to modify the form of consideration for CITIC Group and the Depositary and Custodian of Alumina’s American Depositary Receipt Program.
The Amending Deed stipulates that CITIC, Alumina’s second largest shareholder, will receive part of its consideration in the form of Alcoa non-voting convertible series A preferred stock (New Alcoa Preferred Shares) instead of Alcoa CDIs. This adjustment is necessary to comply with the US Bank Holding Company Act of 1956, which restricts CITIC, owning banking assets in the US, from holding more than a 5% interest in any class of voting shares in a US public company.
If the Transaction proceeds, CITIC will receive Alcoa CDIs representing up to 4.5% of the total voting shares in Alcoa, with the remaining consideration provided in the form of New Alcoa Preferred Shares. The economic rights of the New Alcoa Preferred Shares are generally equivalent to those of the Alcoa CDIs, ensuring compliance with regulatory requirements while maintaining CITIC’s economic interests.
