Alcoa paying $85 million cash to settle with Bahrain's Alba
By Amena Bakr
DUBAI (Reuters) - Alcoa Inc (AA.N: Quote) will pay $85 million in cash and enter long-term raw material supply contracts with Aluminum Bahrain ALBH.BH (Alba) to settle the Bahraini firm's racketeering and fraud lawsuit against Alcoa, the companies said on Tuesday.
Alba had accused Alcoa in U.S. federal court of conspiring with a businessman to orchestrate bribes in Bahrain and to overcharge it for alumina, the crucial material used to make aluminum. Alba had sought damages in excess of $1 billion.
Alcoa admitted no liability in the settlement but still faces investigations by the U.S. Justice Department and the Securities Exchange Commission into the allegations.
Shares of Alcoa, which was due to issue its third-quarter financial results later on Tuesday, were three cents higher in early afternoon trading at $9.15 on the New York Stock Exchange.
Alba put the value of the contracts at $362 million. Alcoa declined to give a value, but said it expects them to be profitable.
"We are very happy with this settlement, this is great news for Alba and Bahrain," Alba Chairman Mahmood Hashim al-Kooheji, who is also chief executive of Bahrain's sovereign wealth fund Mumtalakat, said in an interview from Manama.
In a news release, Alcoa confirmed it had resolved the civil lawsuit with Alba that had been pending in the U.S. District Court for the Western District of Pennsylvania since 2008.
Alcoa agreed to make the cash payment to Alba of $85 million in two installments. The settlement amount is within the range Alcoa previously estimated as its reasonably possible losses, it said. Continued...