M Mitsubishi Materials to sell aluminium business to Apollo

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M Mitsubishi Materials to sell aluminium business to Apollo

TOKYO, Nov 25, Reuters -- Japan's Mitsubishi Materials Corp said it would sell its aluminium business, used for beverage cans and automotive parts, to the U.S. investment fund Apollo Global Management for an undisclosed sum.

Although the aluminium market is expected to grow globally, Mitsubishi Materials has decided to divest from its aluminium business because it is difficult to find synergies with other businesses like copper products for electric vehicles and cement, it said in a statement.

The company will book a 29 billion yen $251 million loss as a restructuring charge in the January-March quarter, but the loss has been discounted in its full-year earnings forecast earlier this month, it said.

Mitsubishi Materials said that its stake in Indonesia's copper smelter PT Smelting, a joint venture with PT Freeport Indonesia, will fall to 35% from 60.5% after an expansion of the smelter's processing capacity.

PT Smelting will expand its capacity by borrowing the funds needed for expansion work from PT Freeport and the loan will be converted to newly issued shares of PT Smelting upon completion of the expansion work, the Japanese company said.

The expansion is aimed at boosting the smelter's annual copper concentrate processing capacity by 30%, with an estimated expansion cost of $250 million and a target completion date at the end of December 2023.