8-KRegulation FD

Howmet Aerospace Inc. 8-K Report, Regulation FD Disclosure (May 31, 2016)

Filed May 31, 2016For Securities:HWM

Summary

This 8-K filing from Alcoa Inc. (which later became Howmet Aerospace Inc.) on May 31, 2016, primarily discloses a legal action taken by the company. Alcoa has filed a complaint in the Delaware Court of Chancery against its joint venture partner, Alumina Limited, which holds a 40% stake in the Alcoa World Alumina and Chemicals (AWAC) entities where Alcoa holds 60%. The lawsuit seeks a declaratory judgment to prevent Alumina Limited from interfering with Alcoa's planned separation of its businesses. Alumina Limited has reportedly made demands and claimed rights under certain agreements, which Alcoa believes are without merit. The company is proceeding with its plan to split into two independent, publicly-traded companies: an "Upstream Company" (new Alcoa) focusing on bauxite, alumina, aluminum, etc., and a "Value-Add Company" (Arconic) for engineered products and solutions. The AWAC entities will be part of the Upstream Company post-separation.

Key Highlights

  • 1Alcoa Inc. filed a lawsuit against its joint venture partner, Alumina Limited, in the Delaware Court of Chancery.
  • 2The lawsuit seeks a declaratory judgment to prevent Alumina Limited from interfering with Alcoa's business separation plans.
  • 3Alumina Limited allegedly made baseless and improper demands to Alcoa regarding the separation.
  • 4Alcoa plans to separate into two independent, publicly-traded companies: a new Alcoa (Upstream Company) and Arconic (Value-Add Company).
  • 5The Alcoa World Alumina and Chemicals (AWAC) joint venture, where Alumina Limited owns 40% and Alcoa owns 60%, will be part of the new Alcoa (Upstream Company).
  • 6Alcoa believes Alumina Limited's claims regarding consent and other rights under agreements are without merit.
  • 7The company is asserting its right to proceed with the planned separation despite the partner's alleged threats.

Frequently Asked Questions

The primary reason for this filing is to inform investors that Alcoa Inc. has initiated legal action against its joint venture partner, Alumina Limited. Alcoa is seeking a court declaration to stop Alumina Limited from interfering with its planned separation of the company into two distinct entities.

Alumina Limited, a 40% partner in the AWAC joint venture, is reportedly threatening to interfere with Alcoa's planned business separation unless its demands are met. Alcoa believes these demands are baseless and that Alumina Limited's claims of rights under certain agreements are without merit.

Alcoa is proceeding with its plan to separate into an upstream business (new Alcoa) and a value-add business (Arconic), despite the dispute. The AWAC joint venture interests, which are at the center of the disagreement, will be part of the new Alcoa (Upstream Company) after the separation. The lawsuit aims to ensure this separation can proceed without partner obstruction.

Alcoa plans to split into two independent, publicly-traded companies. One will be the 'Upstream Company,' essentially the new Alcoa, which will include businesses like bauxite, alumina, aluminum, and energy. The other will be the 'Value-Add Company,' named Arconic, encompassing businesses such as Global Rolled Products and Engineered Products and Solutions.