Alcoa Offers Details on Split, Investors Head for the Exit

Commodities & Metals

Published: June 29, 2016 1:17 pm

Last Updated: January 13, 2020 6:13 am

Alcoa Inc. (NYSE: AA) filed a Form 10 initial registration statement with the U.S. Securities and Exchange Commission (SEC) Wednesday morning that gave some details regarding the company’s plan to divide into two pieces. The plan was first announced in September of last year.

The filing on behalf of Alcoa Upstream Corp. said the separation will include a pro rata distribution of at least 80.1% of Alcoa Upstream stock in a tax-free manner to existing shareholders of Alcoa Inc. stock. At the time of the separation, Alcoa Upstream will be renamed Alcoa Corp. and will trade on the New York Stock Exchange with the existing AA ticker symbol.

The current Alcoa Inc. will change its name to Arconic Inc. and change its ticker symbol from AA to ARNC when the separation occurs. Arconic will own 19.9% of Alcoa Corp. stock following the separation.

Arconic is what Alcoa management calls the value-added part of the current business. It includes products for the aerospace and auto industries among its various businesses. Last September Alcoa said that the aerospace market accounts for about 40% of the pro-forma revenues for the value-add company and revenues from the automotive sector are expected to rise by 2.4-times to $1.8 billion by 2018.

Alcoa Corp.’s assets and liabilities include Alcoa Inc.’s bauxite, alumina, aluminum, cast products, and energy businesses, as well as a rolled products business consisting of Alcoa Inc.’s rolling mill operations in Warrick, Indiana, and its 25.1% interest in the Ma’aden Rolling Company in Saudi Arabia.

The separation has not done a whole lot to improve Alcoa’s share price. Shares closed at $9.59 on September 28, when the split was announced and closed at $9.33 on Tuesday night. In the early afternoon Wednesday the stock traded down about 3% at $9.05 after touching a low of $9.01 earlier in the day.

The Average American Has No Idea How Much Money You Can Make Today ^(Sponsor)

The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.

But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

¹https://www.fdic.gov/national-rates-and-rate-caps