Alcoa Corporation Completed Sale of Gum Springs Facility

SEATTLE (Scrap Monster): Alcoa Corporation announced that it has completed the sale of Gum Springs Arkansas waste treatment facility to Veolia ES Technical Solutions (VTS). The parties had reached an agreement in early January this year.

In accordance with the agreement, Alcoa received $200 million in cash upon closing of the transaction on January 31^st, 2020. An additional escrowed $50 million will be paid further to satisfaction of certain post-closing conditions. Further to the transaction, Alcoa is expected to recognize a gain of approximately $175 million in the fir4st quarter of the current year. The transaction is likely to lift the company’s annual net income in 2020 by nearly $10 million, said company press release.

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The transaction is in line with the company’s earlier announced strategy to focus on its core business and generate $500 million- $1 billion in cash through sale of its non-core assets. The projected sales could lead to relative reduction of its balance sheet stress. It must be noted that the company had reported negative free cash flow of $114 million for FY19.

The 1,300-acre hazardous waste treatment business in Gum Springs, Arkansas was being operated by Elemental Environmental Solutions LLC (EES), a wholly-owned subsidiary of Alcoa.