Norsk Hydro Interested in Asia Aluminum-Report

NEW YORK, June 22 -- Norwegian aluminum producer Norsk Hydro ASA (NHY.OL) is interested in buying Asia Aluminum Holdings Ltd [ALMIN.UL], a deal that could help the unlisted Chinese company avoid bankruptcy and provide an exit for bondholders, The Wall Street Journal reported.

    The Saturday report cited a letter by a Norsk Hydro executive saying the company considered itself "uniquely placed to offer the business the strongest chance of survival."

    Norsk Hydro did not give an offer price but declared a "strong commitment" to look into a possible acquisition, the report said.

    The report comes amid a lengthy battle between Asia Aluminum, a maker of aluminum extrusions on mainland China, and its bondholders over $1.2 billion, which has proven to be a test case for China's new bankruptcy laws that went into effect in 2007.

    The company had offered to purchase debt from its senior bondholder, aiming to restructure its balance sheet after getting squeezed by the global financial crisis. Bondholders, mostly overseas investors, were sharply critical of that proposal, saying they would suffer significant losses while banks would get their dues back and shareholders would remain in control.

    (Source: Reuters)