Metals company Alcoa Inc said on Wednesday that its planned split will consist of a spinoff of its traditional upstream smelting business, and that up to 19.9 percent of the new company will be owned by its value-added business that serves the aerospace and automotive industries.

The company to be spun off will be named Alcoa Corp and the value-added business Arconic Inc, Alcoa said in a regulatory filing. The split is due to take place in the second half of this year.

The spinoff comes at a time when aluminum prices have hovered around historic lows. Many producers have accused China of selling metal into oversupplied global markets below market rates. China denies this and says excess capacity is a global issue.

Amid that downturn, Alcoa has been reducing its refining and smelting capacity and has focused on more advanced aerospace and automotive products.

In recent months the company has announced deals to provide a light but tough aluminum alloy for Ford Motor Co's high-selling F-150 pickup and aerospace contracts including titanium seat track assemblies for Boeing Co's 737 MAX, 777X and 787 Dreamliner.

Australia's Alumina Ltd has raised concerns over the impact of Alcoa's planned split on the pair's bauxite and alumina production joint venture, Alcoa Worldwide Alumina and Chemicals (AWAC).

In May, Alcoa filed a lawsuit seeking a declaration that Alumina has no right to block the plan.

In 2015, Alcoa's traditional upstream business had pro forma revenue of $11.2 billion, while its value-added business had revenue of $12.5 billion, the company said.

As part of the split, the new upstream business will have around $236 million in outstanding long-term debt. The new company will raise approximately $1 billion in new debt and provide for up to $1.5 billion in funding through a revolving credit facility.

Alcoa's total debt in the first quarter was around $9 billion, so the lion's share will remain with Arconic, the larger of the two companies post-split.

On a conference call with analysts, Alcoa chief executive Klaus Kleinfeld said the pension obligations of the new upstream business as of the end of 2015 will be around $2.6 billion, while the value-added business Arconic will have pension obligations of around $3 billion.

The company reiterated that Arconic will be an investment-grade entity, while the new Alcoa will be a "strong non-investment grade" firm.

In early trading, Alcoa shares were up 1.9 percent at $9.51.-Reuters