Hindalco refinances $2 bn foreign currency loan

Hindalco Industries is re-financing its $2-billion foreign currency loan at a much higher rate, thanks to the rise in Libor rates.

The company had borrowed $3.03 billion last year to fund its $6-billion takeover of Canadian firm, Novelis. The funds were borrowed at the rate of Libor plus 125 basis points, but the refinancing is being done at a rate of Libor plus 300 bps.

���These rates are in line with the markets, but this was something we had taken into account,��� the official said. Apart from the $2 billion being refinanced from abroad, funds will come from Hindalco���s rights issue, which is scheduled for September.