Novelis completes $4 bn fund raising

Hindalco's Canadian arm, Novelis has raised $4 bn by a mix of debt and bonds. Novelis raised $2.5 bn via two bonds. $1.4 bn raised through the issuance of 10-year bond at 8.75% and $1.1 bn via 7-year bond at 8.375%. Bonds launched on Friday, Dec 10 "received good response and was over-subscribed" sources said. The company also raised a 6-year term loan of $1.5 bn at the rate of 375 bps over Libor, the base rate for the Libor has been fixed at 150 bps minimum in this deal.

Novelis will give $1.7 bn to Hindalco as dividend and use the rest for re-financing the debt on it's books. Hindalco is left with $982 million of debt burden from the fund raised for Novelis acquisition. The aluminium major is expected to repay the debt from the dividend money which will de-leverage it's books for further expansion projects.

Novelis mandated five banks including RBS, UBS, Citigroup, JP Morgan and Bank of America Merrill Lynch for the fund raising project. Hindalco management was unavailabe for comments on the development.