Hindalco may get delay foreign borrowing plan - Report

ET reported that after the recent devolvement of its rights issue on the underwriters, Hindalco Industries, the flagship of the Aditya Birla group faces the prospect of a delay in raising USD 1 billion through an overseas borrowing program. The overseas borrowing and the rights issue will be used to refinance the bridge loan taken for buying Novelis in 2007. According to sources close to the deal, a consortium of 11 bankers was appointed to arrange the USD 1 billion loan. The terms were scheduled to be finalized by October 13th. But the sudden downturn in global financial markets and debacle in the rights issue led to an extension of the deadline. Sources said that the lead bankers for arranging the 4 year loan syndication included ABN Amro Holding, Barclays Capital, Bank of America Corp, Bank of Tokyo Mitsubishi UFJ, Calyon, Citigroup, Deutsche Bank, Mizuho Financial and Sumitomo Mitsui. Some more banks are likely to join the syndication. The sources added that borrowing has been further delayed with some banks requesting for updates on the rights issue. The deal is now likely to be closed towards the middle of the next month, closer to the time when the company will have to draw down the loan. The pricing of the loan will be Libor plus 315 basis points. The 6 month Libor is 3.7%. An Aditya Birla group spokesperson declined to comment on the issue that given the silent period ahead of the second quarterly results. ---STEELGURU