Hindalco raises $1 bn for Novelis bridge loan

Despite the liquidity crunch and devolvement of its rights issue, Hindalco Industries, India’s largest aluminium maker, managed to raise a five-year loan of $1 billion at 315 basis points above the London Interbank Offered Rate (Libor) to refinance part of a $3 billion bridge loan to buy North American company Novelis. This is at a finer rate than 500 basis points above Libor at which some large Indian companies have borrowed. The company also raised Rs 5,000 crore ($1.1 billion) through its rights issue — the promoters and five underwriters subscribed to 50 and 40 per cent of the issue, respectively. A similar amount was raised from internal accruals, mainly treasury operations, to repay the rest of the bridge loan, for which the deadline was November 12. A company spokesperson declined to comment. Sources said the company is also exploring the possibility of raising another Rs 3,000 crore ($650 million) though a non-convertible debenture (NCD) with a coupon rate of 12 per cent. To attract institutional investors the company will offer call and put options of five years. --business standard