Mumbai: Aditya Birla Group company Hindalco’s Novelis has raised $1.15 billion through a bond issuance in the US, the company said in a release on its website.
The bonds were raised by Novelis Inc.’s subsidiary Novelis Corp.
Novelis Inc. is a global manufacturer of rolled aluminum products and the world’s largest recycler of aluminum. Novelis supplies premium aluminum sheet and foil products to transportation, packaging, construction, industrial and consumer electronics markets throughout North America, Europe, Asia and South America.
Novelis is a subsidiary of Hindalco Industries Ltd, the flagship company of the Aditya Birla Group. Hindalco acquired Novelis for around $6 billion in 2007.
The funds were raised by issuance of bonds with a duration of eight years and an interest rate of 6.25%.
Novelis had hired investment banks Citi, Morgan Stanley, HSBC, Deutsche Bank, Barclays and Bank of America Merrill Lynch to manage the bond issuance.
“The book was opened on Monday in the US. The base offer size was $500 million, with an option to retain oversubscription. The final subscription stood at $1.15 billion. The book has been closed,” said a person who was aware of the developments, but did not want to be named.
There was good demand for the issuance with several US-based and other global institutional investors participating in the book, he added.
Novelis intends to use the net proceeds of the offering to retire its outstanding 8.375% bonds due in 2017.
The move to raise funds at Novelis comes on the heels of a major restructuring plan at the Aditya Birla group, which plans to merge Aditya Birla Nuvo Ltd (Nuvo) and Grasim Industries Ltd.
On 12 August, Mint reported that the Aditya Birla Group is merging two of its main companies, Nuvo and Grasim, both of which also serve as holding companies, in an attempt to create a stronger entity, and unlock shareholder value by spinning off and listing one of Nuvo’s subsidiaries, Aditya Birla Financial Services Ltd.