Kumar Mangalam Birla-led Hindalco Industries, through its overseas arm Novelis Inc., has secured funding of over $2.275 billion from a consortium of more than 10 banks to buy Aleris for $2.6 billion.
Satish Pai, MD, Hindalco Industries, told The Hindu: “We have raised funds at Libor plus 175 basis points, which is very competitive in current market. The funding, led by Citi Bank, Standard Chartered, among others, was subscribed by over two times.”
A global leader in aluminium-rolled products, the company has tied up with banks to provide up to $775 million of an incremental term loan with a five-year maturity and up to a $1.5-billion short-term bridge loan with a one-year maturity.
The company expects to replace the bridge loan with permanent financing soon after closing the transaction, depending on the market conditions. Novelis had signed a definitive agreement to acquire Aleris Corporation in July and has a liquidity position of $1.7 billion.
The acquisition continues to progress as expected and process remains on track to close nine to 15 months from the date of announcement, as previously communicated, subject to customary closing conditions and regulatory approvals, said Novelis in its earnings release.
When asked about the progress of the deal, Mr. Pai said, “We are awaiting regulatory approvals from the U.S., the EU and China and we hope to close it by April 2019.”