Hindalco-led Novelis to offer $500 Million senior notes towards debt

9 Jan 2025 , 10:20 AM

Novelis Inc, a subsidiary of Hindalco Industries, stated on Wednesday (January 8) that it intends to raise $500 Million in senior unsecured notes due 2030 in a private sale. The offering is exempt from registration under the Securities Act of 1933.

Novelis and several of its subsidiaries will guarantee the notes on a senior unsecured basis. The proceeds of the transaction will be used largely to repay $491 Million in outstanding borrowings under its revolving credit facility. Any residual cash will be used to general company purposes.

Novelis’ net income fell 18% in the second quarter due to production difficulties at its Sierre factory in Switzerland as a result of significant flooding. The company reported a net income of $128 Million for the three months ended September 30, a decrease of 18% from the same period last year.

The current period included $61 Million in charges related to production disruptions at Sierre, Switzerland, along with higher restructuring and impairment costs and lower operating performance, which were partially offset by a favorable change in metal price lag and unrealised derivatives compared to the previous year.

The company’s adjusted EBITDA stood at $462 Million, a decline of 5% from the second quarter of the previous year. This was mostly due to a less favorable metal benefit from a quick increase in aluminium scrap prices, an unfavourable product mix, and a $25-Million flood-related impact at Sierre.

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