Mumbai: Aditya Birla group flagship Hindalco Industries has raised a foreign currency loan of $982 million (around Rs4,640 crore) to repay the bridge loan it had taken last year to part-fund its acquisition of Canadian aluminium major Novelis.
Hindalco had raised a $3.3 billion bridge loan through its special purpose vehicle, ABN Minerals Netherlands, in May last year, to part-finance the acquisition of Novelis.
A consortium of banks consisting ABN Amro, Bank of America and UBS had organised the 18-month bridge loan for the acquisition, which valued Novelis at around $6 billion.
The new five-year loan has an average cost of Libor plus 315 basis points (bps), ie, a little over 6.5 per cent. This makes it costlier than the original bridge loan, which was priced at Libor plus 30 bps for the first 12 months and Libor plus 80 bps for the rest of the tenure.
Hindalco had, early this week, mobilised Rs5,360 crore through treasury operations and another Rs4,425 crore through a rights issue even earlier.
The company has utilised these funds to replace the bridge loan on Thursday, just a week before its maturity.
Even though the new loan is expensive, it is still considered to be reasonable, considering the current marker conditions.
Moreover, the rights issue had an underwriting in the Indian capital market. And the issue devolved amidst falling commodity prices and a dull market.
Sources said the company was also exploring the possibility of raising another Rs3,000 crore ($650 million) though a non-convertible debenture (NCD) with a coupon rate of 12 per cent.