Hindalco borrows $1-bn to refinance buyout loan

    
NEW DELHI: The country's top aluminium producer Hindalco, part of Aditya Birla group, on Friday said it has borrowed about 1 billion dollar from 11 foreign banks to help refinance a previous loan taken for the acquisition of Novelis in Canada last year.
    
The banks include ABN Amro, Barclays, Bank of America, Bank of Tokyo-Mitsubishi UFJ, Calyon, Citigroup, Deutsche Bank, Mizuho Financial, Sumitomo Mitsui, HSBC and RABO.
    
Hindalco had taken a bridge loan of 3.03 billion dollar for the acquisition of Novelis with a repayment deadline of November 12, 2008.
    
In a statement issued today, Hindalco said the loan would be paid back with the overseas borrowing of about 1 billion dollar, another one billion dollars yielded through a rights issue of its shares in October and the remainder have been arranged through internal accrual.
    
"It (global financial crisis) has resulted in severe credit contraction, lack of liquidity and an irrational widening of credit spreads. In times like this, raising funds for long term in current liquid markets was a testimony to Hindalco's strong credit... and ability to refinance the laon at such an effective rate," company's CFO S Talukdar said.
    
The aluminum major paid USD 6 billion for the North America-based Novelis last year to gain access to strong market for the metal, targeting buyers like Coca-Coal and Ford Motor.