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Hindalco’s US Subsidiary Novelis Inc Announces $500 Million Senior Unsecured Notes Offering

Updated on: Jan 9, 2025, 12:20 PM IST
Novelis announces $500 million senior notes offering for debt repayment as Q2 FY25 net income drops 18%, hit by Sierre flooding and higher costs.
Hindalco’s US Subsidiary Novelis Inc Announces $500 Million Senior Unsecured Notes Offering
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US-based Novelis Inc, a subsidiary of Hindalco Industries, announced on Wednesday, January 8, its plan to offer $500 million in senior unsecured notes due 2030 through a private offering. The offering is exempt from registration under the Securities Act of 1933.

The senior unsecured notes will be guaranteed by Novelis and certain subsidiaries. The company intends to use the proceeds to repay $491 million in outstanding borrowings under its revolving credit facility. Any remaining funds will be allocated for general corporate purposes.

The notes and their guarantees will not be registered under the Securities Act or state securities laws and will only be sold to qualified institutional buyers under Rule 144A or in offshore transactions under Regulation S.

Q2 Earnings Hit by Production Disruptions

Novelis reported an 18% decline in net income for the second quarter of FY25, impacted by production disruptions at its Sierre plant in Switzerland caused by massive flooding. For the quarter ended September 30, 2024, the company posted a net income of $128 million, down from $156 million in the same period last year.

The decline includes $61 million in charges related to the Sierre plant disruptions, along with higher restructuring and impairment costs and lower operating performance. These were partially offset by favourable changes in metal price lag and unrealized derivatives. Excluding special items, net income stood at $179 million, a slight 1% decrease year-on-year.

Adjusted EBITDA Reflects Marginal Drop

The company’s adjusted EBITDA was $462 million for Q2 FY25, reflecting a 5% year-on-year decrease. This was attributed to less favourable metal benefits from a rapid rise in aluminium scrap prices, an unfavourable product mix, and a $25 million impact from the Sierre flooding.

Despite these challenges, Novelis remains focused on strengthening its financial position through strategic debt management and operational adjustments.

Stock Performance 

On January 09, 2025, Hindalco Industries share price traded 0.62% higher at ₹590.25, while the BSE benchmark Sensex is down 446.59 points to 77,701.01. Hindalco Industries’ share price reached a 52-week high of ₹772 on October 03, 2024, and a 52-week low of ₹496.80 on February 13, 2024. As per BSE, the total traded volume for the stock stood at 0.99 lakh shares with a turnover of ₹5.86 crore.

 

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 9, 2025, 12:03 PM IST

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