Hindalco secures $982 million foreign loan

Hindalco has secured a $982 million foreign currency loan to clear a bridge loan that paid for Novelis in 2007.

MUMBAI (Reuters)  - 

Hindalco Industries Ltd, India's largest aluminium producer, has raised $982 million in a foreign currency loan and used it to clear the bridge loan taken for its 2007 acquisition of Canadian firm Novelis, a senior official said.

The five-year loan was raised at 315 basis points above the London Inter Bank Offered Rate (LIBOR), Chief Financial Officer S. Talukdar told Reuters on Friday.

The company had taken a $3.03 billion bridge loan at a rate of 80 basis points over LIBOR to fund the deal last year. The bridge loan was fully repaid on Thursday, Talukdar said.

"The financial markets have changed greatly. Right now a paper like this is trading at LIBOR plus at least 800 basis points, if not 1000," Talukdar said.

Hindalco had raised about 44 billion rupees ($920 million) through a rights issue last month, Talukdar said, although much of that had to be covered by the firm's founders and underwriters after falling stocks prices undermined investor interest.

The company also had about 53 billion rupees of funds from its treasury operations, he said. ($1=47.7 rupees) (Reporting by Janaki Krishnan; Editing by John Mair)

© Thomson Reuters 2008 All rights reserved

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