Your picture hangs in my memory
Your smile etched in my mind
Your voice is in my melody
Your eyes makes me go wild
Loving you is like being in a nursery
Full of naughty little children
Playing with toys and teddies and being merry
And games they play which they always win
I write this short verse
To dedicate our love
And let it be better or worse,
There'll be no end to my love.
Saturday, February 24, 2007
Hindalco's acquisition of Novelis
The Money Trail
Payoff : $ 6 billion for $ 8.5 billion revenue (2005) and $ 2.4 billion debts, $ 170 million (3Q2006) loss company.
Offer : $ 44.93/share against $ 38.54 traded at NYSE. (17% premium)
Fund distribution:
Debt : $ 2.4 billion
$ 450 million - Hindalco
$ 300 million - SL Iron Ore Mining
SPVs (Special Purpose Vehicles)
AV Metals, Canada - Recourse Finance
Another - Non - recourse Finance
Fund Raisers:
ABN Amro Bank, UBS and Bank of America
Legal advisor:
Torys of Canada.
Financial Advisor for Novelis:
Morgan Stanley.
Prjoected Turnover for Hindalco : $11.8 Billion (2007-2008)
Birla's Sun rises, Hindalco Humongous - Globally
The Experience of expansion
In 2003, Hindalco became a majority stake holder in Utkal Alumina, its joint venture with Alcan to develop alumina mines. In 2006, the company acquired the rolling mill (30,000 tpa) and wire rod facilities (14,400 tonnes) of Pennar Aluminium, from the Asset Reconstruction Company.
Seal the Deal
Architects: Debu Bhattacharya (Head, Reatail Ventures, ex-CFO, group)
Sunirmal Talukdar (CFO, Hindalco)
Muthu Kumar, Sashi Maudgal, Sachin Satporte, S Roy, KG Lokve and A Mathew.
The old horses: The old organization stays, it rooted for Hindalco against others competitors.
Final Stamping: 66.66% shareholders(widely held by hedge funds and banks) should accept, others will be squeezed out.
Novelis Negotiates
Novelis is the world's largest flat-rolled aluminium products company. It has clients like coke and Jaguar(car sheets). Holding 19% of market-share, the $8.5 billion company ran out of steam probably due to the fixed-rate contracts (going up to 2011). It recorded losses in tune to $170 million in the 3Q of 2006(calendar year). Also, the debts of the company had risen to $2.5 billion. Therefore it needed a holder which could compensate for the debts. The company respected the Indian companies and the employees rooted for Hindalco amongst other sealed bids received.
Road Ahead
Payoff : $ 6 billion for $ 8.5 billion revenue (2005) and $ 2.4 billion debts, $ 170 million (3Q2006) loss company.
Offer : $ 44.93/share against $ 38.54 traded at NYSE. (17% premium)
Fund distribution:
Debt : $ 2.4 billion
$ 450 million - Hindalco
$ 300 million - SL Iron Ore Mining
SPVs (Special Purpose Vehicles)
AV Metals, Canada - Recourse Finance
Another - Non - recourse Finance
Fund Raisers:
ABN Amro Bank, UBS and Bank of America
Legal advisor:
Torys of Canada.
Financial Advisor for Novelis:
Morgan Stanley.
Prjoected Turnover for Hindalco : $11.8 Billion (2007-2008)
Birla's Sun rises, Hindalco Humongous - Globally
- AV Birla at the threshold of the Fortune 500 list three years ahead of target. (DNA Money, July 2005)
- Hindalco Rank 5 as an integrated Aluminium unit.
- Hindalco Rank 1 in flat rolled aluminium maker.
- Double's Hindalco's turnover.
- 20% of workforce outside India for Hindalco.
- Birla group reaches 1 Lack after 12,500 employees come in.
- Novelis - Bauxite reserves aren't there, therefore forcing it to buy Alumina from spot markets.
- High end technology ( cans, car sheets ) will be available to Hindalco.
- Downstream company (Novelis) allows Hindalco (lowest cost aluminium producer) to be resistant against price fluctuations.
- Flat rolled products - 19% share, FRP = 40% of Aluminium market.
The Experience of expansion
In 2003, Hindalco became a majority stake holder in Utkal Alumina, its joint venture with Alcan to develop alumina mines. In 2006, the company acquired the rolling mill (30,000 tpa) and wire rod facilities (14,400 tonnes) of Pennar Aluminium, from the Asset Reconstruction Company.
Seal the Deal
Architects: Debu Bhattacharya (Head, Reatail Ventures, ex-CFO, group)
Sunirmal Talukdar (CFO, Hindalco)
Muthu Kumar, Sashi Maudgal, Sachin Satporte, S Roy, KG Lokve and A Mathew.
The old horses: The old organization stays, it rooted for Hindalco against others competitors.
Final Stamping: 66.66% shareholders(widely held by hedge funds and banks) should accept, others will be squeezed out.
Novelis Negotiates
Novelis is the world's largest flat-rolled aluminium products company. It has clients like coke and Jaguar(car sheets). Holding 19% of market-share, the $8.5 billion company ran out of steam probably due to the fixed-rate contracts (going up to 2011). It recorded losses in tune to $170 million in the 3Q of 2006(calendar year). Also, the debts of the company had risen to $2.5 billion. Therefore it needed a holder which could compensate for the debts. The company respected the Indian companies and the employees rooted for Hindalco amongst other sealed bids received.
Road Ahead
- Firstly, the shareholders' approval.
- The debt ratio of Birla group will rise from 0.2-0.3 to a higher ration.
- Increase profitability of Novelis.
- Despite the fact that Novelis has fixed - price contracts with companies till 2011.
- Ensure that the new holding doesn't hit other greenfield expansions.
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