Almost eight months after the Aditya Birla Group began negotiations to buy Ohio-based aluminium maker Aleris Corp., a definitive agreement is in sight. Adding a deal is likely to be signed in the next few weeks.
The talks have revived after the managements of Aleris and the Aditya Birla Group, represented by its North America subsidiary Novelis, reached an agreement over the extent of responsibility both sides will bear to pass the scrutiny of the Committee on Foreign Investment (CFI).
CFI, the US government body that reviews foreign investments in domestic firms and determines whether those potential investments impact national security.
Aleris makes rolled fabricated aluminium products and has 13 manufacturing facilities across North America, Europe and China. It caters to different sectors, including aerospace, automotive, defence, building and construction, transportation, packaging and consumer goods.
The company is owned by private equity funds Oaktree Capital Group LLC and Apollo Global Management LLC.
The structure of the deal is already laid out and funding to the tune of $2.6 billion has been tied up.The Aditya Birla group has incorporated a separate entity under its US-based subsidiary, Novelis Inc., which will act as the bidding company.
The bidding company will raise about $1.8 billion debt, while the rest will be raised by Novelis.
“The funding will include a term B loan, a loan facility with a portion carved out for non-banks.This is the second time in recent months that the Aditya Birla Group is evaluating the term B route to refinance its debt.
In January, Novelis had refinanced $1.8 billion of its term loans from Asian, Middle Eastern, European and US banks.
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