Hindalco Wins Banks’ Consent to Change $982 Million Loan Terms

July 2 (Bloomberg) -- Hindalco Industries Ltd., India’s biggest aluminum producer, won approval from its banks to change the terms of a $982 million loan used to partly finance the acquisition of Novelis Inc. In 2007, Mumbai-based Hindalco borrowed 130 billion rupees ($2.7 billion) using its own assets as collateral and took a $2.8 billion loan against Novelis’s assets to fund the $6 billion acquisition. The loan won’t be contingent on group earnings, including those of Novelis, Chief Financial Officer Sunirmal Talukdar said today by phone. The conditions on the loans related to India earnings will be “eased,” he said, without elaborating. The company announced the approval in an earlier statement to the Bombay Stock Exchange. Tata Steel Ltd., India’s largest steelmaker, also changed the terms of its debt after the global economic crisis crimped demand and muted earnings at overseas units. Tata Steel won approval from lenders on May 30 to change the conditions of a $6 billion loan taken to buy U.K.-based Corus. Hindalco shares, which have declined 34 percent in the past year, fell as much as 0.6 percent to 83 rupees and traded at 83.25 rupees, down 0.3 percent, at 1:26 p.m. today in Mumbai. The key Sensitive Index fell 1.2 percent. Profit, including unit Novelis, fell to 4.85 billion rupees in the year ended March 31 from 23.9 billion rupees a year earlier, Hindalco said on June 30. The loan for which the terms are being altered is part of Hindalco’s rupee debt. Hindalco bought Novelis to gain a fifth of the so-called market for high-end aluminum that is used in beverage cans and construction, and get access to U.S. customers including Coca-Cola Co.