SAN FRANCISCO, Oct 16 (Reuters) - Aluminum can maker Novelis Inc. (NVL.N: Quote, Profile, Research) said on Monday its lenders agreed to amend financial covenants and other provisions of its $1.8 billion credit agreement.
Effective on Monday, the covenants on minimum interest coverage, total leverage and fixed charge coverage ratios will be relaxed for the periods through the first quarter of 2008, the company said.
Novelis' request for financial covenant relief was in response to an increase in interest expense and a reduction in earnings before interest, taxes, depreciation and amortization due mostly to losses in connection with can sheet sales that are affected by contracted metal price ceilings. The other nonfinancial amendments will enable Novelis to improve its working capital management and access cash more efficiently in order to continue de-leveraging, the company said.
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