final-ppt-of-hindalco-novelis-1204234728778293-3

HINDALCO+NOVELISHINDALCO+NOVELIS

What’s the big deal?What’s the big deal?

20032003ALCANALCAN

WEDSWEDS

PECHINEYPECHINEY

WHAT’S IN THE PAST IS THE WHAT’S IN THE PAST IS THE PROLOGUE……PROLOGUE……

THE PROBLEM CHILDTHE PROBLEM CHILD

NOVELISNOVELIS

THE INHERITANCE OF LOSS THE INHERITANCE OF LOSS

Novelis inherited huge debtNovelis inherited huge debt Financial lossesFinancial losses High debt equity ratio of 7.23:1High debt equity ratio of 7.23:1 Chaos in financial reportingChaos in financial reporting Loss of credibilityLoss of credibility Constant restructuringConstant restructuring Search for CEOSearch for CEO

HINDALCO…HINDALCO…

Two strategic businesses-Al, CuTwo strategic businesses-Al, Cu Asia's largest integrated primary Asia's largest integrated primary

producer of aluminum and producer of aluminum and among the most cost-efficient among the most cost-efficient producers globally producers globally

Hindalco has operated at the Hindalco has operated at the lower end of the value chain lower end of the value chain

““Novelis is a global Novelis is a global leader with presence leader with presence in four continents. It is in four continents. It is very rare to be able to very rare to be able to acquire a global leader acquire a global leader in any industry.”in any industry.”

WHY NOVELIS?WHY NOVELIS?

Entry into new markets.Entry into new markets. 40% of Al consumed is in the form of 40% of Al consumed is in the form of

rolled products.rolled products. Will become 5th largest Al company in Will become 5th largest Al company in

the world.the world. Entry into list of Fortune 500 Co.Entry into list of Fortune 500 Co. Access to high technologyAccess to high technology Move up to the high end of the value Move up to the high end of the value

chainchain Access to new customer baseAccess to new customer base

Access to new set of customers…Access to new set of customers…

Coca-colaCoca-cola BudweiserBudweiser FordFord GMGM AudiAudi BMWBMW

THE BIG DEALTHE BIG DEAL

Divided into 2 parts- Divided into 2 parts- 1)100% of Novelis 1)100% of Novelis

equity @44.93$ per equity @44.93$ per share which add up share which add up to $3.6bto $3.6b

2)$2.4b debt on 2)$2.4b debt on Novelis balance sheetNovelis balance sheet

Confidential biddingConfidential bidding

Funding Funding

while $2.4 billion will be raised on the balance while $2.4 billion will be raised on the balance sheet of Novelissheet of Novelis

Hindalco will raise a debt of $2.8 billion.Hindalco will raise a debt of $2.8 billion. $450 million from its cash reserves $450 million from its cash reserves while Essel Mining, another A V Birla group while Essel Mining, another A V Birla group

company, will chip in with $300 million from its company, will chip in with $300 million from its reserves.reserves.

The group has tied up with ABN Amro Bank, The group has tied up with ABN Amro Bank, Bank of America and UBS for the Asian leg of Bank of America and UBS for the Asian leg of the transaction, while the non-recourse debt the transaction, while the non-recourse debt raised on Novelis' books will be funded raised on Novelis' books will be funded through ABN Amro and UBS.through ABN Amro and UBS.

Gains for Novelis….Gains for Novelis….

Good value for share holdersGood value for share holders Increase in credibility.Increase in credibility. Reduction in debt equity ratio.Reduction in debt equity ratio.

Value Addition….Value Addition….

SizeSize ScaleScale Cutting edge technologyCutting edge technology Explosive combinationExplosive combination

THE COMPETITIVE ADVANTAGETHE COMPETITIVE ADVANTAGE

Market Share.Market Share. Expanding it’s wings.Expanding it’s wings. Perfect Synergy.Perfect Synergy. The Fusion Technology.The Fusion Technology. Forward Integration.Forward Integration.

THE STORY THAT NUMBERS TELL……THE STORY THAT NUMBERS TELL……

JAN-JAN-SEPT SEPT 20062006

JAN-JAN-SEPT SEPT 20052005

FY2005FY2005 FY2004FY2004 FY2003FY2003

Net Net salessales

7,37777,3777 6,3376,337 8,3638,363 7,7557,755 6,2216,221

OperatiOperating ng expensexpenseses

7,2247,224 5,9385,938 7,9627,962 7,1457,145 5,7375,737

EBITDAEBITDA 153153 399399 401401 610610 484484

InteresInterestt

149149 148148 194194 4848 3333

Net Net IncomeIncome

-170-170 3232 9090 5555 157157

THE WORLD OF NOVELIS…..THE WORLD OF NOVELIS…..

N.AMERN.AMERICAICA

EUROPEEUROPE ASIAASIA S.AMERIS.AMERICACA

ASSETSASSETS 1,4871,487 2,39122,3912 1,0211,021 814814NET NET SALESSALES

2,8412,841 2,6882,688 1,2351,235 626626

REGIONAREGIONAL L INCOMEINCOME

6464 208208 7070 122122

DESCRIPDESCRIPTION OF TION OF ASSETSASSETS

10 PLANTS10 PLANTS

2 2 RECYCLING RECYCLING FACILITIESFACILITIES

14 PLANTS14 PLANTS

1 1 RECYCLING RECYCLING FACILITYFACILITY

3 PLANTS3 PLANTS 2 PLANTS2 PLANTS

2 SMELTERS2 SMELTERS

1 REFINERY1 REFINERY

2 BAUXITE 2 BAUXITE MINEMINE

NOW,IT’S TIME FOR SOME NOW,IT’S TIME FOR SOME CRYSTAL BALL GAZING…..CRYSTAL BALL GAZING…..

FUTURE PERFECT-POST 2010FUTURE PERFECT-POST 2010

Expiry of can contractsExpiry of can contracts Business integrationBusiness integration Sourcing of raw material from Sourcing of raw material from

Hindalco at low costHindalco at low cost Geographical proximity to Malaysian Geographical proximity to Malaysian

production facility of Novelis.production facility of Novelis. Expiry of Hindalco’s supply contracts.Expiry of Hindalco’s supply contracts.

THANK YOUTHANK YOU