Novelis Inc. plans to raise $750 million for its indirect wholly-owned subsidiary, Novelis Corporation, following the plans ‘already approved by!’ its board through the issuance of 6.875% senior notes due January 2030, an increase of $250 million from the previous offering size.
Novelis’s purpose in issuing bonds
Novelis expects to apply $738 million of the total proceeds to repay existing debt, with mission statements intended to help build cash reserves. This strategic step will give Novelis the financial headroom to devote resources towards ongoing investment and operational excellence.
Recent financials
For the September quarter of FY25, Novelis’ net income was $128 million compared to $157 million in the previous year, representing an 18% decline. On the other hand, sales were up 4.5% from what was reported over the same period last year. The net effect could be attributed to higher aluminium prices and a slight increase in the rolled flat products’ shipment, totalling 945 kilotonnes.
Ability to withstand challenges
Novelis President and Chief Executive Steve Fisher credited the company’s global geographical diversity for reaching record beverage packaging shipments in the face of disruptions, including an outage at its Sierre facility due to flooding. He drew attention to Novelis’ commitment to customers throughout the market’s adversity.
Strategic focus on growth
Devinder Ahuja of Novelis Inc. mentioned that the company is fully committed to maintaining a firm balance sheet while targeting growth investments. The bond issuance fits Novelis’ long-term strategies to suit changing market dynamics and cement its leadership in the aluminium industry.
Novelis Inc. strengthens financial position for future growth
With its $750 million bond issuance, Novelis Inc. is taking decisive steps to enhance its financial health and support future investments. The move reflects the company’s commitment to maintaining operational resilience while navigating market challenges. By prioritising debt repayment and fortifying its cash reserves, Novelis Inc. positions itself to drive sustainable growth in the aluminium industry. Coupled with its innovative solutions and global presence, the company continues building on its leadership, ensuring long-term value for stakeholders and customers. This strategic initiative underscores Novelis Inc.’s focus on adapting to dynamic market conditions and fostering innovation.
