Hindalco funded the first equity infusion through a debt raised via its wholly owned Netherlands-based subsidiary AV Minerals. The financing was structured with a built-in $250 million greenshoe option, which the company is now exercising, taking the total equity support to $1 billion, Pai said.

Hindalco to infuse upto $250 mn additional equity in Novelis, taking total infusion to $1 bn

Hindalco to Infuse Additional $250 Million in Novelis Amid Fire-Related Disruptions

Hindalco, a leading aluminum major, has announced an additional equity infusion of up to $250 million in its U.S.-based subsidiary Novelis, taking the total planned equity support to $1 billion. This move is aimed at addressing liquidity pressures arising from two consecutive fire incidents at the Oswego facility.

Total Equity Support Reaches $1 Billion

Hindalco to infuse up to $250 million in Novelis
Total planned equity support now stands at $1 billion
Additional investment to bridge liquidity pressures and support cost-to-serve requirements

The Oswego facility, a critical supplier for the North American automotive industry, has been affected by two consecutive fire incidents. The first incident is estimated to have a gross cash flow impact of $1.3–1.6 billion before insurance recoveries. Novelis expects to recover 70–80 percent of the losses through insurance, although the timing remains uncertain.

Insurance Recoveries and Restart Timeline

Novelis expects to recover 70–80 percent of the losses through insurance, with $50 million already received. The plant is expected to restart in June, with the hot mill being down but the cold mill and cash lines remaining operational.

Key Customers and Markets

Novelis serves the North American automotive industry, with key customers including Ford Motor Company, Toyota, Stellantis, Hyundai, BMW, Mercedes-Benz, Renault-Nissan, and Volvo.
The facility also serves the beverage can and specialty markets.

Quote from Satish Pai

"The positive story is that the mill will be restarting in June. We think that they (Novelis) should be okay with this one-time equity infusion of a billion dollars. The insurance discussion is going extremely well. We have already got $50 million. There are no negative surprises there and we think that we will be able to recover 70 to 80%," said Satish Pai, Managing Director of Hindalco.