2003 ALCAN WEDS PECHINEY WHAT’S IN THE PAST IS THE PROLOGUE……
THE PROBLEM CHILD <ul><li>NOVELIS </li></ul>
HINDALCO+NOVELIS What’s the big deal?
THE INHERITANCE OF LOSS  <ul><li>Novelis inherited huge debt </li></ul><ul><li>Financial losses </li></ul><ul><li>High deb...
HINDALCO… <ul><li>Two strategic businesses-Al, Cu </li></ul><ul><li>Asia's largest integrated primary producer of aluminum...
<ul><li>“ Novelis is a global leader with presence in four continents. It is very rare to be able to acquire a global lead...
WHY NOVELIS? <ul><li>Entry into new markets. </li></ul><ul><li>40% of Al consumed is in the form of  rolled products. </li...
Access to new set of customers… <ul><li>Coca-cola </li></ul><ul><li>Budweiser </li></ul><ul><li>Ford </li></ul><ul><li>GM ...
THE BIG DEAL <ul><li>Divided into 2 parts-  </li></ul><ul><li>1)100% of Novelis equity @44.93$ per share which add up to  ...
Funding  <ul><li>while $2.4 billion will be raised on the balance sheet of Novelis </li></ul><ul><li>Hindalco will raise a...
Gains for Novelis…. <ul><li>Good value for share holders </li></ul><ul><li>Increase in credibility. </li></ul><ul><li>Redu...
Value Addition…. <ul><li>Size </li></ul><ul><li>Scale </li></ul><ul><li>Cutting edge technology </li></ul><ul><li>Explosiv...
THE COMPETITIVE ADVANTAGE <ul><li>Market Share. </li></ul><ul><li>Expanding it’s wings. </li></ul><ul><li>Perfect Synergy....
Comparative analysis 17.81 36 18.27 Market Cap/PBT 980 3,600 3,600 Market Cap 55.04 100 197 PBT 1,831.8 NA 8,363 Sales 1,3...
THE STORY THAT NUMBERS TELL…… 157 55 90 32 -170 Net Income 33 48 194 148 149 Interest 484 610 401 399 153 EBITDA 5,737 7,1...
THE WORLD OF NOVELIS….. 2 PLANTS 2 SMELTERS 1 REFINERY 2 BAUXITE MINE 3 PLANTS 14 PLANTS 1 RECYCLING FACILITY 10 PLANTS 2 ...
NOW,IT’S TIME FOR SOME CRYSTAL BALL GAZING…..
FUTURE PERFECT-POST 2010 <ul><li>Expiry of can contracts </li></ul><ul><li>Business integration </li></ul><ul><li>Sourcing...
THANK YOU
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  • Final Presentation

    1. 1. 2003 ALCAN WEDS PECHINEY WHAT’S IN THE PAST IS THE PROLOGUE……
    2. 2. THE PROBLEM CHILD <ul><li>NOVELIS </li></ul>
    3. 3. HINDALCO+NOVELIS What’s the big deal?
    4. 4. THE INHERITANCE OF LOSS <ul><li>Novelis inherited huge debt </li></ul><ul><li>Financial losses </li></ul><ul><li>High debt equity ratio of 7.23:1 </li></ul><ul><li>Chaos in financial reporting </li></ul><ul><li>Loss of credibility </li></ul><ul><li>Constant restructuring </li></ul><ul><li>Search for CEO </li></ul>
    5. 5. HINDALCO… <ul><li>Two strategic businesses-Al, Cu </li></ul><ul><li>Asia's largest integrated primary producer of aluminum </li></ul><ul><li>Among the most cost-efficient producers globally </li></ul><ul><li>Hindalco has operated at the lower end of the value chain </li></ul>
    6. 6. <ul><li>“ Novelis is a global leader with presence in four continents. It is very rare to be able to acquire a global leader in any industry.” </li></ul>
    7. 7. WHY NOVELIS? <ul><li>Entry into new markets. </li></ul><ul><li>40% of Al consumed is in the form of rolled products. </li></ul><ul><li>Will become 5th largest Al company in the world. </li></ul><ul><li>Entry into list of Fortune 500 Co. </li></ul><ul><li>Access to high technology </li></ul><ul><li>Move up to the high end of the value chain </li></ul><ul><li>Access to new customer base </li></ul>
    8. 8. Access to new set of customers… <ul><li>Coca-cola </li></ul><ul><li>Budweiser </li></ul><ul><li>Ford </li></ul><ul><li>GM </li></ul><ul><li>Audi </li></ul><ul><li>BMW </li></ul>
    9. 9. THE BIG DEAL <ul><li>Divided into 2 parts- </li></ul><ul><li>1)100% of Novelis equity @44.93$ per share which add up to $3.6b </li></ul><ul><li>2)$2.4b debt on Novelis balance sheet </li></ul><ul><li>Confidential bidding </li></ul>
    10. 10. Funding <ul><li>while $2.4 billion will be raised on the balance sheet of Novelis </li></ul><ul><li>Hindalco will raise a debt of $2.8 billion. </li></ul><ul><li>$450 million from its cash reserves </li></ul><ul><li>while Essel Mining, another A V Birla group company, will chip in with $300 million from its reserves. </li></ul><ul><li>The group has tied up with ABN Amro Bank, Bank of America and UBS for the Asian leg of the transaction, while the non-recourse debt raised on Novelis' books will be funded through ABN Amro and UBS. </li></ul>
    11. 11. Gains for Novelis…. <ul><li>Good value for share holders </li></ul><ul><li>Increase in credibility. </li></ul><ul><li>Reduction in debt equity ratio. </li></ul>
    12. 12. Value Addition…. <ul><li>Size </li></ul><ul><li>Scale </li></ul><ul><li>Cutting edge technology </li></ul><ul><li>Explosive combination </li></ul>
    13. 13. THE COMPETITIVE ADVANTAGE <ul><li>Market Share. </li></ul><ul><li>Expanding it’s wings. </li></ul><ul><li>Perfect Synergy. </li></ul><ul><li>The Fusion Technology. </li></ul><ul><li>Forward Integration. </li></ul>
    14. 14. Comparative analysis 17.81 36 18.27 Market Cap/PBT 980 3,600 3,600 Market Cap 55.04 100 197 PBT 1,831.8 NA 8,363 Sales 1,327.84 NA 5,476 Assets Corus Al 2005 actuals Novelis 2007 Novelis 2005 actuals
    15. 15. THE STORY THAT NUMBERS TELL…… 157 55 90 32 -170 Net Income 33 48 194 148 149 Interest 484 610 401 399 153 EBITDA 5,737 7,145 7,962 5,938 7,224 Operating expenses 6,221 7,755 8,363 6,337 7,3777 Net sales FY2003 FY2004 FY2005 JAN-SEPT 2005 JAN-SEPT 2006
    16. 16. THE WORLD OF NOVELIS….. 2 PLANTS 2 SMELTERS 1 REFINERY 2 BAUXITE MINE 3 PLANTS 14 PLANTS 1 RECYCLING FACILITY 10 PLANTS 2 RECYCLING FACILITIES DESCRIPTION OF ASSETS 122 70 208 64 REGIONAL INCOME 626 1,235 2,688 2,841 NET SALES 814 1,021 2,3912 1,487 ASSETS S.AMERICA ASIA EUROPE N.AMERICA
    17. 17. NOW,IT’S TIME FOR SOME CRYSTAL BALL GAZING…..
    18. 18. FUTURE PERFECT-POST 2010 <ul><li>Expiry of can contracts </li></ul><ul><li>Business integration </li></ul><ul><li>Sourcing of raw material from Hindalco at low cost </li></ul><ul><li>Geographical proximity to Malaysian production facility of Novelis. </li></ul><ul><li>Expiry of Hindalco’s supply contracts. </li></ul>
    19. 19. THANK YOU
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