Hindalco Industries rose 2.24% to Rs 178.05 after the company's subsidiary, Novelis Inc., sold the former Aleris plant in Duffel, Belgium to ALVANCE, the international aluminium business of the GFG Alliance.
Previously, the European Commission and Chinese State Administration for Market Regulation determined that Novelis' acquisition of Aleris, which closed earlier this year, could proceed on the condition that Novelis divest the Duffel plant to a third party that met certain buyer suitability requirements.
"Both regulators have now approved ALVANCE as a suitable buyer and have permitted the sale to be completed," the company said in a BSE filing made on Friday.
In November 2019, ALVANCE agreed to acquire the Duffel facility for 310 million euros. At closing on 30 September 2020, Novelis received 210 million euros in cash. The parties have agreed to a post-closing arbitration process regarding the payment of the remaining 100 million euros.
The Aleris acquisition provides a strong pro-forma financial profile for Novelis with many strategic benefits and continues to be value accretive, with the long term outlook in line with the original acquisition case.
Novelis, the world's largest recycler of aluminum, serves customers in the aerospace, automotive, beverage can and specialties industries throughout North America, Europe, Asia and South America.
Hindalco Industries, the metals flagship company of the Aditya Birla Group, is the world's largest aluminium rolling and recycling company, and a major copper player. It is also one of Asia's largest producers of primary aluminium.
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The company posted a standalone net loss of Rs 40 crore in Q1 June 2020 as against a net profit of Rs 23 crore in Q1 June 2019. Revenue from operations stood at Rs 7,420 crore in Q1 June 2020, declining 26% from Rs 10,055 crore in Q1 June 2019.
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