Alcan (AL-T) shareholders have overwhelmingly approved their company’s plan to spin off its rolled-products businesses into an independent company named Novelis.
The Montreal-based aluminum giant says that 99.92% of it shareholders voted in favour of the deal that will beget the world’s biggest rolled aluminum products company, based on shipment volumes. Pro forma revenues in 2003 were US$6.2 billion. The company will be domiciled in Canada, with an executive office in Atlanta, Georgia, and 38 operations and 13,600 employees in 12 countries. The company will be headed by CEO Brian Sturgell.
“Alcan shareholders have identified the spin-off as a value-creating opportunity and have spoken strongly in its favour,” said Alcan’s CEO Travis Engen. “Receipt of shareholder approval is a major milestone toward the successful completion of the spin-off.”
The spin-off is aimed at meeting conditions imposed by U.S. and European regulators after Alcan’s takeover of Pechiney in 2003. Alcan expects to close the deal early next year, pending court approval.
The plan also calls for some Novelis to raise US$2.9 billion in debt primarily comprising a 7-year loan of about US$1.5 billion and 10-year bonds amounting to US$1.4 billion. The company also intends to ink a US$500-million 5-year revolving credit facility.
Novelis shares will trade on both the New York and Toronto stock exchanges.
Alcan says the spin-off will allow it to focus on growing its bauxite, alumina, packaging and engineered products businesses.
Meanwhile, the company is in the midst of advanced talks aimed at selling its ferroalloy division, Pechiney Electromtallurgie (PEM), to Spain’s Ferroatlantica. The two expect to iron out the details over the next two weeks.
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