Novelis, a wholly owned subsidiary of Hindalco IndustriesBSE 3.05 %, sold a 50% stake in its Ulsan, South Korea facility to Kobe Steel for $315 million (Rs 2,033 crore), creating an equally owned joint venture with the Japanese producer of aluminium roll.
The transaction is expected to close by September this year. The Ulsan plant employs around 600 people.
“We constantly identify business opportunities that allow us to deliver maximum value across our global operations and we continue to see Asia as a strategic market,” Steve Fisher, CEO of US-based Novelis, said in a news release.
The partnership is strategic as it will aid better utilisation of the Ulsan facility as well as help serve increasing demand for lightweight rolled aluminium products across Asia, which is emerging as a manufacturing hub for the global automobile industry. The transaction will help Novelis also reduce its net debt.
The Ulsan plant completed a major expansion recently, adding a new three-stand hot finishing mill as well as pusher and annealing furnaces. Novelis, which released fourth-quarter results on Wednesday, posted a net income of $47 million, compared with $29 million a year earlier, helped in part by lower interest expense brought about by long-term debt refinancing actions taken during fiscal 2017.
Source: Economic Times