Novelis, a subsidiary of India's Hindalco Industries, announced the sale of two aluminum rolling and recycling plants in China for $265 million. The facilities, located in Zhenjiang and Changzhou, will be acquired by a consortium led by Luoyang Longding Aluminium.
The $265 million in proceeds directly reduces Hindalco's consolidated net debt, which stood at $4.7 billion in its most recent quarterly report. That represents a 5.6 percent reduction in leverage—material enough to improve debt service coverage ratios and lower annual interest expense in a regime where floating-rate borrowing costs remain elevated.
From a fixed-income lens, the sale strengthens Novelis's credit profile. Tighter leverage ratios can compress credit spreads on existing bonds and improve terms for future issuance. In a sustained high-rate environment where duration risk on liabilities has become acute, companies that actively delever gain negotiating power with creditors.
The divestment also reallocates capital toward core markets and advanced aluminum products. Hindalco said the transaction allows greater financial flexibility for organic growth and targeted acquisitions aligned with long-term profitability.
