HINDALCO+NOVELIS

Whats the big deal?

THE PROBLEM CHILD

NOVELIS

THE INHERITANCE OF LOSS

Novelis inherited huge debt Financial losses High debt equity ratio of 7.23:1 Chaos in financial reporting Loss of credibility Constant restructuring Search for CEO

HINDALCO
Two strategic businesses-Al, Cu Asia's largest integrated primary producer of aluminum and among the most cost-efficient producers globally Hindalco has operated at the lower end of the value chain

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.

WHY NOVELIS?

Entry into new markets. 40% of Al consumed is in the form of rolled products. Will become 5th largest Al company in the world. Entry into list of Fortune 500 Co. Access to high technology Move up to the high end of the value chain Access to new customer base

Access to new set of customers

Coca-cola Budweiser Ford GM Audi BMW

THE BIG DEAL

Divided into 2 parts 1)100% of Novelis equity @44.93$ per share which add up to $3.6b 2)$2.4b debt on Novelis balance sheet Confidential bidding

Funding

while $2.4 billion will be raised on the balance sheet of Novelis Hindalco will raise a debt of $2.8 billion. $450 million from its cash reserves while Essel Mining, another A V Birla group company, will chip in with $300 million from its reserves. 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.

Gains for Novelis.

Good value for share holders Increase in credibility. Reduction in debt equity ratio.

Value Addition.

Size Scale Cutting edge technology Explosive combination

THE COMPETITIVE ADVANTAGE

Market Share. Expanding its wings. Perfect Synergy. The Fusion Technology. Forward Integration.

THE STORY THAT NUMBERS TELL JAN-SEPT JAN2006 SEPT

FY2005

FY2004

FY2003

Net 7,3777 sales Operati 7,224 ng expense s EBITDA 153 Interest 149

2005 6,337 5,938

8,363 7,962

7,755 7,145

6,221 5,737

399
148

401
194

610
48

484
33

THE WORLD OF NOVELIS..

ASSETS NET SALES

N.AMERI EUROPE ASIA CA 1,487 2,3912 1,021 2,841 2,688 208

14 PLANTS 1 RECYCLING FACILITY

S.AMERI CA 814 626 122

2 PLANTS 2 SMELTERS 1 REFINERY 2 BAUXITE MINE

1,235 70
3 PLANTS

REGIONAL 64 INCOME DESCRIPT ION OF ASSETS

10 PLANTS 2 RECYCLING FACILITIES

FUTURE PERFECT-POST 2010

Expiry of can contracts Business integration Sourcing of raw material from Hindalco at low cost Geographical proximity to Malaysian production facility of Novelis. Expiry of Hindalcos supply contracts.

THANK YOU