Aluminium rolling and recycling firm Novelis Inc, which is a wholly owned subsidiary of Hindalco Industries Ltd, has agreed to sell a 50% stake in its facility in Ulsan, South Korea to Japanese steel manufacturer Kobe Steel for $315 million (around Rs 2,033 crore).
The deal is part of an agreement to form a joint venture with the Japanese firm in South Korea, the firm said in a stock exchange disclosure.
The proceeds from the sale will help Novelis reduce debt which stood at $4.2 billion at the end of FY2016-17.
The partnership with Kobe Steel will also help the firm enhance operational efficiencies and processes, it said.
The deal is expected to close in September 2017.
“We identify business opportunities that allow us to deliver maximum value across our global operations and continue to see Asia as a strategic market,” said Steve Fisher, president and chief executive officer of Novelis.
Built in 1969, the facility in Ulsan is involved in aluminium rolling, finishing and recycling. Recently, it added a three-stand hot finishing mill in addition to furnaces. The facility employs around 600 people.
The US-based Novelis was acquired by Hindalco, which is the metals flagship firm of the Aditya Birla Group, in 2007.
The firm posted revenues of $9.6 billion and net income of $45 million in FY2016-17. It has operations in 10 countries.
Like this report? Sign up for our daily newsletter to get our top reports.