Novelis solicits consents for 7¼% notes due 2015; ad hoc committee says company in default on notes

By Jennifer Chiou

New York, June 22 - Novelis Inc. announced the start of a consent solicitation for its 7¼% senior notes due 2015.

The Atlanta-based producer of aluminum rolled products is seeking consents to proposed amendments to the note indenture, including the extension of financial filing deadlines to Dec. 31, 2006, as well as a waiver of defaults.

Meanwhile, a newly organized ad hoc committee of 7¼% noteholders said it believes that the company is in default in light of its inability to remain current in the filing of public financial information as required under the indenture for the notes.

The committee members hold more than $500 million of the $1.4 billion securities.

"The ad hoc committee is interested in pursuing a constructive dialogue for the benefit of all concerned, but the committee believes that the terms of the consent solicitation are inadequate," J. Andrew Rahl, Jr. of Anderson Kill & Olick, counsel to the ad hoc committee, said in a news release.

"In addition to improved financial and other terms, the committee is also seeking greatly enhanced information regarding the company's financial position on a current unaudited basis until Novelis completes its financial restatement."

The solicitation ends at 5 p.m. ET on June 30.

As previously reported, Novelis has yet to file its 10-K for the year ended Dec. 31 with the Securities and Exchange Commission as well as its 10-Q for the quarter ended March 31.

Those who give consent will receive a consent fee of $15.00 for each $1,000 in principal amount of notes.

Also, if Novelis has not filed its 10-K for the year ended Dec. 31 by 5:30 p.m. ET on Sept. 30, the company will pay an additional $5.00 for each $1,000.00 in principal amount of notes.

Novelis is looking to obtain consents from at least a majority of noteholders.

Citigroup Corporate and Investment Banking is the solicitation agent (800 558-3745 or call collect 212 723-6106). Global Bondholder Services Corp. is the information agent (866 794-2200 or call collect 212 430-3774).

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