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Published on January 4, 2005
January 3, 2005
Ms. Pamela Ann Long,
Assistant Director,
Division of Corporation Finance,
Securities and Exchange Commission,
450 Fifth Street, NW,
Washington, DC 20549.
Re: Novelis Inc.
Registration Statement on Form 10
File No. 001-32312
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Dear Ms. Long:
On behalf of our client, Alcan Inc. ("Alcan"), and Novelis Inc. (the
"Company"), we would like to express sincere appreciation for the efforts made
by the staff of the Securities and Exchange Commission (the "Staff") over the
past several days in assisting the Company to meet its timetable for the
effectiveness of its registration statement on Form 10 (File No. 001-32312) (the
"Registration Statement"). We have reviewed with Alcan and the Company the text
of the comment letter from the Staff, dated January 3, 2005, relating to the
registration statement and have set forth below the Company's responses to the
comments. The Company anticipates filing via EDGAR Amendment No. 6 to the
Registration Statement (the "Amendment") early Tuesday morning, January 4, 2005.
That Amendment will reflect the Company's responses to the Staff's comments as
well as certain updating information and conforming changes.
Except as otherwise noted in this response letter, the information
provided in response to the Staff's comments has been supplied by the Company,
which is solely responsible for the adequacy and accuracy of the information as
well as the disclosure in the Registration Statement.
For ease of reference, we reproduce below the relevant comments, and
include under each comment the Company's response.
Ms. Pamela Ann Long
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA, PAGE 64
PRO FORMA BALANCE SHEET, PAGE 65
1. WE NOTE YOUR RESPONSE TO PRIOR COMMENT 5 AND YOUR DISCLOSURES IN
THE NOTE TO ADJUSTMENT (e). IT REMAINS UNCLEAR WHY THE INABILITY
OF THE GROUP TO REALIZE THE FULL TAX BENEFIT OF INTEREST
DEDUCTIBILITY IN CERTAIN JURISDICTIONS WOULD RESULT IN THE
EFFECTIVE TAX RATE BEING LESS THAN THE STATUTORY TAX RATE. PLEASE
CLARIFY YOUR DISCLOSURE.
In response to the Staff's comment, the Company has revised note (e) to clarify
that the inability of the Group to realize the full benefit of interest
deductibility in certain jurisdictions results in the effective tax benefit of
the pro forma adjustment for income tax expense (expressed as a percentage of
pre-tax income) being less than the statutory tax rate of 34%. Excerpts from the
Amendment reflecting this change are attached hereto.
MANAGEMENT'S DISCUSSION AND ANALYSIS
CONTRACTUAL OBLIGATIONS, PAGE 87
2. WE NOTE YOUR RESPONSE TO PRIOR COMMENT 9. PLEASE CONFIRM, AND
DISCLOSE, IF TRUE, THAT YOU HAVE ALSO INCLUDED ESTIMATED PAYMENTS
UNDER INTEREST RATE SWAP AGREEMENTS IN YOUR REVISED TABLE OF
CONTRACTUAL OBLIGATIONS.
The Company supplementally advises the Staff that estimated interest payments
under interest rate swap agreements amount to $469,000 for the period of less
than one year and nil in all subsequent periods. The interest rate swap
agreement, which terminated on April 9, 2004, fixed an interest rate of 7.50% on
$25 million of long-term debt. Because the estimated interest payments are
immaterial in each period, the Company has not included such estimated interest
payments in the table of contractual obligations.
AUDITOR'S REPORT, PAGE F-2
3. PLEASE NOTE THAT WE WILL NOT CLEAR THE FORM 10 UNTIL THE PREFACE
IS REMOVED AND THE AUDITORS' REPORT IS FINALIZED.
As noted on the attached excerpts from the Amendment, the preface to the
auditors' report will be removed in the Amendment and the auditors' report will
be finalized.
* * *
As mentioned, both Alcan and the Company are very appreciative of the
Staff's assistance in this matter. As you are aware, the Company has requested
that the Registration Statement be declared effective as early as practicable on
Tuesday, January
-2-
Ms. Pamela Ann Long
4, 2005. Mr. Tom Harrington, Vice President and Controller of Alcan, has
arranged to speak with Ms. Salik by telephone on Tuesday morning to discuss the
responses to the comment letter.
The Company will be submitting under separate cover the acknowledgments
requested by the Staff in the Staff's comment letter of January 3, 2005. If you
have any questions or comments concerning the matters discussed above, please
call me on (650) 461-5620 or Sarah P. Payne on (650) 461-5669.
Very truly yours,
/s/ Scott D. Miller
--------------------------
Scott D. Miller
cc: Nudrat Salik
Rufus Decker
Matt Franker
(Securities and Exchange Commission)
David McAusland
Roy Millington
Tom Harrington
(Alcan Inc.)
Brian W. Sturgell
Geoffrey P. Batt
Jo-Ann Longworth
(Novelis Inc.)
Norman M. Steinberg
Andrew Bleau
Niko Veilleux
(Ogilvy Renault)
Sarah P. Payne
(Sullivan & Cromwell LLP)
-3-
January 3, 2005
By Facsimile and EDGAR
Ms. Pamela Ann Long,
Securities and Exchange Commission,
450 Fifth Street, N.W.,
Washington, D.C. 20549.
Dear Ms. Long:
In connection with the Registration Statement on Form 10, File
No. 001-32312 of Novelis Inc. (the "Company"), the Company acknowledges that (1)
the Company is responsible for the adequacy and accuracy of the disclosure in
the filing, (2) U.S. Securities and Exchange Commission (the "Commission") Staff
comments or changes to disclosure in response to Staff comments do not foreclose
the Commission from taking any action with respect to the filing; and (3) the
Company may not assert Staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
Sincerely,
Novelis Inc.
By: /s/ Brian W. Sturgell
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Brian W. Sturgell
Chief Executive Officer