Nov. 7 (Bloomberg) -- Hindalco Industries Ltd., India's largest aluminum producer, borrowed $982 million from a group of 11 international banks to refinance debt it raised for the purchase of Novelis Inc., two people involved in the deal said.

ABN Amro Holding NV, Barclays Capital, Bank of America Corp., Bank of Tokyo-Mitsubishi UFJ Ltd., Calyon, Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Rabobank Groep NV arranged the five-year loan, said the people, who declined to be identified because the information isn't public.

Mumbai-based Hindalco will pay interest of 2.65 percentage points more than the London interbank offered rate for the loan's first year, rising to 2.85 percentage points after that, the people said. Company spokeswoman Pragnya Ram hasn't replied to an e-mail seeking comment.

Hindalco paid $6 billion for Atlanta-based Novelis last year to gain a fifth of the high-end aluminum market and access to U.S. customers including Coca-Cola Co. It took on $2.4 billion of the U.S. company's debt and agreed to a $3.03 billion loan maturing next month to help finance the acquisition, data compiled by Bloomberg show.

Novelis, spun off from Alcan Inc. in 2005 to ease antitrust concerns, controls 19 percent of the world's flat-rolled aluminum products and supplies companies including Ford Motor Co., Eastman Kodak Co. and ThyssenKrupp AG, according to its Web site.

Hindalco's new loan was reduced from $1 billion after the global credit crisis curbed banks' appetite for corporate lending, the people said.

The company paid interest of 0.55 percentage point more than Libor for a $48 million, four-year loan in 2001 to refinance debt, Bloomberg data show.

To contact the reporter for this story: Patricia Kuo in Hong Kong at pkuo2@bloomberg.net.

Last Updated: November 7, 2008 02:33 EST