CANADIAN PRIVATE PLACEMENT MEMORANDUM
% Senior Notes due 2015
This Canadian Private Placement Memorandum constitutes an offering of the securities described
herein only in those jurisdictions and to those persons where and to whom they may be lawfully offered
for sale, and therein only by persons permitted to sell such securities. This Canadian Private
Placement Memorandum is not, and under no circumstances is to be construed as, an advertisement or
a public offering of the securities described herein in Canada or elsewhere. No securities commission
or similar authority in Canada has reviewed or in any way passed upon this document or the merits of
the securities described herein, and any representation to the contrary is an offence.
The securities being offered hereby are part of an offering (the "Offering") of % senior notes
due 2015 (the "Notes") of Novelis Inc., a corporation incorporated under the laws of Canada (the
"Corporation"). The Corporation intends to offer the Notes through each of Citigroup Global Markets
Inc. ("Citigroup"), Morgan Stanley & Co. Incorporated ("Morgan Stanley"), UBS Securities LLC
("UBS"), J.P. Morgan Securities Inc., RBC Capital Markets Corporation, ABN AMRO Incorporated
("ABN AMRO"), BNP Paribas Securities Corp. ("BNP"), CIBC World Markets Corp., HSBC Securities
(USA) Inc. ("HSBC"), Mitsubishi Securities International plc., NatCity Investments, Inc., and SG
Americas Securities, LLC ("SG") (collectively, the "Initial Purchasers"). The Offering in Canada is being
made on a private placement basis solely in the Provinces of Ontario, Québec, Manitoba, Saskatchewan,
Alberta and British Columbia (the "Private Placement Provinces") through some of the Initial Purchasers
or their affiliates who are permitted under applicable securities laws or available exemptions therefrom to
offer and sell the Notes therein.
Included in this Canadian Private Placement Memorandum and forming a part hereof is the full
text of the United States offering memorandum (the "U.S. Offering Memorandum") regarding the
Offering being made in the United States pursuant to Rule 144A under the Securities Act, and outside the
United States pursuant to Regulation S under the Securities Act. Except as otherwise provided herein,
capitalized terms used in this document have the meanings assigned to them in the U.S. Offering
Memorandum. The Offering in the Private Placement Provinces is being made exclusively through this
Canadian Private Placement Memorandum and not through any advertisement of the Notes. No person
has been authorized to give any information or to make any representation other than those contained in
this Canadian Private Placement Memorandum and any decision to purchase Notes should be based solely
on the information contained in it. Investing in the Notes involves risks. Canadian investors should refer
to the heading "Risk Factors" in the U.S. Offering Memorandum for additional information. Canadian
investors should also refer to the heading “Notice to Investors” in the U.S. Offering Memorandum for a
description of certain restrictions on transfers of the Notes.
Relationship between the Corporation and the Initial Purchasers
Affiliates of the Initial Purchasers are each lenders under senior secured credit facilities,
entered into with the Corporation and certain of its subsidiaries, providing for aggregate loans of
up to U.S.$1.8 billion (the "Novelis Credit Facilities"). The Novelis Credit Facilities consist of a
U.S.$1.3 billion seven-year senior secured Term Loan B facility, all of which was borrowed
following the consummation of the separation from Alcan, and a U.S.$500 million five-year multi-
currency revolving credit facility. The Term Loan B facility consists of an U.S.$825 million U.S.
Term Loan B to the Corporation's primary U.S. subsidiary and a U.S.$475 million Canadian Term
Loan B to the Corporation. An affiliate of Citigroup acts as administrative agent and collateral
agent and affiliates of Morgan Stanley and UBS act as co-syndication agents under the Novelis
Credit Facilities. The obligations under the Novelis Credit Facilities are secured by all the assets of
the Corporation and the assets of certain of its subsidiaries.
The Corporation is currently in compliance with the terms of the Novelis Credit Facilities
and no breach thereof has been waived by any of the affiliates of Citigroup, Morgan Stanley or
Affiliates of Citigroup, Morgan Stanley and UBS are lenders under Alcan's U.S.$500
million six-month unsecured term loan facility (the "Alcan Six-Month Term Loan") entered into as
of December, 2004. Citigroup, Morgan Stanley and an affiliate of UBS act as Joint Arrangers and
Book Managers and an affiliate of Citigroup acts as Administrative Agent under the Alcan Six-
Month Term Loan. Pursuant to the terms of the Alcan Six-Month Term Loan, Alcan will use the
proceeds from the repayment of the Alcan Note (as defined in the U.S. Offering Memorandum; see
"Explanatory Information" and "Summary – The Formation of our Company and the
Reorganization Transactions" in the U.S. Offering Memorandum) to repay the Alcan Six-Month
Affiliates of UBS, ABN AMRO, BNP, SG and HSBC are lenders and act in other capacities
under Alcan's U.S.$500 million 18-month unsecured term loan facility (the "Alcan 18-Month Term
Loan") entered into as of July, 2004. Alcan intends to use the proceeds from the repayment of the
Alcan Note, after repaying the Alcan Six-Month Term Loan, to repay the Alcan 18-Month Term
Affiliates of Citigroup, Morgan Stanley and UBS act as lenders under Alcan's U.S.$3 billion
five-year unsecured revolving credit facility (the "Alcan Revolver") entered into as of March, 2004.
Affiliates of Citigroup act as Joint Lead Arranger and Co-Administrative Agent and an affiliate of
Morgan Stanley acts as Co-Syndication Agent for the Alcan Revolver.
Alcan is currently in compliance with the terms of the Alcan 18-Month Term Loan, the
Alcan Six-Month Term Loan and the Alcan Revolver and no breach thereof has been waived by
any of the relevant Initial Purchasers or their affiliates.
Pursuant to the foregoing, the Corporation may be considered a "connected issuer" with
each of the Initial Purchasers and their affiliates referred to above. For more information see
"Summary – The Formation of our Company and the Reorganization Transactions", "Use of
Proceeds" and "Plan of Distribution" in the U.S. Offering Memorandum.
The decision to distribute the Notes, including the determination of the terms of this
Offering, has been made through negotiations between the Corporation and the Initial Purchasers.
The affiliates of the Initial Purchasers were not involved in this decision or determination. The
Initial Purchasers will not receive any benefit in connection with this Offering other than as is
described in this Canadian Private Placement Memorandum.
Representation and Agreement by Purchasers
The Initial Purchasers reserve the right to reject all or part of any offer to purchase Notes for any
reason or to allocate to any purchaser less that all of the Notes for which it has subscribed. Confirmations
of the acceptance of offers to purchase the Notes will be sent to purchasers in Canada who have not
withdrawn their offers to purchase prior to the issuance of such confirmations.
Each purchaser who receives a purchase confirmation will, by the purchaser's receipt thereof, be
deemed to represent to the Corporation, the Initial Purchasers and the dealer from whom such purchase
confirmation is received:
(a) that such purchaser is entitled under applicable provincial securities laws to purchase the
Notes without the benefit of a prospectus qualified under those securities laws and, in the
case of purchasers in Private Placement Provinces other than Ontario, without the
services of a dealer registered pursuant to those securities laws;
(b) that such purchaser is basing its investment decision solely on the final version of this
Canadian Private Placement Memorandum and not on any other information concerning
the Corporation or the Offering;
(c) that such purchaser has reviewed and acknowledged the terms referred to below under
the heading "Resale Restrictions";
(d) if such purchaser is in the Province of Québec, that such purchaser is a "sophisticated
purchaser" within the meaning of Section 44 of the Securities Act (Québec), or is a
"sophisticated purchaser" within the meaning of Section 45 of the Securities Act
(Québec) purchasing for the portfolio of a person managed solely by it, or is purchasing
from a registered dealer with an unrestricted practice Notes with an aggregate acquisition
cost to the purchaser of at least Cdn.$150,000;
(e) if such purchaser is in the Province of Alberta, British Columbia, Saskatchewan or
Manitoba, that such purchaser is entitled to purchase the Notes without the benefit of a
prospectus qualified under the applicable securities legislation because it meets one or
more of the criteria for an "accredited investor" as defined in Multilateral Instrument 45-
(f) if such purchaser is in the Province of Ontario, that such purchaser is entitled to purchase
the Notes without the benefit of a prospectus qualified under Ontario securities legislation
because it meets one or more of the criteria for an "accredited investor" under Ontario
Securities Commission Rule 45-501 ("Rule 45-501") and is not an individual unless
purchasing from a fully registered dealer within the meaning of Section 204 of the
Regulation to the Securities Act (Ontario);
(g) that such purchaser is either purchasing Notes as principal for its own account, or is
deemed to be purchasing Notes as principal for its own account in accordance with the
applicable securities laws of the province in which such purchaser is resident, by virtue of
being either (i) a designated trust company; (ii) a designated insurance company; (iii) a
portfolio manager; or (iv) another entity similarly deemed by those laws to be purchasing
as principal for its own account when purchasing on behalf of other beneficial
(h) that such purchaser has read the representations required to be made by all purchasers of
the Notes contained under the heading "Notice to Investors" in the U.S. Offering
Memorandum and has, in receiving a purchase confirmation, made such representations.
By purchasing these Notes, the purchaser acknowledges that its name and other specified
information, including the number of securities it has purchased, may be disclosed to Canadian securities
regulatory authorities and become available to the public in accordance with the requirements of
applicable securities laws. The purchaser consents to the disclosure of such information.
Each purchaser of Notes in Canada hereby agrees that it is the purchaser's express wish that all
documents evidencing or relating in any way to the sale of the Notes be drafted in the English language
only. Chaque acheteur au Canada des obligations reconnaît que c'est sa volonté expresse que tous les
documents faisant foi ou se rapportant de quelque manière à la vente des valeurs mobilières soient
rédigés uniquement en anglais.
Distribution and Resale Restrictions
The distribution of Notes in the Private Placement Provinces is being made on a private
placement basis and is exempt from the requirement that the Corporation prepare and file a prospectus
with the relevant Canadian securities regulatory authorities. Pursuant to a Registration Rights Agreement
to be entered into between the Corporation and the Initial Purchasers upon completion of the offering, the
Corporation will be obligated to file an exchange offer registration statement or, in certain circumstances,
a shelf registration statement with the U.S. Securities and Exchange Commission to (i) complete an
exchange offer pursuant to which notes (the "Exchange Notes") substantially identical to the Notes issued
under this Canadian Private Placement Memorandum and evidencing the same continuing indebtedness as
the Notes would be offered for the then-outstanding Notes tendered at the option of the holders thereof or
(ii) to allow for the resale of the existing Notes in the United States. The exchange offer will only qualify
the Exchange Notes for resale in the United States (see "Exchange Offer; Registration Rights" contained
in the U.S. Offering Memorandum for a description of the Exchange Notes and the circumstances in
which the Notes may be exchanged for Exchange Notes). Any distribution in Canada of Exchange Notes
will also be effected pursuant to exemptions from the registration and prospectus requirements of
applicable securities laws. Any resale of Notes, and if applicable, the Exchange Notes in Canada must be
made in accordance with applicable securities laws, which vary depending on the province. The
Corporation is a "reporting issuer" in Canada and is a "qualifying issuer" under the meaning of applicable
Canadian securities legislation. As a result, the Notes will become freely tradable in the Private
Placement Provinces four months and one day after the date of issuance of the Notes provided the seller is
not a control person of the Corporation (and subject to certain other conditions and restrictions under
applicable securities legislation). The Exchange Notes will also be subject to a four month hold period
running from the date of the issuance of the Exchange Notes. Purchasers of Notes in the Private
Placement Provinces are advised that, notwithstanding anything else contained in this Canadian Private
Placement Memorandum, the Notes and the Exchange Notes will continue to be subject to resale
restrictions in the Private Placement Provinces even if the Corporation files with the United States
Securities and Exchange Commission (i) an exchange offer registration statement with respect to the
Corporation's offer to exchange the Notes for Exchange Notes or (ii) a shelf registration statement in
respect of the Notes. Purchasers of the Notes are advised to seek legal advice prior to any resale of the
Notes and, if applicable, the Exchange Notes.
Each Purchaser in Canada acknowledges that the certificate representing the Notes will contain a
legend reflecting the above described resale restrictions.
Canadian Federal Income Tax Considerations
The following is a summary of the principal Canadian federal income tax considerations
generally applicable to a purchaser of the Notes pursuant to this Offering who at all relevant times, for
purposes of the Income Tax Act (Canada) (the "Tax Act"), is or is deemed to be resident in Canada, deals
at arm's length with the Corporation, is not exempt from tax under Part I of the Tax Act, and holds the
Notes as capital property. Generally, the Notes will be considered capital property to a holder provided
that the holder does not hold the Notes in the course of carrying on business and has not acquired them in
an adventure in the nature of trade. Purchasers whose Notes do not otherwise qualify as capital property
may make, in certain circumstances, the irrevocable election under subsection 39(4) of the Tax Act to
have such Notes and every "Canadian security" (as defined in the Tax Act) owned by such holder in the
taxation year of the election, and in all subsequent years, deemed to be capital property. This summary
does not address the Canadian federal income tax considerations applicable to holders of the Notes that
are "financial institutions" as defined in the "mark-to-market" rules contained in the Tax Act.
This summary is based on the current provisions of the Tax Act and the regulations thereunder,
all specific proposals to amend the Tax Act and the regulations announced by or on behalf of the Minister
of Finance (Canada) prior to the date hereof and the published administrative practices of the Canada
Revenue Agency (the "CRA"). This summary does not otherwise take into account or anticipate any
changes in law, whether by judicial, governmental or legislative decision or action, nor does it take into
account provincial, territorial or foreign income tax considerations which may differ from the Canadian
federal income tax considerations described herein.
This summary is not exhaustive of all Canadian federal income tax considerations that may
be relevant to a particular holder of the Notes. This summary is not intended to be, and should not
be interpreted as, legal or tax advice to any particular holder of the Notes, and no representation
with respect to the income tax consequences to any particular holder is made. Accordingly,
prospective holders of the Notes should consult their own tax advisors with respect to their
A holder of the Notes that is a corporation, partnership, unit trust or a trust of which a corporation
or partnership is a beneficiary will be required to include in computing its income for a taxation year all
interest that accrues or is deemed to accrue to such holder on the Notes to the end of that taxation year or
that becomes receivable or is received by it before the end of that taxation year, to the extent that such
interest was not included in computing the holder's income for a preceding taxation year.
Any other holder of the Notes, including an individual, will be required to include in computing
its income for a taxation year all interest on the Notes that is received or receivable by such holder in that
year (depending on the method regularly followed by the holder in computing income) to the extent that
such interest was not included in computing the holder's income for a preceding taxation year.
Where a holder of Notes is required to include in income interest on the Notes accrued in respect
of the period prior to their date of acquisition, the holder will be entitled to a deduction in computing
income of an equivalent amount. The adjusted cost base to the holder of the Notes will be reduced by the
amount which is so deductible.
Any premium paid by the Corporation to a holder because of the exercise of the right to redeem a
Note before the maturity thereof will generally be deemed to be interest received at that time by the
holder to the extent that such premium can reasonably be considered to relate to, and does not exceed the
value at the time of redemption of, the interest that would have been paid or payable by the Corporation
on the Notes for a taxation year ending after the redemption.
On a disposition or a deemed disposition of a Note (including a redemption or purchase by the
Corporation, or a repayment at maturity), a holder will generally be required to include in computing its
income for the taxation year in which the disposition occurs all interest accrued or deemed to have
accrued on the Note from the date of the last interest payment to the date of disposition and that is not
payable until after that date, except to the extent that such interest has otherwise been included in the
holder's income for that year or a preceding taxation year.
In addition, the disposition or deemed disposition of a Note will generally result in a capital gain
(or a capital loss) equal to the amount by which the proceeds of disposition, net of any amount included in
the holder's income as interest and any reasonable costs of disposition, exceed (or are exceeded by) the
adjusted cost base of the Note to the holder immediately before the disposition. Generally, one-half of a
capital gain (a "taxable capital gain") realized by a holder in a taxation year must be included in
computing the holder's income in that taxation year, and one-half of a capital loss (an "allowable capital
loss") realized by a holder in a taxation year will be deducted against taxable capital gains realized by
such holder in the same taxation year. Any excess of allowable capital losses over taxable capital gains
may be carried back and deducted in any of the three preceding taxation years or forward to subsequent
taxation years and applied against taxable capital gains in those years in accordance with the detailed
rules contained in the Tax Act. Capital gains realized by an individual may give rise to liability for
alternative minimum tax.
Exchange of Notes
The exchange of Notes for Exchange Notes under the registered exchange offer described in
"Exchange Offer; Registration Rights" in the U.S. Offering Memorandum will not constitute a disposition
and will not give rise to a capital gain or a capital loss, as the Exchange Notes will be issued as evidence
of the same continuing indebtedness of the Corporation.
Additional Refundable Tax
A holder that is a "Canadian-controlled private corporation" (as defined in the Tax Act) may be
liable to pay an additional refundable tax of 6 2/3% on certain investment income, including interest and
taxable capital gains earned or realized in respect of the Notes.
The Notes are denominated in U.S. dollars. All amounts relating to the acquisition, holding or
disposition of the Notes must be converted into Canadian dollars based on the prevailing United States
dollar exchange rate at the relevant time for the purposes of the Tax Act and the regulations thereunder.
A holder may realize a capital gain or a capital loss by virtue of fluctuations in the Canadian/U.S. dollar
exchange rate. The amount of interest on the Notes required to be included in computing the holder's
income for a taxation year will also be affected by fluctuations in the Canadian/U.S. dollar exchange rate.
Provided that shares of the Corporation are listed on a prescribed stock exchange (which includes
the Toronto Stock Exchange) at such time, the Notes, when issued, will be "qualified investments" under
the Tax Act for a trust governed by a registered retirement savings plan, a registered retirement income
fund, a deferred profit sharing plan (other than a trust governed by a deferred profit sharing plan for
which any employer is the Corporation or a corporation which does not deal with the Corporation at arm's
length) or a registered education savings plan.
Rights of Action for Damages or Rescission
The Initial Purchasers may be located outside Canada and, as a result, it may not be possible for
Canadian purchasers to effect service of process within Canada upon such persons. All or a substantial
portion of the assets of such persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against such persons in Canada or to enforce a judgment obtained in
Canadian courts against such persons outside of Canada.
The Securities Act (Ontario) provides an Ontario purchaser with a statutory right of action for
damages or rescission against the issuer where an offering memorandum contains a misrepresentation. A
purchaser who purchases a security offered by the offering memorandum during the period of distribution
is deemed to have relied on such misrepresentation if it was a misrepresentation at the time of purchase.
The Securities Act, 1988 (Saskatchewan) (the "Saskatchewan Act") provides purchasers resident
in the province of Saskatchewan with certain statutory rights of action, including: (a) if the offering
memorandum or any amendment thereto contains a misrepresentation, which was a misrepresentation at
the time of purchase, (i) a right of action for damages or rescission against the issuer or a selling security
holder, (ii) a right of action for damages against every promoter and director of the issuer or the selling
security holder who was a promoter or director at the time the offering memorandum or any amendment
thereto was sent or delivered, and (iii) a right of action for damages against the dealer from whom the
securities were purchased; (b) a right of action for damages against any individual who makes a verbal
misrepresentation to such Saskatchewan purchaser prior to or contemporaneously with the purchase of
securities; (c) a right to void the agreement to purchase the securities and recover the purchase price if the
securities are sold in contravention of the Saskatchewan Act, the regulations under the Saskatchewan Act
or a decision of the Saskatchewan Securities Commission; and (d) a right of action for damages or
rescission if a copy of this notice, the attached offering memorandum or any amendment thereto was not
delivered to such purchaser before the securities were subscribed for. An action for damages must be
started by the earlier of (a) one year after the purchaser first had knowledge of the facts giving rise to the
action; or (b) six years after the date of the transaction that gave rise to the action. An action for
rescission must be commenced by 180 days after the date of the transaction that gave rise to the action.
Prospective Saskatchewan purchasers should refer to the applicable provisions of Saskatchewan securities
legislation and are advised to consult their own legal advisers as to which, or whether any, of such rights
or other rights may be available to them.
The foregoing summary is subject to the express provisions of the Securities Act (Ontario) and
The Securities Act, 1988 (Saskatchewan) and the rules and regulations thereunder and reference is made
thereto for the complete text of such provisions.
The rights discussed above are in addition to and without derogation from any other right
or remedy which purchasers may have at law and are intended to correspond to the provisions of
the relevant securities legislation and are subject to the defences contained therein.