The Hindu : Business : Indal to merge with Hindalco

Online edition of India's National Newspaper
Tuesday, Aug 24, 2004

Business

Business

Indal to merge with Hindalco

By Our Staff Correspondent

MUMBAI, AUG. 23. All the businesses of Indal with the exception of its foil plant at Kollur in Andhra Pradesh are to be demerged into Hindalco. The scheme of arrangement approved by the board of directors of both companies, entails Hindalco issuing and allotting shares to the shareholders of Indal in the ratio of one share of Rs. 10 each in Hindalco credited as fully paid up for every seven shares of Rs. 10 each held by the shareholder in Indal.

Indal shareholders will continue to hold their shares in Indal although the face value of those shares will be reduced from Rs. 10 per share to Rs. 2 per share. Hindalco will continue to maintain its 97 per cent stake in the resultant demerged Indal.

The Chairman of Aditya Birla group, Kumar Mangalam Birla, said, "Hindalco owns nearly 97 per cent equity in Indal. We would like to bring in maximum focus and harness all possible synergies to attain even higher levels of growth and enhance stakeholder value."

D. Bhattacharya, Managing Director, Hindalco, said that over the last four years, both Hindalco and Indal have worked in tandem and posted path-breaking results. All the capex plans pertaining to Indal, for which a sum of Rs. 2,000 crores has been earmarked, will be undertaken as planned under Hindalco. These include expansion of its metal capacity to one lakh tonnes annually, its power generating capacity to reach 267.5 MW at Hirakud, ramping up the alumina plant at Muri to 5 lakh tpa and enhancing the special alumina chemicals capacity to 1.27 lakh tonnes annually at Belgaum. The Utkal Alumina project in Orissa will also be transferred to Hindalco. Hindalco too has recently completed its brownfield expansion. Its aluminium metal capacity has gone up to 3.45 lakh tpa, alumina to 6.60 lakh tpa and copper smelter to 2.50 lakh tpa. The copper smelter capacity is being increased to 5 lakh tpa.

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