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Sterlite to divest paper division

KOLKATA, SEPT. 26. After demerging its telecom business last year and as part of a strategy to focus completely on metal, Sterlite Industries has decided to divest its subsidiary, Sterlite Paper. "We are looking for buyers for our paper division located at Doswada near Surat as it is not in our core competency," Sterlite official, Narayan Raman, said.

The company had invested about Rs. 167 crores in the project during the past few years, but it was not yet commissioned though 85 per cent of the work had been completed, he said.

Asked whether they were negotiating with any prospective buyers, Mr. Raman said, "Even if we are negotiating, we will not be able to disclose it at present".

To emerge as a world-class player in the non-ferrous metals business, Sterlite Industries had last fiscal acquired public sector enterprise Bharat Aluminium Company (Balco) and Hindustan Zinc.

The group's business profile stood considerably enhanced with a presence in four non-ferrous metals, namely, copper, aluminium, zinc and lead and it must be said that there were few companies the world over with such diversified product portfolio in the non-ferrous metals and mining segment, Chairman, Anil Agarwal, said in the company's annual report. Its other subsidiaries include Monte Cello BV (Netherlands), which held 100 per cent stake in Thalanga Copper Mines Pty Ltd., and Copper Mines of Tasmania Pty Ltd.

The company said it had made substantial investments in the paper project and in Phase I had erected the 75,000 tonne paper machine. The report said that the company had decided to put on hold any fresh investment in the paper project and was exploring possibilities for strategic tie-up or disinvestments in favour of international paper major.

All the investments in the paper project were made through unsecured loans amounting to Rs. 166.69 crores. Sterlite Paper's operating loss last year stood at Rs. 19.71 lakhs while the accumulated losses stood at Rs. 1.25 crores.

PTI

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