Hindalco to buy majority stake in Utkal Alumina

CALCUTTA, JULY 20. Hindalco Industires, belonging to the Aditya Birla group plans to acquire 55 per cent stake in the Rs. 4,000 crore Utkal Alumina. The group at present holds 20 per cent through Indian Aluminium (Indal). Alcan of Canada held a combined 55 per cent stake in the project before Hindalco took over Indal. The remaining 45 per cent is controlled by Hydro.

Talking to The Hindu after the 62nd annual general meeting of the company here today, Indal managing director, Mr. S. K. Tamotia, said ``A decision in regard to acquisition is expected by September''.

Earlier, Mr. Askaran Agarwala, whole-time director of Hindalco and vice chairman of Indal said both Alcan and Hydro ``agreed to co-operate'' in raising the group's stake in Utkal Alumina. ``It was part of the agreement for acquisition of Alcan's stake in Indal. We are holding discussions with both the companies''.Though both Mr. Tamotia and Mr. Agarwala denied, sources claimed that the group was looking forward to acquire the entire 35 per cent stake of Alcan.

Replying to queries from shareholders, Mr. Agarwala said Hindalco had received shares worth 28.71 per cent in the 20 per cent public offer. Offers of less than 200 shares were accepted and cheques were being sent. The balance would be accepted in proportion.Till date Hindalco acquired 72.23 per cent stake in Indal. ``There is still a small percentage to be acquired''. The number of major shareholders reduced from 38 to 28.

Financial institutions such as LIC, GIC and UTI diluted their stakes substantially to 0.25 per cent, 2.06 per cent and 5.58 per cent respectively. FII holding stands at 3.71 per cent. Public shareholding net of institutions stands at 15.21 per cent.While the new management is yet to identify areas of synergy between Indal and Hindalco, Mr. Agarwala denied any move to shift Indal's head office to Mumbai.

Our Mumbai Correspondent reports:

Meanwhile Indal has announced a net profit of Rs. 25.57 crores for the quarter ended June 2000 against Rs. 17.53 crores in the corresponding period of the previous year. The company's net sales rose by 25 per cent to Rs. 274 crores (Rs. 218.6 crores). Other income amounted to Rs. 1.13 crores (Rs. 2.15 crores).

The company provided Rs. 9.17 crores (Rs. 8.69 crores) for interest, Rs. 15.26 crores (Rs. 13.31 crores) for depreciation, Rs. 1.69 crores (Rs. 1.72 crores) for compensation under VRS and Rs. 8 crores (Rs. 4.32 crores) for tax.