Canadian aluminium major Alcan Inc has decided to exit Utkal Alumina International Ltd, its joint venture with Hindalco. It has a 45 per cent stake in the company with the remaining 55 per cent being held by the Aditya Birla group flagship Hindalco. The Birlas are likely to exercise the first right of refusal to buy out this 55 per cent. The project, which is yet to get off the ground, is being set up at a total investment of Rs 4,500 crore.
Jacynthe Cote, President and CEO, Alcan Bauxite and Alumina, said, “We have carefully weighed the opportunity and risk presented by the Utkal project and, given constraints within the governance structure that limit Alcan's ability to participate in key decisions, believe that we have acted in the best interests of all our stakeholders.” Alcan said it had already taken steps to go through the sale process and the entire process was expected to be completed within the April-June quarter.
“Alcan is committed to sustainable and profitable growth that maximises value for its shareholders. The company will keep a strong focus on growing and executing its pipeline of projects in bauxite-rich regions, which will leverage its world-leading alumina refining technology,” Cote added. The technology supply agreement between the two companies is likely to continue.
The project had been conceptualised in 1992 and was a three-way venture between Indian Aluminum and Alcan and Norsk Hydro. However, Norsk Hydro had exited the venture, and the Aditya Birla group acquired the majority shares in Indian Aluminium from Alcan and became a majority shareholder in the company.