Hindalco takes rights route to pay off loans | business | Hindustan Times
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Hindalco takes rights route to pay off loans

Hindalco Industries, a part of the Adity Birla group, is planning to raise Rs 5,000 crore through rights issue to repay loans taken to fund the acquisition of Novelis, reports HT Correspondent.

business Updated: Jun 20, 2008 22:46 IST
HT Correspondent

Hindalco Industries, a part of the Adity Birla group, is planning to raise Rs 5,000 crore through rights issue to repay loans taken to fund the acquisition of Novelis. The money raised from the rights issue will be used replace the bridge loan it took to partly finance the acquisition.

The repayment plan includes issuing of equity shares for an amount not exceeding Rs 5,000 crore. Hindalco, the largest aluminium producer in the country, had bought Toronto headquartered Novelis in May 2007 for Rs 26,958 crore ($6 billion) in an all cash transaction. This includes Rs 10,783 crore ($2.4 billion) of debt taken to buy aluminum sheet mills. The bridge loan has to be repaid at the end of 18 months that comes to an end on November 10.

“We evaluated many options but decided to take this financing route since we feel this is the best available option,” Sunirmal Talukdar, executive president and CFO, Hindalco told HT.

Shareholders will be offered one stock of Re 1 for every three held and this is the second stock sale to shareholders in the last three years by the company.

The company said its net income for the year 2008 declined 11 per cent to Rs 2,390 crore from Rs 2,690 crore a year earlier. Hindaco’s shares closed at Rs 161.2, down by 7 per cent from its opening.