| Hindalco Industries, the flagship company of the Aditya Birla group, today said it would buy aluminium rolling and conductor rod assets of Hyderbad-based Pennar Aluminium Company (Palco) from the Asset Reconstruction Company (Arcil).
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| Hindalco informed the Bombay Stock Exchange that Arcil has accepted its offer for purchase of assets, which include aluminium rolling and conductor rod complex of Palco in Nagpur.
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| The facility in Nagpur has installed capacity of 30,000 tonne a year of aluminium-rolled products and 14,000 tonne a year of conductor rods.
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| While the facility for rolled products was installed in December 1993, that for conductor rods was installed in November 1994.
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| Though Hindalco spokesperson was tightlipped on the financial details, according to the Arcil website, the facility is worth between Rs 100 crore and Rs 300 crore.
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| The announcement has boosted the sentiment at the Hindalco counter. The stock rose 0.54 per cent to end the day at Rs 149.15 on the BSE today. The Palco scrip also went up, by 4.88 per cent, closing at Rs 7.09.
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| The Hindalco Industries acquisition will finally put an end to the saga of sale of Palco’s assets, which has witnessed many a twist and turn.
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| The Board for Industrial and Financial Reconstruction had declared Pennar Aluminium sick in April 1998. Within three years, five companies, including Hindalco, Sterlite and the Denmark-based Danmetal, expressed interest to acquire Palco.
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| A high-level technical and management team of the Danish major had even visited the company’s manufacturing facilities in Nagpur. The other two contenders were little known Raviraj Foils and Vatsa Music.
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| Later, in May 2004, the company’s major lenders — IDBI, ICICI Bank and State Bank of India — transferred its assets to Arcil. To everyone’s surprise, in October that year, it was the Kolkota-based Hindustan Seals that was ‘declared’ as the top bidder, which was even confirmed by the company chairman Basant Kumar Agarwal.
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Today’s announcement has finally put a full stop to an almost eight-year-long race.
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| Tapping captive potential
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Valuation of Pennar’s Nagpur facility at Rs 100-300 crore
The facility has installed capacity of 30,000 tonne a year of aluminium-rolled products and 14,000 tonne a year of conductor rods
Five companies, including Hindalco, Sterlite and the Denmark-based Danmetal, expressed interest to acquire Palco, after BIFR had declared the company sick in April ’98 |
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