Press Trust of India / Mumbai Apr 06, 2009, 20:56 IST
Hindalco Industries today said its shareholders have approved the financial restructuring to use a portion of its reserves to write off expenses incurred by the company on international acquisition and domestic expansion.
In a filing to the Bombay Stock Exchange, the flagship company of the Aditya Birla Group said its shareholders have approved the arrangement.
As per the scheme, the balance lying in the Securities Premium Account would be transferred to the Business Reconstruction Reserve Account, which could also result in a reduction of capital.
The company had earlier said "the present global economic scenario had an adverse impact on its domestic and overseas operations which may result in impairment in value of its assets or investments".
The company had said that it would undertake the financial restructuring in a manner such that its operating results do not get impacted by such costs. In February, the board had approved the arrangement.
Shares of Hindalco closed at Rs 59.95, up 6.39 per cent on the BSE today.
This is just an accounting adjustment to make the financial results appear better than they are. The huge loans for the Novelis acquisition will still need to be repaid.
Subhankar(http://investmentsfordummieslikeme.blogspot.com)
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