Sterlite Industries has lined up bank support worth an impressive Rs 110 crore to back its open offer for 20 per cent stake in Indian Aluminium. Sterlite has landed bank guarantees from the Bank of Nova Scotia, the Banque Nationale de Paris and the ABN Amro Bank, as well as a Rs 25 crore term deposit from the Bank of Nova Scotia. The guarantees and term deposit will be routed through Enam Financial "" the merchant bankers to Sterlites offer.
In an attempt to allay fears that its bid is largely hostile, Sterlite has emphasised that it does not plan to revamp Indals existing business or liquidate any of the companys significant assets. Some observers feel that Sterlite might also hike its offer price from Rs 115 a share, following Canadian rival Alcans move to raise its offer to Rs 120 per share.
Sources in the investment institutions, UTI and LIC, reveal that the FIs might consider selling their stake in Indal to the highest bidder, either Sterlite or Alcan.
The FIs have apparently decided that both managements are equally competent and able to protect stakeholder interest.