Warburg Dillon Advisor For Utkal Project
Utkal Alumina International Ltd (UAIL), promoted jointly by Alcan, Norsk Hydro Aluminium of Norway, Indal and Tata Industries, will appoint Warburg Dillon Reed as the financial advisor and the Mumbai-based Amarchand Mangaldas Shroff as the legal advisor for the Rs 4000 crore joint venture project.
"These two firms will be appointed as financial and legal advisors, following which the financial arrangement will be tied up," said a top company source.
However, lining up funds for the project is so crucial before the board that the final decision on the appointment of the two firms will be taken shortly before the scheduled board meeting.
But UAIL will not offer its shares to the public before 2002, when the project will go on-stream. "Of course, it will depend on the revival of the capital market," the official said.
The details about the financing of the project to the extent of Rs 2,400 crore will be given a final shape by Warburg, after its formal appointment.
According to sources, Utkal Alumina International Ltd will raise funds through the external commercial borrowing route, while the domestic financial institutions will also be tapped. The financial closure of the project will take another nine to ten months.
As per the planned debt-equity ratio at 60:40 per cent, the paid up equity of the joint venture would be Rs 1,600 crore.
This will be contributed by Norsk Hydro to the extent of 40 per cent, while the other promoters' contribution will be 20 per cent each. However, Alcan's association with UAIL started only in March.
Utkal Alumina International Ltd is putting up its Rs 4000 crore 100 per cent export oriented alumina refinery in the Raygada district of Orissa.
With an annual production capacity of one million tonnes of alumina, it is expected to begin production by 2002.
Alcan and Aluswiss of Switzerland are the joint technology supplier for the project.
UAIL had faced some uncertainties in the recent past following the Sterlite Industries' bid for a controlling stake in Indal.
Alcan, with 34.6 per cent stake made a counter offer for acquiring up to 20 per cent of Indal's equity capital.
It was finally resolved with the financial institutions deciding to offload their stake to Alcan.