Hindalco Net Up 10% To Rs 83.9 Cr

The Aditya Birla group company Hindalco Industries Ltd will complete the takeover of Indian Aluminium Company (Indal) next week.

The buyout will be complete after the sealing up of the Rs 738-crore component involving the acquisition of the 54.6 per cent stake of Canada's Alcan Aluminium Ltd at Rs 190 per share. Hindalco will also make an open offer for another 20 per cent of Indal shares at the same price. The offer opens Friday.

Indal chairman and chief executive officer Chris Bark-Jones said this at a press conference while announcing the financial results of the Indian aluminium major for 1999-2000. Yesterday was Indal's last board meeting with Alcan as its foreign parent. The company's net profit for 1999-2000 rose 10 per cent to Rs 83.9 crore from Rs 76.4 crore in the previous year. Income from operations stood at Rs 1049.7 crore against Rs 1021.60 crore in the previous year.

 

Stock markets, however, remained largely indifferent to the results, with the Indal stock barely moving at the bourses. At the Calcutta Stock Exchange, the stock opened at Rs 165, touched a high of Rs 167, dipped to Rs 165 again before closing at Rs 166.50.

Indal's cost-reduction programme, entailing primarily better management of power costs and negotiated reductions price reductions on key raw materials, yielded Rs 32 crore. This apart, the 19 per cent increase in pre-tax profits over the past year resulted from record production of alumina and aluminium and a recovery in pricing in most markets.

"We do not know whether the financial institutions will sell their stake in the company. But the management cannot influence the decision of any shareholder," Bark-Jones said.

But Alcan is willing to offer its technological support to Indal, which will have to be renewed at the year-end. "Alcan has given an open offer to provide technical support to Indal in raw materials and fabricated products. Now it depends on Hindalco to renew the agreement."

Significantly, Alcan will continue to have its stake in the greenfield one-million tpa joint venture, Utkal Alumina project, in Orissa. Now, Hindalco will participate in the project through Indal. At present, Indal holds 20 per cent, Alcan 35 per cent and Hydro 45 per cent in Utkal. The total acquisition cost will be Rs 1,152 crore.