Utkal Alumina To Finalise Advisors By August 25

The board of directors of Utkal Alumina International Ltd (UAIL), promoted jointly by Alcan, Norsk Hydro Aluminium of Norway, Alcan and Tata Industries, will appoint the financial and legal advisors for the Rs 4000 crore joint venture by August 25.

Following this crucial step, a number of decisions on the project will be expedited.

The details about the financing of the project to the extent of Rs 2400 crore will take a final shape after the appointment of the financial advisor. Lining up the financial arrangements for Utkal Alumina International Lt is now the most important issue before the board.

 

According to sources, UAIL will raise funds through the external commercial borrowing route, while the domestic financial institutions will also be tapped.

As per the planned debt-equity ratio at 60:40 per cent, the paid up equity of the joint venture would be Rs 1600 crore. This will be contributed by Nork 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.

The offtake of alumina from the project will be in proportion to the equity holding of the promoters.

UAIL 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.

The ministry of mines has granted the mining lease for UAIL. Nearly 90 per cent of the first phase of land acquisition for the project has been completed.

The board, which is meeting quite often now, is now being headed by a rotating chairman.

Eventually, UAIL will have one permanent chairman, to be elected by the board.

Utkal Alumina International Ltd 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 FIs deciding to offload their stake to Alcan.