The Kumar Mangalam Birla-led Hindalco Industries is likely to raise $500-million through a QIP or by other routes this fiscal to finance its expansion plans.
The company's board of directors has approved raising of additional finance by issue of securities in domestic or international markets, Hindalco's chief, Kumar Mangalam Birla, said at the company's annual general meeting on Friday.
Birla said that Hindalco has formulated a team of financial restructuring to deal with various costs associated with its organic and inorganic growth plans.
The recent economic downturn particularly in the commodities space, is expected to result in the impairment or diminution in value of certain assets and investments, he said.
Accordingly, Rs 8,647 crore (Rs 86.47 billion) has been transferred to business reconstruction reserve of which Rs 67 crore has been utilised in stand-alone account and Rs 4,616 crore (Rs 46.16 billion) in consolidated account, he said.
The company has been able to leverage the benefit of brownfield expansion and earlier inorganic acquisitions to tide over the macro-economic challenges in FY 09, Birla said.
On the company's greenfield projects, Birla said that the company was working on five such projects and the site work there had gained momentum.
"We are working on 5 greenfield sites in a difficult terrain and an uncertain regulatory environment. The site work in all greenfield projects has gained momentum," he said.
The company's expansion of its Hirakud smelter from 143 ktpa to 155 ktpa was completed on time and work on expansion to 206.6 ktpa using advanced technology along with a 100 MW power plant has already started--it will be commissioned in FY12, he said.
The construction of Utkal Alumina's 1.5 mtpa alumina refinery in Orissa is in full swing and production of alumina is expected to start around July 2011, he said.
Banks have been mandated for the financial closure of Utkal Alumina which is expected by October-November, he said. For Aditya Aluminium's project, an integrated aluminium project coming up in Orissa with a 1.5 mtpa alumina refinery, 3,59,000 tpa aluminium smelter and 900 MW captive power plant, major orders have been placed for both the smelter and power plant, he said.
The refinery should be mechanically completed by June 2013 as scheduled, he said.
On the company's Jharkhand aluminuium project, an aluminium smelter coming up with a capacity of 3,59,000 tpa
and 900 MW captive power plant, Birla said that the land acquisition process has already commenced.
The tubed coal-mine has been allotted for this project jointly with Tata Power, he said. The first metal of this smelter is expected by June 2013, he said.
Commenting on the outlook for Hindalco, Birla said that the substantial increase in capacity, improved
cost-optimisation, higher productivity and strong fundamentals, augur well for the company in the years to come.
