Mumbai: Aditya Birla group company Hindalco plans to issue rights shares in the ratio of one share for every three shares to raise up to Rs5,000 crore. The board of the company, which has approved the issue, said the date will be fixed later.
Part of the money raised will be used to fund Hindalco's acquisition of Canadian aluminium giant Novelis. Hindalco had taken a bridge loan last year to finance its $6 billion acquisition of Novelis.
The bridge loan of $3.03 billion has to be paid at the end of 18 months, ie, in November.
''To pay for the remainder of the bridge loan, we will be sourcing domestic debt, international debt and liquidation of treasury. We have not yet decided on which option,'' managing director Debu Bhattacharya said.
Hindalco also announced the consolidated results (including that of Novelis) for the year ended March 2008. The company's total revenue was up 211 per cent at Rs60,013 crore and the profit before interest and tax was up 22 per cent at Rs4,835 crore. Net profit was marginally lower at Rs2,387.30 crore (Rs2,685.80 crore) largely due to a massive interest component of Rs1,849 crore (Rs313.40 crore).
The number of Hindalco subsidiaries have gone up from 18 in 2006-07 to 57 in 2007-08, said Bhattacharya.
''By 2015, we will have global operations and would have ventured into high value products. Growth will come from a de-risked portfolio spanning multiple geographies, costs and revenues in different currencies and across the value chain,'' Bhattacharya said.
Hindalco Industries, the country's largest producer of primary aluminum, will use its Novelis acumen to increase its ''recycling capabilities,'' he said.
Demand for aluminium is expected to go up with increased consumption in the automotive sector. In North America, the light vehicle aluminium content would be 355 pounds per car by 2010 and it was estimated that 16 million cars would be sold annually in the US by then, Bhattacharya said.
However, he said, rising energy costs are bound to impact aluminium prices and demand as its production is highly energy intensive.