Hindalco plans Rs5,000 crore rights to part-finance Novelis acquisition

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.