Hindalco plans to borrow Rs14000 crore for Rs10000 crore capex

Hindalco Industries, the flagship company of the Aditya Birla Group, on Tuesday outlined a capital expenditure of Rs10,000 crore in financial year 2010-11. A major portion of the capex will be to fund its ongoing greenfield aluminium projects at Mahan in Madhya Pradesh and Aditya Aluminium in Orissa.

Hindalco also said it plans to borrow about Rs14,000 crore in the next couple of years to build the two new plants that will treble its aluminium making capacity as increased production of cars and aircraft fuel demand for the metal.

Hindalco managing director Debu Bhattacharya said in Mumbai the company will raise long-term debt of Rs7,000 crore through banks and various other options. ''There will be no further equity dilution as we had already tied up the equity fund requirements,'' he added.

The company is also scouting to acquire copper mines to bridge the shortfall of its ore requirement.

Hindalco currently has a consolidated debt of $5 billion (Rs23,420 crore), with the Canadian subsidiary Novelis Inc accounting for $2.7 billion. The company has no major repayment scheduled till 2014. Novelis had $1 billion in cash as on 31 March 2010.

In the copper business, the company targets to increase ore supply from in-house sources to 40 per cent from the current 25 per cent. To meet this target, the company is in talks with various miners abroad to either strike a buyout deal or sign a long-term contract at a fixed price, said Bhattacharya.