Hindalco Industries, an Aditya Birla Group company, plans to raise funds through bonds for its Aditya Aluminium project in Orissa as the bank interest rates have been testing multi-year high in the last few months.

The company has to raise a debt of Rs 7,875 crore for the 3,59,000-tonnes a year aluminium smelter and 900-MW captive plant slated for completion early 2013.

The investment will also include developing an aluminium refinery with integrated bauxite mines.

“We see another round of hike by the RBI before it considers a pause in the rate hike cycle. “At present, markets across the globe are choppy. Though we may not require funds immediately, we are seriously considering tapping the bond market to tie-up the debt for Aditya Aluminium,” said Mr S. Talukdar, Chief Financial Officer, Hindalco Industries.

“The company considered raising funds through perpetual bond, but decided against it. After much deliberation, we made up our mind on bonds.

“Currently, we are utilising the equity raised for the project and the work has not suffered for even a single day for want of funds,” he said.

Joint venture

Assuring that its US subsidiary, Novelis Inc, is well poised despite testing times, Mr D. Bhattacharya, Managing Director, Hindalco, said the company has acquired its joint venture partner British Petroleum's 60 per cent stake in Logan Aluminium Inc, which makes automotive sheets.

The joint venture was formed in 1983, before Hindalco acquired Novelis in February 2007.

BP controls Logan through its wholly-owned Arco Aluminium Inc, which manufactures aluminium sheets used by the beverage and automotive industries.

“We have acquired eight million shares as part of the buyback agreement entered by Novelis even before it was bought over by us.

“Moreover, the venture requires fresh capital infusion. Arco will continue to be our technology partner for next 99 years,” he said.

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