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Sunday, Jan 20, 2002

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Norsk to sell Utkal stake to Indal-Alcan

Badal Sanyal

KOLKATA, Jan. 19

THE Oslo-based Norsk Hydro has agreed to sell its entire 45 per cent equity stake in Utkal Alumina International Ltd (UAIL) to other existing promoters of UAIL, namely Indian Aluminium Company Ltd (Indal) and Alcan Aluminium Company (Alcan) of Canada, at a price of about $ 6 million. A deal in this regard has already been signed between Norsk Hydro and the Indal-Alcan combine.

The substance of the deal was, in fact, briefed to the UAIL board which met in New Delhi on Friday. Norsk Hydro representative on the UAIL board, Mr O'lali, who was Managing Director, is learnt to have relinquished his post thereby paving the way for the Indal-Alcan combine to appoint a new MD for UAIL. The board also accepted the resignation of Mr. N. K. Choudhary as chairman of UAIL.

It may be mentioned that Norsk Hydro took a decision a month ago to exit from UAIL which is setting up a 100 per cent export-oriented alumina project in Orissa at an estimated cost of about $ 1 billion. The project is being set up based on the rich bauxite reserves at Baphlimali mine.

Available information suggests that Indal, which has at present 20 per cent stake in UAIL, is likely to be allowed to buy about 35 per cent from Hydro's stake, leaving 10 per cent for Alcan. This means that Indal, a subsidiary of the Aditya Birla Group, will be able to establish its management control with 55 per cent equity over UAIL which has plans to set up a refinery with an annual production capacity of three million tonnes of alumina.

The Indal board, which will meet on Monday, will now ratify the share purchase deal. Incidentally, Alcan, which holds 35 per cent equity stake in UAIL will now be enjoying 45 per cent stake.

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