Hindalco Industries, an Aditya Birla Group company, has raised Rs 9,896 crore to fund its aluminium project in Odisha. The debt funded through a consortium of 28 banks and financial institutions has a tenor of 12.5 years and interest rate of 11.25 per cent a year.
The 13,195-crore Aditya Aluminium smelter project is being funded in a debt-equity ratio of 75:25. The company will set up a 3.59 lakh tonnes a year aluminium smelter along with a 900-MW captive power plant at Lapanga in Odisha. The equity part for the project has already been financed by internal accruals and QIP (qualified institutional placement) issuance of $600 million (about Rs 3,300 crore) made in November 2009.
The company is also setting up an alumina refinery with integrated bauxite mines at Koraput in Odisha, which is expected to be completed by 2014. The company is also implementing two other greenfield projects – Utkal Alumina at Rayagada in Odisha and Mahan Aluminium in Madhya Pradesh.
The company has achieved financial closure at a time when the Government is reviewing a series of coal block allotments made to various metal companies, including that of Hindalco.
Chief Financial Officer Praveen Maheshwari said that the company has chosen to stay on its course and deliver on its long-term strategic objective at a time when most companies are shying away from committing capex.
After stabilisation, the Lapanga plant will be among the lowest cost producers of aluminium globally, he added.
Arundhati Bhattacharya, Managing Director, SBI Capital Markets, said the rupee term-loan facility got oversubscribed 2.25 times even as this facility represents one of the largest debt syndications launched in the recent times.
Speaking at the debt facility signing ceremony, Mythili B, Chief General Manager, IDBI, said investment in big manufacturing projects like these will not only help in the development of adjoining areas, but also revive investor confidence in Indian markets.