Hindalco plans to raise Rs25,000 crore for expansion: report

Hindalco Industries Ltd, the flagship of the Aditya Birla Group, which revealed a $1.8 billion third quarter loss at its Novellis unit, is reported to be planning to raise$5 billion (Rs25,000 crore) by pledging assets and future earnings of its units.

Lenders will be repaid from cash receivables from sales, on which they will have the first claim, according to the report quoting its chief financial officer S Talukdar. The fund raising will be completed by 2012 and the money will be used for future expansion, the report said.

''Individual companies will borrow money without recourse to Hindalco. We will securitise cash flows and assets with the lender to raise money," Talukdar told the paper.

Earlier this week, the company said its board had approved a proposal to use US$1.8 billion in its share premium reserve to write off costs relating to its foreign acquisition and domestic expansion.

Hindalco had acquired Canadian aluminium product maker Novelis in 2007 for $5.9 billion and has also announced investment of $4 billion (Rs19800 crore) over three years to expand capacity in India.
 
Novelis has reported a  net loss of $1.8 billion in the third quarter ended 31 December 2008 owing largely to a goodwill loss of $1.5 billion, a fallout of the ongoing global meltdown.

''The impact of the loss posted by Novelis on Hindalco Industries would be felt at the end of the current fiscal when Hindalco consolidates its earnings. The impact should, however, be limited as Hindalco has initiated steps to offset the $1.5-billion loss of the total $1.8-billion loss incurred by Novelis. The remaining $300-million loss would impact Hindalco's profitability,'' the company said in an earlier  release.