Alcoa plans to buy 45% in India Foils

Hindalco, Essel also in race for Vedanta stake.

Global aluminium giant Alcoa is planning to enter India by acquiring the Vedanta group's 45 per cent controlling stake in Kolkata-based India Foils.

Pittsburgh-based Alcoa has a total revenue of $ 23.5 billion to which its packaging business contributes $3.2 billion. Alcoa is present in 43 countries with 1,31,000 employees and is the world's leading producer of primary aluminum, fabricated aluminum and alumina.

Sources close to the development said Alcoa's move followed the Vedanta group's decision to put its shareholding in India Foils up for sale five years after it acquired the company from the Kolkata-based BM Khaitan group.

Other companies in the race for the promoter's shareholding in India Foils include the Aditya Birla group's Hindalco, the Subhas Chandra-controlled Essel Packaging, Nagrika Foils and PG Foils.

The sources said the firms, which expressed interest to acquire the controlling stake, would be invited to visit plants of India Foils shortly. Thereafter, the bidding process will begin towards the end of September, or early October.

Industry sources said a successful acquisition of the promoter's stake in India Foils would be followed by a mandatory 20 per cent open offer for shareholders. The India Foils stock has been hovering around Rs 15.

West Bengal Industries Development Corporation holds a 1.20 per cent stake in India Foil, financial institutions hold 4.41 per cent, private corporate bodies have 11.63 per cent and the public holding stands at 38.61 per cent .

When contacted, sources in Vedanta said, "India Foils is into aluminium packaging business which does not fit into the group's core competence. The group is weighing the option of divesting its shareholding in India Foils. The exercise is at an initial stage." The sources added that a merchant banker was appointed to help the company find a buyer.

The Anil Agarwal-controlled Vedanta group's Madras Aluminium took over India Foils, the second largest aluminium foil manufacturer in India, after Hindalco in 2000. Prior to this, Hindalco had signed a preliminary agreement with the Khaitans to acquire India Foils but backtracked as it was not satisfied with due diligence.

Recently, three directors Navin Agrawal, Tarun Jain and Haigreve Khaitan resigned from the India Foils board. Indrajit Mookerjee, the managing director, also resigned.

THE STORY SO FAR ...

Pittsburgh-based Alcoa has a total revenue of $23.5 bn

Vedanta group put its shareholding for sale five years after acquiring it from BM Khaitan in 2000

The bidding process will begin in September. Bidders to visit plants shortly

Three directors resigned from the India Foils board recently