Sterlite to double Balco investment

Sterlite Industries is doubling its investment in Bharat Aluminium Company Ltd (Balco) from Rs 1,200 crore to Rs 2,500 crore to acquire the remaining stake of the government and also to restructure its debt.

The company got the shareholders' approval to spend Rs 1,200 crore on the acquisition of shares at an extraordinary general meeting held on January 20, 2004.

Sterlite has already come out with a rights issue of Rs 1972 crore for investment in Balco and other subsidiaries of the company. It has allotted the rights at Rs 550 per share early this month. Sterlite holds 51 per cent stake in Balco with an investment of Rs 553 crore.

Company chairman Anil Agarwal in a communiqué to the shareholders recently said the company is planning to revise the earlier limit of Rs 1,200 crore to Rs 2,500 crore to provide for higher investments, if envisaged.

Incidentally, the Anil Agarwal group has already increased its stake in former public sector Hindustan Zinc from 46 per cent to 64.92 per cent in October 2003.

"The company is also exercising its option to acquire further shares in another subsidiary Balco from the government of India. The governments approval is awaited," Agarwal said.

According to the letter, Sterlite is also planning to invest up to Rs 1,000 crore in another subsidiary, Vedanta Alumina Ltd. Vedanta is setting up bauxite mining facilities and one million tpa alumina refinery for production of alumina and a captive power plant in the state of Orissa.

Incidentally, Vedanta Alumina is fully owned subsidiary of Sterlite. Agarwals letter to the shareholder states that, besides Vedanta, the company has undertaken a series of expansion program at its plant at Korba in Chattisgarh and Chanderiya in Rajasthan.

"Expansion and consolidation has been the key strategy in the company's growth plan," written Agarwal.