As the final countdown begins in the stakes game between Mumbai-based Sterlite Industries (India) Ltd and Canadian aluminium major Alcan, Indian Alumiuim Company Ltd (Indal) has begun lobbying hard with shareholders to dispel rumours about Alcan is losing interest in the company following the spate of developments over the last month.
Speaking to newspersons here yesterday, Tapan Mitra, vice chairman and managing director of Indal, said that even in the present situation Alcans commitment to Indal in terms of funds alone adds up to over Rs 1000 crore.
This is aside from the technology commitments to Indal which have not changed in the recent turmoil of events.
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The Rs 1000 crore-plus commitment by Alcan is primarily in terms of a Rs 800 crore capital expenditure plan that Indal has chalked out for the next three years.
If Indal is in need of funds, Alcan will definitely help out commensurate with its shareholding in the company, Mitra said.
Apart from the Rs 800-crore capital expenditure plan, the Canadian major is has also committed to picking up 20 per cent in the Utkal Alumina Project which is being promoted jointly by Indal, Tata Industries and Norsk Hydro of Norway. It would be significant to note that the Alcan offer to pick up a stake in Utkal came in the middle of the recent controversy.
Finally, said Mitra, Alcans continued interest in Indal is reinforced by the fact that on March 5, Alcan confirmed that it would be making a counter offer to shareholders of Indal to acquire upto 14,222,400 ordinary shares (representing 20 per cent of the voting capital) of Indal at a price of Rs 105 per share.
Over the past ten years, 71 per cent of the funds for our capital expenditure has come from retained earnings and not reserves. Most of this money has obviously come from Alcan, emphasised Mitra.
He also emphasised that contrary to reports Indal would not be able to replace the technology presently being supplied by Alcan.
Further, in a bid to boost shareholder confidence the board of directors of Indal has also issued a formal letter to each of its shareholders advising the rejection of the open offer made by Mumbai-based Sterlite Industries (India) Ltd to acquire 20 per cent stake in Indal on February 16. The letter was released on March 12 following the Indal board meeting held in Mumbai on the same day.
Commenting on whether ordinary shareholders are likely to take up the Sterlite offer, Mitra said that in normal practice trading on Indal shares in the markets has never been very dramatic and there has been no signs of brisk activity following the Sterlite offer. However, he said that if Indian financial institutions decide to offload their stake this would naturally send a very strong signal to shareholders.
The supposed threat by Alcan to sever all technology ties with the company if Sterlite acquires a stake in the company was dismissed by Mitra as a baseless assumption.
As far as technology is concerned we have an open door arrangement with Alcan. Further, a lot of the technology over which Alcan has proprietary right has been made available to Indal. In fact we are grateful for the open offer as it has compelled us to write down our history and the list of what Alcan has given us and what is going to come in the future is awesome, said Mitra.