The road shows to achieve the financial closure for Hindalco’s Mahan Aluminium project have begun. The project, slated at Rs 9200 crore, will have a 359 kilo tonne per year (ktpy) aluminium smelting capacity and 900 MW of captive power.
Debu Bhattacharya, managing director, Hindalco told Business Standard, “The debt to equity ration for the project will be 75:25. Hopefully, we should be able to achieve the financial closure before the end of this financial year.”
He said that the company is looking to raise the loan in rupee terms but there might be international banks who would be funding the debt.
The company has mandated SBI Capital Markets, Citibank, Kotak Mahindra Bank and The Royal bank of Scotland for launching a rupee term loan.
Sunirmal Talukdar, CFO, Hindalco said, “Right now, we are trying to finance the Mahan project.” He said that as the base rates are high currently, the company is in talks with banks to give loan at “reasonable rates”.
Hindalco is looking to commission the Mahan project by October 2011.
The coal requirement for the captive 900 MW power plant at the site will be met from the Mahan Coal block allotted to Mahan Coal Ltd, a joint venture between Hindalco and Essar Power Ltd.
The company, in a statement said, “As the Mahan coal block was included under the category of ‘NO GO’ area, the Forest Advisory Committee (FAC) has not given its decision on MCL’s application for forest clearance. The Mahan coal block is awaiting forest clearance approval before further progress can be made.”
It further said that a group of Ministers (GoM) has been set up by the Prime Minister to resolve all cases where there is significant progress on construction of the downstream projects and mining approvals is awaited from the Forest Department.
Hindalco said, “Inter-Ministerial team visited the end-use project sites in July 2010 and confirmed that in end-use project, significant investments have already been made / committed in acquisition of land, placement of orders and work has progressed considerably. Considering that our projects are at advanced stages of implementation, it is expected that our block will be recommended for forest clearance.”
As an interim measure, the company applied to Ministry of Coal for temporary supply of coal (tapering linkage) to the Mahan power plant, until the company’s own mines commence operation at full capacity.
