Worldal reported that Hindalco Industries, the metal products manufacturing arm of the Aditya Birla Group has decided to delay the financial closure of the INR 7,800 crore Aditya Aluminum refinery project due to uncertain market conditions.

Mr D Bhattacharya MD of Hindalco said that the markets were not favorable to raise the money at this point in time. However work on the project was on and there was no constraint on funds to hold up the project. The debt to equity ratio for the project is 75:25 and the company is using equity for the project. Hindalco had raised USD 600 million via a QIP issue in 2009 for its expansion plans.

Mr Sunirmal Talukdar CFO of Hindalco said that the project size for Mahan and Aditya were same and both required the same amount of funding. Hindalco will wait for the right opportunity to tap the market. The company had considered several products to raise money and will take a final decision once it decides to go ahead with the financing.

He said that the company prefers rupee financing with an option to refinance part of the rupee loan with a cheaper ECB, if the opportunity arises. Normally we always keep the option of getting a cheaper ECB credit open. This is what we did with the Mahan and Utkal financial closures. We have a comfortable cash balance today, so we are not in a desperate need of money. We want to launch it when the markets improve.

The company said the project is expected to be commissioned in 2013. The project includes 359 kilo tonne per annum aluminum smelter, a 900 MW captive power plant and an alumina refinery. The company has got the clearances for the 260 kilo tonne per annum smelter and 600 MW of power generation.

(Sourced from www.worldal.com)