Hindalco raises Rs 7,875 cr for aluminum smelter plant

MUMBAI: Hindalco Industries , the flagship of the Aditya Birla Group , has raised 7,875 crore in debt for a greenfield aluminum smelter plant at Mahan, making it one of India's largest debt raising exercise and putting on track the group's proposed $5 billion projects to consolidate the Birlas position as one of the leading producers of aluminum.

Hindalco raised the loan from a syndicate of 31 banks on a floating rate basis for a tenor of 12.75 years. "The average cost of the loan is very attractive," Hindalco chief financial officer Sunirmal Talukdar told ET, adding that the work done in raising funds for the Mahan project would help in raising debt for Aditya Aluminum, the other greenfield project. The rate is pegged at 10.25% and is linked to the State Bank of India's base rate.

The Mahan smelter project will have an annual capacity of 3,59,000 tonnes and will also include a 900 megawatt power plant. Aditya Aluminum is also a 3,59,000 tonne smelter at Lapanga in Orissa. The project includes a 4.2-million-tonne bauxite mine and a 1.5 million tonne alumina refinery at Kansariguda.

The group had earlier announced it would spend $5 billion on three greenfield projects including the Utkal Alumina refinery, the Mahan Aluminum smelter and the Aditya Aluminum project. The equity component for the three projects had been tied up, while the group will raise debt for Aditya Aluminum next.