Nalco in talks to buy Indonesian firm Inalum

　　PTI reported that Nalco is in talks to buy Indonesia’s Ashan Aluninum for up to INR 8,000 crore in what could be the largest overseas acquisition by state owned metal firm.

　　A Japanese consortium holds 59% stake in Inalum which owns 0.21 million tonne capacity aluminium plant in North Sumatra province while the rest is with the Indonesian government.

　　Sources privy to the development said the licence of the Japanese consortium to run the firm is coming to an end next year and the Indonesian government has invited the Indian flagship firm for discussions.

　　Nalco has made a detailed presentation to a committee of the Indonesian Cabinet elaborating its plans to take Inalum further. It expressed intention of both running Inalum and acquiring any stake or both.

　　Inalum was set up in 1976 as JV between the Indonesia Government and Nippon Asahan Aluminium, a consortium between 12 Japanese companies and government. Initially, the shareholding ratio between the Indonesian Government and NAA was 10% and 90% respectively.

　　In October 1978, the ratio changed to 25% and 75% and since June 1987 it has been 41.13% and 58.87%. The share composition then changed to 41.12% for the Indonesia Government and 58.12% for NAA in February 1998.

　　Indonesia’s contract with NAA was to run the company for 20 years, which is ending next year prompting Jakarta to scout for firms which can take care of its future.

　　Sources said that this does not mean that doors have been shut on NAA. The Indonesian government is in touch with Nalco as well as with the Japanese firm. No decision has been taken yet. In fact there is a strong pressure from the Japanese Government to renew the contract, but invitation from the Indonesian government to Nalco was an indication that it is open to rope in a new partner.

　　They said that if it 100% acquisition together with ownership of all captive power plants, it will roughly cost Nalco between INR 7,000 crore to 8,000 crore.

　　Mr Mr BL Bagra chairman of Nalco said that “We have expressed our interest also to take over Inalum. We have shown interest to get associated with it. Once the contract with the Japanese ends, whether the Indonesian Government will offer us a part of equity or full equity or it will give to Japanese only, we don’t know. We are yet to hear from them. We are open to picking up part of the equity. We are open to fully acquiring the company. We are open to just running the company and for both running the company with some stake.”