Hin­dalco plans to pre­pay `1,100cr debt this month

Financial Chronicle - - COMPANIES & MARKETS -

HIN­DALCO In­dus­tries, an Aditya Birla Group com­pany, plans to pre­pay an­other Rs 1,100-crore debt this month to fur­ther delever­age its bal­ance sheet. “We have al­ready re­paid Rs 7,815 crore and plan to re­pay an­other Rs 1,100 crore in the cur­rent month, which will save in­ter­est cost of Rs 800 crore in the cur­rent fis­cal,” Hin­dalco chair­man Kumar Man­galam Birla told share­hold­ers at the com­pany’s an­nual gen­eral meet­ing (AGM) here.

“In line with our stated ob­jec­tive to delver­age the bal­ance sheet, we have suc­cess­fully raised $500 mil­lion through a qual­i­fied in­sti­tu­tional place­ment (QIP).

“Along with the trea­sury bal­ance this amount was utilised to pre­pay the ex­ist­ing bor­row­ings. Con­se­quently, there is a sub­stan­tial im­prove­ment in con­sol­i­dated net debt to EBITDA,” Birla said.

The com­pany’s over­seas sub­sidiary Novelis also re­fi­nanced $4.3 bil­lion of its longterm debt. The an­nual cash in­ter­est ex­pense stands re­duced by $79 mil­lion, he said.

In an en­vi­ron­ment of mixed eco­nomic sig­nals, Hin­dalco’s reg­is­tered a record con­sol­i­dated EBITDA at Rs 13,547 crore on a turnover of Rs 102,631 crore in FY 17.

Both alu­minium and copper busi­nesses in In­dia and Novelis reg­is­tered ro­bust op­er­a­tional per­for­mance. With the new coal link­age in FY2017, coal se­cu­rity im­proved to over 60 per cent of the an­nual re­quire­ment of the do­mes­tic alu­minium busi­ness.

In FY17, Gare Palma IV/4 coal mines and Gare Palma IV/5 coal mines (in Ch­hat­tis­garh) reached their peak ca­pac­ity. The op­er­a­tions at Kathau­tia mines com­menced in Fe­bru­ary 2017, Birla said.

Go­ing for­ward, the com­pany plans to grow through down­stream prod­ucts and ca­pac­ity ex­pan­sion. The com­pany's three large projects went on stream and the com­pany will start get­ting ben­e­fit in com­ing years, he said.

Com­ment­ing on the out­look, Birla said the do­mes­tic de­mand for alu­minium is ex­pected to ben­e­fit from the in­fra­struc­ture projects pri­ori­tised by the govern­ment.

The thrust on power sec­tor au­gurs well for the com­pany. Other seg­ments also ex­pected to see higher de­mand from au­to­mo­bile and food pack­ag­ing in­dus­tries, he added.

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