Search the Internet          Tips  Sites: Finance, Investment

Sterlite plans foreign listing for Balco expansion

Sterlite Industries said it plans to raise money abroad to fund expansion at Bharat Aluminium Company Ltd, the aluminium firm it bought a year ago in India's first big-ticket privatisation.

Sterlite's chairman Anil Agarwal said the copper and aluminium maker was likely to list on the London Stock Exchange to help fund a Rs 40-billion capacity expansion at Balco.

"We wish to get international value for Sterlite to fund our aluminium expansions," Agarwal told Reuters in an interview at the weekend. "We are looking at an LSE or New York Stock Exchange listing in the second half of 2002 but are likelier to list on the LSE as the major mining shares are listed there."

Sterlite plans to increase Balco's capacity to 300,000-400,000 tonnes per annum by 2005 from 100,000 tpa, which will help it catch up with India's number one and number two companies, private-sector Hindalco and state-run National Aluminium Company respectively.

Agarwal said funds from the listing would also be used to increase Sterlite's copper smelter capacities to 300,000 tpa from 150,000 tpa, and the shares could be used as currency to acquire copper mines in Latin America and Australia.

It already owns two copper mines in Australia.

Sterlite could become the first Indian company with a primary listing on the LSE. Indian companies generally list only global depositary receipts, which have underlying shares listed in India.

The copper maker is currently buying back its Indian shares and plans to delist from the Bombay Stock Exchange if the public's holding falls below 10 per cent from 57 per cent now.

GOING GLOBAL

Agarwal, 47, who spends large parts of the year in London, felt it key that the group become more global in its operations.

"We should be closer to the metals and mining headquarters of the world," he said.

The group, founded by Agarwal in 1975, started out making copper cables at Patna in the mineral-rich but economically backward state of Bihar.

It has expanded aggressively since then.

"We aim to be a $3-5 billion business in three to five years from our current $1.2 billion," Agarwal said.

Sterlite was the only company to bid for a 26 per cent stake in state-run Hindustan Zinc Ltd, but the sale was called off in November as the bid was below the government's floor price.

Agarwal said Sterlite would "probably be interested" if there was a second round of bidding, but it would depend on the government's terms.

He also said Sterlite had every intention of exercising its three-year call option on the 49 per cent stake it doesn't already own in Balco.

In addition to copper and aluminium, the group makes optical fibre through Mumbai-listed Sterlite Optical Technologies Ltd and the founders also own a gold mine in Canada.

The founders also own stakes in Madras Aluminium Company Ltd, which controls aluminium foil maker India Foils.

Sterlite's shares were up 0.39 per cent at Rs 128.85, while the Bombay benchmark was down 0.16 per cent on Monday.

YOU MAY ALSO WANT TO READ:
The Balco Saga
The Rediff Budget Special
Run-Up To The Budget