Bhubaneswar, August 29: The decks have been cleared for offloading Industrial Promotion & Investment Corporation of Orissa Ltd's 12.15 per cent stake in Orissa Extrusions Ltd (OEL) in favour of Hydro Aluminium of Switzerland and Indian Aluminium Company (Indal). The Foreign Investment Promotion Board (FIPB) has approved the Swiss aluminium major's proposal to enhance stake in OEL to 31.67 per cent from the existing 24.5 per cent. Indal will increase its stake in OEL by 4.98 per cent to 31.04 per cent.Orissa Extrusions, an aluminium extrusion manufacturing unit located at Balasore, has been jointly promoted by the state-owned Ipicol, Indal and Hydro Aluminium.
While Ipicol has 12.15 per cent stake, Indal and Hydro hold 26.06 and 24.5 per cent respectively. The remaining 37.29 per cent is with the public. Recently, a stake transfer agreement was signed by the three promoters at a price of Rs 22 per share. Under to terms of the deal, Ipicol, Indal and Hydro will lend Rs 2.9 crore, Rs 3.8 crore and Rs 3.7 crore respectively to OEL to help it pay off dues to financial institutions.
Ipicol managing director AP Padhi told The Financial Express that the deal is a great bargain for the corporation. "Getting Rs 22 per share when the scrip is being quoted at Rs 2 at the bourses is a great achievement," he said. Ipicol will provide Rs 2.9 crore of the Rs 4 crore obtained by offloading the shares as loan to OEL.
Incorporated in 1986, OEL began production in 1989. The 7,200-tonne plant soon ran into rough weather due to stiff competition in the domestic market. It reported a loss of Rs 2.2 crore in 1996-97 on a turnover of Rs 43 crore. After the financial restructuring, Indal and Hydro will provide the technological and marketing support to turn around the loss-making company.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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