Hindalco Industries, the flagship of Aditya Birla Group and India?s leading producer of aluminium, on Thursday announced that the company?s board has approved its rights issue at Rs 96 per equity share?face value of Re 1 per equity share, lower than initial plans for more than Rs 100, and at a share premium of Rs.95 per equity share. Industry observers say the decision has been taken keeping in mind the volatile situation in the markets.
Moreover, the ratio of the rights entitlement has been changed to three equity shares for every seven equity shares held by the shareholders from 1:3 earlier.
Hindalco will close its book on September 5, 2008, therefore fixing the record date for the rights issue as September 5, 2008 for the purpose of entitlement of the said rights issue, the company informed in statement late evening on Thursday.
Hindalco shares on Thursday were down 2.69% or Rs 3.75 to close at Rs 135.80 on the Bombay Stock Exchange.
Hindalco?s share price has fallen 19% since it announced its rights issue in June this year.
Hindalco had earlier said that the company aims to raise up Rs 5,000 crore by issuing 40.9 crore shares, which would have entitled an equity dilution of 33% and an issue price of about Rs 122.
The company on June 20 had announced a 1:3 rights offer (one new share for every three held) to raise up to Rs 5,000 crore to refinance its acquisition of Novelis that it had bought early last year. Hindalco had taken over Novelis, a Canadian firm, for an enterprise value of $6 billion in February 2007. To finance this, it had taken bridge loans of $3.03 billion from a host of banks. These loans need to be refinanced by November.
It was reported that after downsising its Rs 5,000-crore rights issue, Hindalco will generate more funds internally.