The Aditya V Birla group firm Hindalco has approved to demerge and then acquire all businesses of Indian Aluminium Company Ltd (Indal), excluding the alumunium foil division.In fact, Indal will continue to exist with only the aluminium foil plant while Hindalco will take over most of the existing businesses.After a board meeting held here today, Hindalco said in a statement that it will issue and allot shares to the public shareholders of Indal in the ratio of one share of Rs 10 each in Handalco for every seven shares of Rs 10 each in Indal.The Indal shareholders will continue to hold their shares in Indal. However, the face value of those shares will be reduced from Rs 10 per share to Rs 2 per share. The demerger will take effect from April 1, 2004.‘‘Hindalco owns nearly 97 per cent equity in Indal. I believe that the time is opportune to take this strategic stake to its logical conclusion,’’ said AV Birla Group chairman Kumar Mangalam Birla. ‘‘We would like to bring in maximum focus and harness all possible synergies to attain even higher levels of growth and enhance stakeholder value,’’ he added.Following the demerger, the combined net value of the Hindalco will rise to Rs 8,700 crore.
