Indal plans to divest holding in ailing affiliates
Gives up revival package due to lack of support from government and FIs
Indian Aluminum Company (Indal) has decided to hive off its stake in affiliates – Orissa Extrusions (OEL) and Annapurna Foils (AFL). The Orissa government’s decision not to extend benefits under its Industrial Policy Resolution (IPR) 1996 for reviving sick units, has prompted Indal to take this step.
Indal has a 26% stake in OEL, with Norsk Hydro of Norway holding 25% and the balance being held by IPICOL. Norsk Hydro has long expressed its willingness to sell off its holdings. Indal has already informed the Board for Industrial and Financial Reconstruction (BIFR) that it should consider looking at a new promoter to revive OEL and seek a buyer for Indal`s stake.
Similarly, Indal`s plans for AFL too have spun out of track. With IDBI not warming up to the idea of waiving interest liabilities on loans, a revival package through BIFR seems difficult. Although negotiations are still on, Indal`s option to sell off stake and make an exit from AFL seems a distinct option.
