The proposed reason for acquiring this green clearance is an alumina refinery project to be set up in Rayagada that would involve an investment up to Rs. 6,000 crore. The flagship trader of Aditya Birla Group aims at producing more than 1.5 million tonne of aluminium from this plant and is rapidly progressing towards its infrastructure and financial wrap up.
There are various stages lined up for Adtiya Alumina Project beginning with this smelter plant in Orissa and is expected to come to life by 2014. “We have got the stage-2 clearance for the project last week and are now working on the financial closure," Managing Director Debu Bhattacharya told Business Standard.
However, the company has undertaken various measures to fund this project.To elaborate this, Bhattacharya said, “We went for a qualified institutional placement (QIP) last year. Now, I am not saying that we are going for another QIP to raise money for this project but we are looking at all possible instruments to raise money."
“The forest area on the project site needs to be diverted and the stage-2 clearance was needed to do that. We can now go ahead with the project with full steam." The debt - equity ratio, as per Bhattacharya, for this setup is believed to stand equal as the current ratio is 0.24: 1 and there is room for leveraging balance sheets.
Total expenditure of this aluminum smelter plant will roughly cost Aditya Birla Group somewhere around Rs. 9,200 crore with the final commission due for late 2012. With a capacity of 359 kilo tonnes per annum, the smelter plant would also provide for 900 Mw power setup for its judicial use.
The second leg of the project, for which it has got the forest clearance, will have an alumina refinery with a capacity of 1.5 million tonnes per year and will be commissioned by 2014.