Steel Guru
Essel Mining driving acquisition strategy of Aditya Birla Group
Edited by : AL CIRCLE
2 min read
ET reported that the Aditya Birla Group after a closely fought contest with global biggies, bought out Canada's Novelis one of the world's largest rolled aluminum makers, for USD 6 billion.
But what caught attention in the Novelis deal was that Essel Mining & Industries, a little known, unlisted, closely held company within the Birla fold, had extended USD 300 million in equity, to fund the acquisition of the Canadian major.
Soon it emerged that Essel has been driving most of Aditya Birla Group's transactions serving as a holding company for the group and leading the business family's efforts to ramp up promoter holding in companies that were as diversified as aluminum and telecom and financial services.
One of the members of the team involved in the Novelis acquisition said that "Essel was a strong supporting factor in the days leading up to the acquisition of Novelis. The significance of having a company, almost 100% owned by the promoter, to bring in promoter equity, is enormous. It sends out the right signals that the group is serious.”
And from financial projections made recently, Essel Mining is likely to continue that. It is expected to double its net profit to USD 1 billion by 2015, with cash flow likely to act as a cushion for the group's various future plans.
But what caught attention in the Novelis deal was that Essel Mining & Industries, a little known, unlisted, closely held company within the Birla fold, had extended USD 300 million in equity, to fund the acquisition of the Canadian major.
Soon it emerged that Essel has been driving most of Aditya Birla Group's transactions serving as a holding company for the group and leading the business family's efforts to ramp up promoter holding in companies that were as diversified as aluminum and telecom and financial services.
One of the members of the team involved in the Novelis acquisition said that "Essel was a strong supporting factor in the days leading up to the acquisition of Novelis. The significance of having a company, almost 100% owned by the promoter, to bring in promoter equity, is enormous. It sends out the right signals that the group is serious.”
And from financial projections made recently, Essel Mining is likely to continue that. It is expected to double its net profit to USD 1 billion by 2015, with cash flow likely to act as a cushion for the group's various future plans.
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