Indal sources said in case of any change in the ownership structure of Indal against Alcan, "BAT would definitely review its position". Indal officials chose to remain tightlipped on the details of the deal till it was finalised.

It is believed that Alcan will be in a position to claim in its presentations to financial institutions and the government, with regard to its takeover defence, that its international might is proving to be of advantage to Indal in this case as in many others already cited by the aluminium giant.

Indal has been a supplier of aluminium foils to BAT's Indian associate ITC Ltd, while Indal's Canada-based parent Alcan Aluminium has been a major vendor to BAT, the world's largestcigarette-maker for years.

The securing of a large export market is vital for Indal's return to top gear, following problems of a relatively slow domestic market growth and power problems at two of its smelters.

Even though this has not radically affected capacity utilisation at its downstream plants, production of metals has suffered. Indal makes value-added products, and will seek to hike margins through exports. In 1997-98, Indal had seen spectacular rise in exports.Sources indicated that it was still being worked out as to which BAT markets would Indal be supplying aluminium foils. "The size of the deal would eventually depend on the market-size," they added.

The deal is crucial for Indal as it will substantially increase its foreign exchange earnings. As Indal has become a net importer of metal over the last five years, increased foreign exchange earnings will enable it get import duty relief.

During the financial year, Indal has imported over 6,000 tonne of duty-free primary aluminium againstits foreign exchange earnings in the previous three years.

Indal sources said that BAT is yet to enquire about the open offer for 20 per cent made by cables and copper manufacturer Sterlite. Sterlite's offer price of Rs 115 per share against Alcan's offer price of Rs 105 has given it a better advantage.A revised offer from Alcan is expected within the next fortnight. Sources indicated that an announcement from Alcan will be made following proposed meetings with Alcan executives and government officials next week.

The deal would also prove extremely vital to Indal because after the recent Asian economic crisis and the sharp devaluations in regional currencies, domestic exports will find it difficult to be price competitive with that of other countries in south east Asia.

The advantage of a secure, large deal-in-hand would provide a substantial export cushion to Indal.The takeover drama may, however, queer the pitch for the completion of the deal. With both the open offers of Sterlite and Alcan opening onMay 4, it is expected that the issue will at least take 60 more days to be resolved. The tieup is expected to be kept waiting till then, even keepingaside other issues.