UPDATE 1-Alumina to raise about A$200 mln in offer-sources

(Adds details of number of shares being sold, background)

SYDNEY, Aug 28 (Reuters) - Australia's Alumina Ltd (AWC.AX) is expected to offer about A$200 million ($172 million) worth of shares to institutional investors that were not picked up in the company's A$910 million entitlement offer, two sources familiar with deal told Reuters on Thursday.

Some 75 million shares left over after the rights offer would be sold to institutions, one source said. The offer will be priced on Friday.

"We were anticipating a shortfall of this order... many of the existing shareholders have been very happy to take up their shares at A$3.00," the source added. He declined to be identified as the sale details were not made public yet.

Alumina declined to comment.

The new shares would be offered at a floor price of A$3.00, compared with Alumina's last traded price of A$4.35, the sources added. The 5 for 19 entitlement issue was also offered at A$3.00 a share.

"Given the very strong take-up by existing shareholders, we believe this will be well sought after by non-shareholders," the source added.

The funds raised would be used to cover cost overruns at its Brazilian projects. Alumina's alumina and aluminium operations are run under the Alcoa World Alumina and Chemicals (AWAC) joint venture, which is 60 percent owned by U.S. based Alcoa Inc (AA.N) and 40 percent by Alumina.

The entitlement issue to existing shareholders, offered at a 31 percent discount to Alumina's last traded price, follows cost blow outs at its Alumar alumina refinery and Juruti bauxite mine in Brazil.

The fully underwritten offer was managed by UBS, Goldman Sachs and Macquarie Group Ltd. ($1=A$1.16) (Reporting by Denny Thomas; Editing by James Thornhill)