BANGALORE/HYDERABAD: The Essel Group has dangled an offer to buy out the founder of IVRCL as it presses ahead with a plan to smoothly gain control of the company, a person close to the development said.
The Subhash Chandra-controlled Essel, which is now the largest shareholder in IVRCL, is keen to avoid a costly takeover battle and has offered to buy out promoter Sudhir Reddy’s stake at Rs 90 per share, valuing the company at Rs 2,400 crore, the source said.
The offer is a 33% increase over IVRCL’s share price on March 27, when Essel announced that it bought a 10.2% stake in the company.
On Wednesday, it bought 2.08% more, surpassing IVRCL promoters Sudhir Reddy and his associates who own just 11.2%. Reddy said he has not been approached with a ‘formal offer’.
Essel executives did not answer phone calls or reply to text messages seeking their comments for this story.
Shares of IVRCL rose 2.7% to Rs 71.2 on the BSE, extending their gains to 18.5% since March 27. The stock of its subsidiary, Hindustan Dorr-Oliver, gained nearly 20%.
Essel’s determination to win control of IVRCL has put Sudhir Reddy, the chairman and managing director, in a dilemma. While Reddy has received offers of financial assistance from some businessmen in Andhra Pradesh to shore up his holding in the company, accepting such assistance could result in a costly takeover battle whose outcome is uncertain.
At the same time, he is loathe to give up control of a company he founded more than two decades ago and whose annual turnover last year was nearly Rs 6,000 crore. Amit Srivastava, an analyst with brokerage firm Nirmal Bang, said buying stock from the market is not sufficient for IVRCL’s promoters to retain control or for Essel to take over.
WAITING GAME
Essel group has made offer to IVRCL promoters for negotiated deal at Rs 90 per share.
Essel announced on Wednesday that it has raised its stake to 12.3%.
It is now the largest shareholder in IVRCL, surpassing founder Sudhir Reddy.
IVRCL subsidiary Hindustan Dorr-Oliver’s stock rose by nearly 20%.
Institutional investors with more than 42.5% stake keyplayers.
FIs SUPPORT REQUIRED
“Getting the support of the institutional investors, who normally are keen on appreciation in share price, becomes the deciding factor. It needs to be seen who – IVRCL promoters or Essel group – will manage to win their supportof the institutional investors,” said Nirmal Bang’s Srivastava.
Institutional investors together own more than 42% of IVRCL.
Norwegian sovereign wealth fund Government Pension Fund Global, ICICI Prudential Life and HSBC Global Investment are among the biggest institutional stakeholders.
An analyst with a Mumbai-based brokerage who spoke to the IVRCL management after Essel’s announcement of bought 10.2% in the company said that although the IVRCL promoters plan to raise funds from friends and fellow businessmen to shore up their staketo avert a takeover, it was not going to be an easy task.
NYSE LISTED ENBRIDGE JOINS RACE TO BUY MUKESH AMBANI’S RGTIL
NYSE listed energy major, Enbridge is in talks to buy Mukesh Ambani’s closely held company Reliance Gas Transportation Infrastructure Ltd (RGTIL), sources with direct knowledge said. Sources also shared that IL&FS and private equity players 3i, Blackstone and KKR have also shown interest in buying part or whole of RGTIL and are in talks with Mukesh Ambani’s group company. The promoters are said to have a valuation expectation of Rs 10,000 crores for the gas pipeline business. Experts said that the entry of Enbridge which operates in Canadaand the USis a game changer, especially for the PSU companies like GAIL and Oil Indiawhich have already shown interest in buying RGTIL. Mukesh Ambani has appointed JPMorgan, Citi and SBI Caps for the sale of RGTIL. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/nyse-listed-enbridge-joins-race-to-buy-mukesh-ambanis-rgtil/articleshow/12533515.cms)
OIL INDIA IN TALKS TO BUY STAKE IN CHESAPEAKE’S OKLAHOMA OIL ASSETS
NEW DELHI: State-owned Oil India Ltd (OIL) is in talks to buy a stake in Chesapeake Energy Corp’s Mississippi Lime unconventional oil assets in Oklahoma. Chesapeake CEO Aubrey McClendon on February 14 made a presentation to OIL management on possible stake sale in its unconventional liquid rich carbonate play, sources privy to the negotiations said. The Mississippi Lime play in northern Oklahomais a conventional — if somewhat complex — carbonate reservoir that is rich in oil and natural gas liquids (NGL) like butane. Chesapeake Energy is a Fortune 500 company with a market capitalisation of $ 37 billion and is the second largest producer of natural gas and 12th largest producer of liquid hydrocarbons in the USA. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/oil-india-in-talks-to-buy-stake-in-chesapeakes-oklahoma-oil-assets/articleshow/12533477.cms)
L&T BUYS BRITISH FIRM THALEST FOR RS 24 CRORE
MUMBAI: Larsen & Toubro has acquired the UK-based provider of ship control and automation systems Thalest for 3 million ( Rs 24 crore) to use British firm’s technology for commercial and naval ships. The acquisition by L&T’s electrical and automation business division is aimed at expanding the automation offerings for ships. Thalest is the UK-based holding company of Servowatch Systems, Bond Instrumentation & Process Control and Servowatch of US. “We are increasing our automation services portfolio. This is a small acquisition for 3 million pounds, but with this acquisition we get technology for automation systems for marine space,” SC Bhargava, senior vice-president and head of L&T Electrical & Automation, told ET. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/engineering/lt-buys-british-firm-thalest-for-rs-24-crore/articleshow/12539669.cms)
TATA POWER LAUNCHES JOINT VENTURE FIRM CENNERGI WITH EXXARO RESOURCES
NEW DELHI: Tata Power, along with South Africa’s Exxaro Resources today launched their joint venture Cennergi (Pty) Ltd that would focus on developing electricity generation projects in the African continent. Cennergi also marks a major overseas foray for Tata Power, India’s largest private power generator. The 50:50 joint venture entity would serve the expanding energy markets in South Africa, Namibiaand Botswana, Tata Power said in a statement. “The initial project pipeline focuses on renewable energy projects in Southern Africaand Cennergi’s strategy is to create a balanced portfolio of generation assets,” it said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/tata-power-launches-joint-venture-firm-cennergi-with-exxaro-resources/articleshow/12535009.cms)
ACCOR BETS BIG ON INDIA; TO OPEN 11 HOTELS IN INDIA IN 2012
MUMBAI: Leading international hotel operator Accor on Wednesday said it will open 11 new hotels in Indiain 2012. “We continue to be excited about opportunities for growth in Asia Pacific, specifically India. Accor is uniquely placed as the only international hotel group in Indiawith brands that span all segments, from luxury to budget. We are leveraging this unique position to expand in this key market,” Accor Chairman and Chief Executive Officer Denis Hennequin said in a release here. Three of these 11 hotels are already operational, he said, adding the new hotels, with over 4,500 guest rooms, are coming up in cities like Delhi, Mumbai, Jaipur, Ahmedabad, Pune and Bengaluru. Currently, the European hospitality major operates 15 hotels in India. Accor’s plan to have 90 hotels in the country by 2015 remains on track, Hennequin said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/services/hotels-/-restaurants/accor-bets-big-on-india-to-open-11-hotels-in-india-in-2012/articleshow/12535732.cms)
SHOPPERS STOP COMPLETES 20 YEARS OF RETAIL BUSINESS
PUNE: Shoppers Stop has completed two decades in the retail business. The company opened its 52nd store in the country in Pune on Wednesday. It would open 23 stores in next three years with estimated investments of R300 crore, Govind Shrikhande, customer care associate and MD of Shoppers Stop said. Slowdown in last few quarters will not stop our expansion, he said. We have reported volume revival and will report full recovery in next two quarters, Shrikhande said. We have been making profit and have suffered losses only once when we had to shut some stores, he said. Shrikhande says Shoppers Stop has been able to sustain itself over these years due to the freedom that professionals got in the company and their longevity in the organisation. “The promoters do not run the business and the professionals are empowered and that has made the difference,” says Shrikhande. Most of the retailers who made big announcements and massive expansion are struggling because their financial models are not clear, he reckons. (For details log on to : http://www.financialexpress.com/news/shoppers-stop-completes-20-years-of-retail-business/932821/)
UNITED SPIRITS DEBUTS IN AMERICA
BANGALORE: Quietly away from the financial stress UB Group companies are going through, United Spirits, its flagship company, has debuted a popular whisky brand, Royal Challenge, in one of the toughest consumer markets of the globe, America. “Royal Challenge was recently introduced in New Yorkat select modern format retail stores. A UB Group resource is working on this initiative and supermarket chains such as Bayway World of Liquor, Buy Rite, Shop Rite and Liquor Locker are stocking the brand,” a senior management official told Business Standard. United Spirits is testing the market with a few thousand cases. “We will next look at San Francisco, where there is a sizeable Indian population,” the official added. United Spirits sold 127 million cases (a case is nine litres) last year and has a 53 per cent share in the Indian Made Foreign Liquor market. It is looking to touch the 200-million case mark within three years. A fifth of its Rs 7,000-crore top line comes from abroad. Royal Challenge is among the top selling whiskies in India, with sales of 1.2 mn cases per annum and a market share of 33 per cent in its category. Ablend of imported scotch and Indian malts, it has been in existence for 24-years, Prior to debuting in America, it had formed an ‘emerging markets’ dvision as part of a strategy to dot more global locations. (For details log on to : http://www.business-standard.com/india/news/united-spirits-debuts-in-america/470200/)
RBI SHOULD CLARIFY IF FDI IS ALLOWED IN LLPs: ASSOCHAM
NEW DELHI: The Reserve Bank should clarify if foreign direct investment is allowed in limited liability partnership (LLP) form of business, industry body Assocham said today. LLPs were not allowed to raise money through external commercial borrowings, but foreign nationals, companies and LLPs formed outside India, were eligible to become partner in an Indian LLP, Assocham said in a statement. “It will, therefore, be in fitness of things that the RBI issues a notification under the Foreign Exchange Management Act, 1999, at the earliest clarifying that foreign direct investment is permitted in LLPs with sectoral norms and caps,” Assocham secretary general DS Rawat said in a statement. LLP is a business vehicle that allows small enterprises work like a corporate structure with limited liability while having freedom to mange their internal structure as partnership. (For details log on to : http://economictimes.indiatimes.com/news/economy/policy/rbi-should-clarify-if-fdi-is-allowed-in-llps-assocham/articleshow/12535964.cms)
BLOW FOR TELECOM COMPANIES AS SC REFUSES TO REVIEW CANCELLATION OF LICENCES
NEW DELHI: The Supreme Court has declined to reconsider its order cancelling 122 telecom licences, possibly setting the stage for further legal battles before international arbitration panels, even as it agreed to hold further hearings on the government’s review petition questioning parts of the judgement that had appeared to mandate auction of natural resources. The order, uploaded on the court’s website late Wednesday evening, virtually marks the end of the road for Datacom and S Tel that had been ordered to surrender all of their licences. It also comes as a setback for Tata Teleservices and Idea that had lost some of their licences. But companies such as Norway’s Telenor and Russia’s Sistema have invoked provisions in bilateral investment protection agreements that allow them to sue the Indian government before international arbitration panels for losses caused by state actions such as expropriation. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/telecom/2g-case-sc-refuses-to-review-cancellation-of-122-licences-end-of-road-for-datacom-and-s-tel/articleshow/12538481.cms)
INDONESIA‘S 25% TAX PLAN ON COAL EXPORTS TO HIT INDIAN POWER FIRMS
MUMBAI: Indian companies, cheering the Presidential decree forcing Coal Indiato fuel their power stations, face a fresh bout of uncertainty as Indonesiahas proposed a 25% tax on coal exports which would make many plants unviable and encourage Indiato turn to Africa and Australiafor fuel. Indonesia’s industry ministry, which proposes to impose this tax to prevent overexploitation of its mines, plans to double the levy to 50% in 2013, according to agency reports. Indonesia’s vast coal reserves had attracted large investments by companies, such as Tata Power, Adani Power and Reliance Power, who bought assets in the country to fuel their projects in India, while others, such as Lanco Infratech, have long-term pacts with miners and traders in the country. Indian power producers are rapidly losing faith in Indonesiaas this is the second time that the country has rattled them. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/indonesias-25-tax-plan-on-coal-exports-to-hit-indian-power-firms/articleshow/12540374.cms)
GOVERNMENT INVITES VIEWS TO FIRM UP ELECTRICITY SECTOR ROADMAP
NEW DELHI: The government has invited views from all the stakeholders, including power generation firms for finalising the roadmap of the electricity sector for the next five years. Power sector planning body, Central Electricity Authority (CEA) has prepared the draft for National Electricity Plan (NEP) and has invited suggestions, objections etc. from licensees, generating companies and the public for the same, a CEA notification said. After receiving the comments, the Plan would be notified after getting Central Government approval. The draft covers a review of the 11th Plan (2007-12), 12th Plan (2012-17) in detail and perspective Plan for the 13th Plan (2017-22). (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/government-invites-views-to-firm-up-electricity-sector-roadmap/articleshow/12532974.cms)
GOVERNMENT MAY CUT EXCISE ON PETROL TO AVERT PRICE HIKE
NEW DELHI: The finance ministry has indicated to oil companies that it may reduce the excise duty on petrol to lower their under-recovery burden, a move that is expected to help consumers do without an additional burden. Sources said the ministry was “actively considering” a proposal from the oil ministry to reduce duty. At present, the government levies excise duty of Rs 14.45 for every litre of petrol and oil companies are losing over Rs 9 a litre by selling the auto fuel below the international price. Last time the government had lowered excise duty on petrol in 2008 when the international crude price had touched $135. The reduction in duty then was by Re 1 a litre. However, this was restored in 2010-11 Budget. A reduction of Re 1 will help oil companies recover Rs 8,000 crore of under-recoveries. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/government-may-cut-excise-on-petrol-to-avert-price-hike/articleshow/12541683.cms)
DIESEL CONSUMPTION ON THE RISE; DEMAND MAY SURPASS SUPPLY, FEAR EXPERTS
MUMBAI: India’s diesel production will not be able to keep pace with the rapidly growing demand as the government’s pricing policy makes it cheaper than petrol – and even industrial fuels – and has triggered a tectonic shift in the automobile market with diesel cars selling more than their petrol counterparts. Essar Oil, country’s second largest private refiner, believes that Indiawill become a diesel-deficit nation by 2016, as demand will far outstrip supply. “Diesel demand in the country is growing at an annual rate of 8%. At this rate Indiawill need a brand new 9-MT capacity refinery every year, so in-case demand continues to grow this rapidly, Indiawill become diesel-deficit by 2016,” said, Naresh Nayyar, CEO, Essar Energy. This will create big opportunity for private refiners, and we at Essar plan to utilise the opportunity by supplying diesel to oil PSUs,” he added. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/diesel-consumption-on-the-rise-demand-may-surpass-supply-fear-experts/articleshow/12540245.cms)
NO PETROL PRICE HIKE TILL SUBSIDY ISSUES TACKLED
NEW DELHI: In what could give a reprieve to consumers who have been fearing another hike in petrol price, the government has decided to put the proposal in abeyance. According to official sources, oil marketing companies (OMCs) that have pitched for a petrol price hike will have to wait until a decision is taken on subsidy reduction on all regulated petroleum products such as diesel, LPG and kerosene. The government reckons that since a hike in the price of petrol would anyway be opposed by allies like the Trinamool Congress (TC) apart from the Opposition, it would be wiser to face them squarely and use the opportunity to revamp the entire oil subsidy regime. When the price of petrol was last hiked in November, the TC had threatened to quit the ruling coalition. In the interim, OMCs IndianOil, Hindustan Petroleum and Bharat Petroleum may resort to supply cuts to stem losses on petrol. Jointly, these three companies are losing R48 crore a day solely on selling petrol below cost. Government managers have been saying that the plausibility of fiscal consolidation envisaged in Budget 2012-13 hinged heavily on a likely correction in prices of these fuels early this fiscal. Prime Minister’s Economic Advisory Council chairman C Rangarajan has said that measures under consideration included total decontrol of diesel prices or some kind of arrangement under which it is progressively hiked, even while providing a cash subsidy directly to farmers. (For details log on to : http://www.financialexpress.com/news/no-petrol-price-hike-till-subsidy-issues-tackled/932861/)
PHARMA COMPANIES NEED TO HELP PATIENTS ADOPT HEALTHIER BEHAVIOUR: E&Y
MUMBAI: With chronic diseases accounting for three-quarters of all healthcare spending in developed nations, life sciences companies will have to help patients adopt healthier behaviour and manage their diseases better, a report by Ernst & Young has said. Pharma and healthcare companies will be required to fundamentally reinvent their business models to make them more patient-centric and better able to drive behavioural changes in consumers, according to Ernst & Young’s latest annual report ‘Progressions 2012 – The third place: healthcare everywhere’. E&Y said with an increasing chronic disease burden and poor health indicators in India, there is a pressing need to influence patient behaviours to improve health outcomes. Today, India is the world’s diabetes capital with 61.3 million diabetics in 2011 and projected to reach 101.2 million by 2030, coronary heart disease prevalence is projected to increase from 36 million patients in 2005 to 62 million by 2015. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/pharma-companies-need-to-help-patients-adopt-healthier-behaviour-ey/articleshow/12533584.cms)
INDIAN PROFESSIONALS MOST CONFIDENT AT SALARY NEGOTIATIONS: SURVEY
NEW DELHI: When it comes to negotiating a salary hike, Indian professionals are the most confident lot and career-related negotiations are like a game of tennis for many of them, a survey has found. As per the survey conducted by professional networking website LinkedIn across eight countries, Indian professionals are the most confident people in career negotiations like asking for a raise or closing a business deal. “Of the eight countries in which LinkedIn conducted the research, Indiawas the most confident country when it came to negotiating,” LinkedIn said today. About 47 per cent of the nearly 400 professionals surveyed in Indiareported that they feel confident about negotiating. On the other hand, around 24 per cent participants opined that they feel anxious about negotiating. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/jobs/indian-professionals-most-confident-at-salary-negotiations-survey/articleshow/12533021.cms)
COMPARISION BETWEEN IIP AND PMI NOT MEANINGFUL: DIPP
NEW DELHI: The Department of Industrial Policy and Promotion has cautioned against comparing the index of industrial production with the purchasing managers’ index, as startling divergence between the two indices over the past few months led to a contrary reading of the Indian economy. In a research note posted on its website, the department said the methodology used for calculating the two indices was distinct, and hence, a comparison was not meaningful. “As the methodology used for calculating IIP and PMI are different, one being based on actual production data and the other on business expectations, the comparison between the two cannot be made,” the note said. IIP is released by the ministry of commerce and industry. The Purchasing Manager’s Index is compiled by financial information services company Markit for HSBC. Both the indices track the manufacturing sector. (For details log on to : http://economictimes.indiatimes.com/news/economy/indicators/comparision-between-iip-and-pmi-not-meaningful-dipp/articleshow/12540597.cms)
INDIAN OILMEAL EXPORTS VOLUME UP BY 8% IN FY11-12
KOLKATA: The Indian oilmeal export in FY11-12 has clocked a 8% growth in volume and touched a figure of 5,480,083 tons as compared to 5,071,779 tons in FY10-11. In value terms there has been a marginal growth of 1% to Rs 8,300 crore in FY11-12 as compared to Rs 8,200 crore in the previous fiscal, according to the Solvent Extractors’ Association of India. The export of oilmeals during March 2012 is reported at 575,972 tons compared to 579,907 tons in March 2011. Oilmeal import by Japanfrom Indiaduring April 2011 to March 2012 reported at 1,296,436 tons compared to 1,259,870 tons last year consisting of 1,266,840 tons of soybean meal and 29,596 tons of rapeseed meal. Vietnam, another major market, imported 903,554 tons compared to 853,869 tons last year consisting 668,114 tons of soybean meal, 58,715 tons of rapeseed meal and entire quantity of 176,725 tons of rice bran extraction. (For details log on to : http://economictimes.indiatimes.com/news/economy/foreign-trade/indian-oilmeal-exports-volume-up-by-8-in-fy11-12/articleshow/12536199.cms)
TATA-SASOL & JSPL GAINED R 54K CR WITH CAPTIVE COAL BLOCKS
NEW DELHI: Just a day before the Election Commission was set to issue the notification for the 2009 general election, the United Progressive Alliance-I government had hurried to allocate large captive coal blocks to the Tata-Sasol combine and Jindal Steel and Power (JSPL) for their respective coal-to-liquid projects in Orissa, which resulted in an aggregated windfall gain of R54,000 crore to the two companies, according to a draft Comptroller and Auditor General of India report. While the “North of Arkhapal” block was allocated to Strategic Energy Tech Systems, the 50:50 joint venture between the Tata Group and Sasol Synfuels, JSPL was awarded the Ramchandi block. The blocks are estimated to have coal reserves of 1,500 million tonnes each. As per the CAG’s preliminary estimate, the windfall gains (“unintended benefits”, as the auditor qualified later) to the Tata-Sasol consortium and JSPL were R33,060 crore and R21,226 crore, respectively. (For details log on to : http://www.financialexpress.com/news/tatasasol-&-jspl-gained-r-54k-cr-with-captive-coal-blocks/932859/)
INDIA TOP FOCUS FOR REALTY MOGUL, SAYS TRUMP SCION
MUMBAI: American property mogul Donald Trump targets Indiaabove other emerging economies, his son and business partner said, as the flamboyant tycoon looks to crack a notoriously tough real estate industry with his brand of luxury homes and hotels. Trump’s eponymous real estate group expects to sign multiple deals for Indian residential projects and hotel contracts over the next five years, despite a market riddled by regulatory uncertainty and bureaucratic red tape. India, among other emerging markets, is the biggest push for our organisation, Donald Trump Jr, an executive vice president of The Trump Organization, said on Wednesday. Trump, whose portfolio includes projects in South Korea and Turkey, in addition to hotels and skyscrapers in the United States, is close to signing a couple of deals with Indian developers, the younger Trump said without providing details. (For details log on to : http://www.financialexpress.com/news/india-top-focus-for-realty-mogul-says-trump-scion/932822/)
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