Enron sets $1-b floor price for DPC
New DelhiEnron has pegged the price of its stake in the Dabhol power project at a minimum of $1 billion. This is the price pegged for the 2,184-mw plant by the US energy major.
Enron India managing director K Wade Cline said that the buyer would have to meet the additional cost of completing the project.
Having clarified that it was willing to sell out at "cost price" Cline said this did not include the cost overrun for its delayed completion.
He added that the company had no intention of putting any more funds into the project or complete the project before putting it on the block. He said, "We already run $1-billion risk, and we dont want to increase it."
Enron was, however, willing, he said, to give technical and vendor support assistance to the buyer to complete the project. "We want to get out of the project but if the government accepts our offer of sale we are willing to complete the project before we hand it over," Cline said.
Back to News Review index page  

Govt asks Dabhol to offer power at Rs 3 per unit
New Delhi--Even as Enron indicated a final tariff of Rs 3.59 per unit after various fiscal concessions are offered to it, the centre wants the Dabhol Power Company (DPC) to cut its power cost to Rs 3 per unit.
Senior official sources in the power ministry said financial institutions, including IDBI and ICICI, told the nodal ministry that the Dabhol power cost can be brought down to less than Rs 3 a unit if Enron can re-negotiate its LNG and shipping contracts.
"Even though Enron maintains that the cost of power cannot be brought down below Rs 3.59 per unit, FIs feel that this can be achieved if LNG suppliers can take a hit of 5-10 per cent. If Enron can re-negotiate its shipping as well as LNG contracts, the tariff can be brought down to less than Rs 3 a unit," the sources said.
FIs are in the process of working out a package for saving the controversy-ridden $2.9 billion Dabhol power project. This move comes close on heels of Enrons decision to pull out of Indias power sector.
Back to News Review index page  

Hutch moving towards taking significant stake in Aircel
MumbaiAfter the fourth cellular licenses have been awarded, Hutchison, the Hong Kong-based conglomerate, is moving towards picking up a stake in Essar Group owned cellular operator Aircel Digilink.
Reliable sources said that the two sides were in advanced discussions on the issue though no final figure has been agreed upon.
Aircel Digilink operates cellular services in Rajasthan, Haryana and Uttar Pradesh (East) and also claims to have the rights to operate Punjab, though it is locked in a dispute with the Department of Telecommunications in the state.
Highly-placed sources said even though Hutchison was serious only about the Punjab circle, it had agreed to pump money into the other three circles as well owing to its "long-term relationship" with the Essar Group which has been its partner in the Delhi circle as also in the recently acquired circles of Chennai, Karnataka and Andhra Pradesh.
Also Hutchison is keen to have an all-India presence. It has already made strong inroads into the south, has a significant presence in western India and has all the four metros under its belt.
Aircel Digilink is trailing its rival in all the three circles by a very large margin. For example, it has 12,000 subscribers in Haryana as against 54,000 of Escotel. In UP (East) it has 38,710 subscribers as against 99,000 with Koshika and in Rajasthan, Aircel Digilink has 16,000 subscribers as against 56,000 by rival Hexacom. While Escotel has got the fourth operator licence for Rajasthan and UP (East) for Rs 32.25 crore and Rs 45.25 crore respectively, the Haryana circle has gone to Bharti for Rs 21.5 crore.
Back to News Review index page  

GM wants to acquire Daewoos business in India
New Delhi--General Motors (GM) is keen to acquire the Indian operations of Daewoo Motors.
GM, earlier this week, made a proposal to acquire Daewoo Motors two plants in Korea Kunsan and Changwanand one plant each in India (Surajpur), Vietnam and Egypt out of the Korean carmakers 15 units worldwide.
Daewoo has only one plant at Surajpur in India, which has an annual production capacity of 72,000 cars. It employs 1,951 workers, of whom 1,526 are unionised.
Daewoo has so far invested around Rs 4,000 crore in the manufacturing subsidiary, which rolls out the small car Matiz and the bigger passenger cars Cielo and Nexia.
Back to News Review index page  

Govt stakes valued in IA at Rs 73 crore, AI, Rs 241 crore
Mumbai--The department of disinvestment (DoD) has valued the stake being divested by the government in about 13 PSUs at just Rs 3,915 crore. The valuation, proposed in an internal DoD document of May 2001, is based on the net worth of the companies on March 31, 2000.
For instance DoD has valued the 51 per cent stake to be sold by the government in Indian Airlines at Rs 73 crore and it is expecting Rs 241.18 crore from selling the governments 40 per cent stake in Air-India.
The net worth of Air-India was estimated at Rs 401.97 crore for the year ended March 2000, while that of Indian Airlines was Rs 142.53 crore. At present, the government holds 100 per cent of the equity in both airlines. The governments 53 per cent stake in Videsh Sanchar Nigam Ltd (VSNL) and wants to offload 26 percent has been valued at Rs 1,543.56 crore on the basis of the companys net worth of Rs 6,174.22 crore.
The government holds 59.95 per cent in IPCL and is diluting its stake by another 25 per cent, which has been valued at Rs 740.26 crore.
The divestment in all the four companiesIndian Airlines, Air-India, IPCL and VSNL was initially scheduled for the current fiscal.
Back to News Review index page  

Hindujas unwilling to abandon race for Air-India
New DelhiThe Hinduja brothers, three of whom face trial on charges of receiving illegal payments for government arms sales, tried to stay in the bidding for India's State-run airlines, rejecting all such charges made against them.
Said R J Shahaney, chairman of Chennai-based bus- and truck-maker Ashok Leyland, which is collaborating with the Hindujas on the bid,
"It is the Hinduja brothers who face charges in the Bofors trial, not the entire Hinduja group," he said.
The Hinduja brothers, whose interests span media, banking and oil, have been accused of receiving illegal payments from Sweden's Bofors in a $1.2-billion arms sale to the Indian Army in 1986.
The government has now to decide whether to accept the Hindujas reply.
A consortium led by Ashok Leyland, the Hindujas' flagship company in India, has put in bids for the two airlines on the block. The consortium comprises Ashok Leyland, Hinduja Finance Corporation and an overseas corporate entity, Machen Development Corporation.
Singapore Airlines, bidding in tandem with India's Tata Group, has submitted the only other bid for Air-India.
Back to News Review index page  

Jindal mulls selling 49 percent stake in IT co to US investor
New DelhiThe O P Jindal Group is planning to sell off 49 per cent stake in its IT company, Cross Border IT (India), to a group of US-based investors.
The Jindal Group completely owns Cross Border IT (India), set up as a wholly owned subsidiary of Jindal Strips.
According to sources, Jindal Strips has already transferred its equity to a newly-incorporated group company in the US - Cross Border IT -- which, in turn, will offload the minority stake in favour of a group of high-profile investors there.
Sources said though the final holding structure of the new company was still under finalisation, the Jindals are planning to sell off up to 49 per cent stake in their IT company to the US investors.
Sources said Cross Border IT would be mainly looking in the telecom, media, and entertainment sectors, besides the e-enabled services for project development projects and the company is mainly targetting to US market to generate a major part of its new businesses.
Back to News Review index page  

Electrolux wants to increase Kelvinator stake to 78 percent
New Delhi--AB Electrolux, the Swedish appliances major, wants to have a shareholding between 76-78 per cent in Electrolux Kelvinator Ltd (EKL) after its two other subsidiaries -- Electrolux India Ltd and Intron Ltd -- are merged into EKL. It has thus filed an application with the secretariat of industrial assistance (SIA) in the commerce and industry ministry seeking for the governmental nod for increasing its holding in EKL to 78 per cent, following requisite clearances from the High Court and other regulatory bodies. Electrolux currently holds a 56 per cent stake in EKL. Till now Electrpluxs shareholding has never crossed the 56 per cent mark.

Electrolux India has filed the required application with the foreign investment promotion board (FIPB).
The FIPB is expected to consider the proposal at its meeting on Thursday, government sources said. The administrative ministry has already given the green signal to the scheme, it was learnt.
While AB Electrolux has around 56 per cent shareholding in EKL, Harish Kumar of Maharaja Appliances holds 26 per cent and the remaining is widely held. EKL is listed on the Bombay Stock Exchange. The joint venture manufactures refrigerators under the Electrolux, Kelvinator and Allwyn brandnames at its Shahjahanpur facility.
Back to News Review index page  

Bayer pulls out cholestrol drug globally
Mumbai--German multinational, Bayer, has decided to withdraw all dosages of its cholesterol-lowering drug, branded Baycol (Lipobay in India), throughout the world, except Japan, with immediate effect.
Bayer has, in an official statement, said that this voluntary action was prompted by "increasing reports of side-effects involving muscular weakness (rhabdomyolysis), especially in patients who have been treated concurrently with the active substance gemfibrozil, despite contraindication and warnings contained in the product information." Japan is unaffected by this move because gemfibrozil is not available there.
Bayer had launched Lipobay (cerivastatin) in India around nine months ago, though the launch was restricted to around 10 cities. Analysts peg Lipobay sales (March to June 2001) at around Rs 15 lakh, while sales of competitor Torrents brand, Seriva, are also in the same region.
Back to News Review index page  

DoD wants 3rd valuation of IPCL plant
New Delhi--The department of disinvestment (DoD) has asked the Cabinet secretariat to come up with a third valuation of the Vadodara plant of Indian Petrochemicals Corporation Limited (IPCL).
The secretariat has been asked to discuss with IPCL and Indian Oil Corporation (IOC) their valuations of the plant along with the assumptions on which they are based and then come up with an independent estimate of the plants value.
If IOC refuses to buy the plant at the price fixed by the Cabinet secretariat, the government can go in for an international competitive bidding for all the three plants of the company.
The dispute over the valuation of the plant has held up IPCL disinvestment for quite some time now. Negotiations between the two companies started in November last year when the Cabinet Committee on Disinvestment allowed IOC to buy the Vadodara plant. However, there was a very wide difference in the plant valuations arrived at by the two companies.
The problem is arising as IPCL is including the annual Rs 260 crore sales tax benefit which is likely to accrue to IOC after the sale, as also the increase in production which will result from restarting the polypropylene plant after the sale in its valuation of the plant.

But IOC feels that since it has to scrap the plant and build a new naphtha cracker, the valuation should not be very high. IOC has fixed the plants value in the region of Rs 300 crore.
Back to News Review index page  

Birla Corp abandons readymix concrete plan
Kolkata-- The Rs 1,021-crore diversified Madhav Prasad Birla group flagship, Birla Corporation, has forsaken its plan to produce ready-mix concrete after its joint venture partner lost interest in the manufacturing project.
The company had floated a joint stock firm - Birla Redland Readymix- in association with Redland Plc, UK, on January 21, 1997. However, the project did not make much progress as the promoters of the joint venture decided to keep the ready-mix concrete project in abeyance and in 1999-2000, the company commissioned a feasibility study.
Now Birla Corporation has decided not to pursue the project because according to it "the foreign partner was unwilling to carry on further.
In the company's annual report for 2000-01 it added: "Redland Plc, UK, the joint venture partner, is not optimistic about the prospects of ready-mix concrete in India and hence have intimated their unwillingness to go ahead with the project."
Back to News Review index page  

Ranbaxy receives $17-m from Eli Lilly
MumbaiRanbaxy Laboratories, claims to have received about $17 million from US drug giant Eli Lilly in return for selling its 50 per cent stake in a joint venture and the former said in a statement it would continue to manufacture some of Eli Lilly's products at its facilities.
The Indian firm announced in January it would sell its stake in the joint venture -- Eli Lilly Ranbaxy -- to the US drugmaker which owns the other half of the firm and said it preferred to invest in its own operations.
Back to News Review index page  

More fast food brands head for India
Mumbai--Two more large Yankee fast food companies, Long John Silver and A&W restaurants are getting ready to launch operations in India next year.
The two brands belong to the $1.2b Yorkshire Global Restaurants, which has a presence in 22 countries across the globe.
Long John Silver, specialises in seafood and is likely to be Indias first quick service seafood chain. While A&W specialities are Coney hot-dogs, burgers, chili cheese fries and a variety of vegetarian products with draft root beer and root beer floats.
The food served will be a part of the original menu creation but will be modified to suit Indian taste and culture.
The first outlet will be launched either in Mumbai or New Delhi and will open by June 2002.
YGR plans to expand in India later through its regional master franchisee, CLA restaurants.
Back to News Review index page