Bharti set to buy out partners in Skycell
KolkataBharti Enterprises is acquiring 100 per cent ownership in Skycell its Chennai cellular operation. Officially, the Bharti groups apex holding company, Bharti Televentures, holds 40.5 per cent in Skycell while the remaining 59.5 per cent equity block is collectively held by three partners - Bell South, Millicom of Luxembourg and Delhi-based DSS, who hold 24.5 per cent, 24.5 per cent and 10.5 per cent, respectively.
Sources at Bharti Enterprises said that the legal issues and price negotiations were nearly complete and all three partners had in-principle agreed to divest their stakes in Skycell.
The Bharti Group is expected to rename the Skycell operation within days. "The group is examining several options in this light... it could be either Bharti Mobicom or Bharti Mobinet," sources said.
The 100 per cent ownership in Skycell will pave the way for launching Bhartis 'AirTel' and 'Magic' brands in Chennai by September.
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Tata Power lines up huge investment in broadband plan
MumbaiTata Power has drawn up a Rs 880 crore investment plan for the broadband market.
These include spending Rs 330 crore laying fibreoptic in Delhi, Mumbai, Chennai, Pune and Hyderabad and a further Rs 550 crore linking these cities together.
The company Power has already invested over Rs 100 crore for building an OFC network in Mumbai and around 400-km network is already laid in Mumbai. The company has laid cables for around 200 km towards Pune.
A part of Tata Power's fibreoptic network in Mumbai will be ready for commercial use by next month.
Last week, the company emerged the sole bidder for BEST's right of way to set up an aerial OFC network in Mumbai. It has quoted Rs 110 crore to be paid over a 20-year period.
The company's inter-city plans would require investments of Rs 550 crore and to provide inter-city linkages the company is examining various options of taking up rights of way from Gail, PowerGrid and Konkan Railway Corporation.
Tata Power has just signed a memorandum of understanding with Gail to lay cables along the 10,000 km-long RoW owned by the PSU gas major.
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Telco to launch 49-tonne trucks
Mumbai-- Telco is making an entry into the 49-tonne segment to augment its presence in heavy commercial vehicles.
With the light commercial vehicle segment market showing signs of stagnation, the company is launching trucks with airconditioned cabins, with provision for single as well as double sleepers, later this month. The maximum tonnage of Telco heavy duty trucks is 40 tonnes (model 4021).
Sources say, Telco is currently in negotiations with engine maker Cummins to supply high-powered engines for its top-end trucks, including the soon-to-be-launched 49-tonne vehicle.
Telco's executive director in charge of commercial vehicles Ravi Kant said, "While on one hand we would be offering higher tonnage trucks, we are also working on improving the reliability and durability of the vehicles. We are in talks with Cummins to supply us with high powered engines with improved fuel-efficiency."
At the same time, Telco is also planning to come out with small commercial vehicles (with a capacity of around 2 tonnes) in response to the fragmentation in the light commercial vehicle segment.
At present, Sweden's Volvo is the only manufacturer of 49-tonne commercial vehicles in India.
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ONGC to be restructured into 17 business units
New DelhiThe Oil & Natural Gas Corporation will be divided into 17 small businesses -- akin to strategic business units all operating independently. The restructuring process is to begin next week.
Consulting firm, McKinsey suggested these changes in 1998, which have now finally been put into practice. The change will affect about 1,200 of ONGC's senior managers, most of whom will have new functions and reporting hierarchies. The entire plan would take about a year to implement, said ONGC chairman and managing director Subir Raha.
There will now be greater stress on profitability and increasing reserves instead of maximising production. ONGC's existing functional divisions will be dismantled and replaced by cross-functional groups.
The businesses identified are ONGC's three prize offshore assets -- Bombay High, Neelam and Bassein, seven of its onshore fields and seven exploration fields. Each of these will be run as an independent corporate entity with support from special services like geology, geophysics and finance.
Asset managers will first be appointed in each of the corporates following which the next levels of appointment will be announced," said Raha. The department heads in ONGC have recently been empowered to take independent decisions on projects with increased spends.
The oil major, which posted a profit of Rs 3,220 crore in 2000-01, has been waffling over restructuring for the past several years.
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IFCI in revival plan
New Delhi--IFCI is planning a comprehensive, three-pronged revival strategy.This comes after the government announced a Rs 1,000-crore bailout package for the development finance institution last week.
The revival strategy includes cleaning up the institutions balance sheet, creating a new loan portfolio in line with the new market and industry dynamics, churning its debt portfolio to increase the proportion of liquid securities including SLR securities and rated debt (about 20-30 per cent) and reducing the proportion of long term loans in favour of short-term ones (about 20-30 per cent).
The institution also proposes to diversify risk by taking small exposures not exceeding Rs 20-30 crore in each project and in course of time, enter new areas of non-fund based business such as consulting, mergers and amalgamation and international loan syndication.
IFCI chairman P V Narasimhan said that over the next two years the institution would address two of its pressing problems. This includes concentrating on the asset-liability mismatches which have resulted in the institution facing a liquidity crunch in recent weeks; and completing committed project sanctioned in the mid-90s.
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Nestle to create more shareholder value than other FMCG peers
New DelhiAccording to a research report by Hongkong Shanghai Banking Corporation (HSBC), Nestle India will soon overtake other FMCG majors like Hindustan Lever (HLL), ITC, Britannia, Colgate-Palmolive and Cadbury by 2003-04 in creating value for shareholders backed by a good monsoon this year. The report says all the FMCG players will see an increase in value creation, but the impact will be the highest on Nestle.
The reports said the earnings per share growth was slowing down for all food companies due to rising commodity prices and weak industrial growth but predicted that Return on Invested Capital (ROIC) would increase for all the players in future.
Nestle is expected to have a value spread of 8.8 per cent by fiscal 2004, much higher than other players like Britannia (7.2 per cent), Colgate Palmolive (5.1 per cent), ITC (3.6 per cent) and HLL (3.4 per cent).
The entry of Nestle into new areas like dairy and mineral water held high growth potential, HSBC said, but pointed out that such low-margin businesses could have long gestation for break-even.
Nestle is expected to register a 14.3 per cent rise in net profit of Rs 246.6 crore in fiscal 2003 while ITCs net is likely to stand higher by 13.3 per cent at Rs 1,477 crore over in the next three years, HSBC said. The report revealed two clear strategies of broadening of offering and entry into daily eating habits by FMCG firms.
"Nestles move into the dairy business (milk, clarified butter and yoghurt) and water marks and entry into long-gestation, low-margin businesses with large growth potential," HSBC said.
Britannias foray into low-price point biscuits (tiger) and the dairy business, and HLLs entry into branded wheat flour and salt, endorse that the real market is not occasional consumption items but that which is a part of the daily eating habits of the consumer," it added. Pointing out that there was enormous scope for consolidation, the study said acquisitions in the food sector was plenty but low-ticket, excluding HLL-Brooke Bond. It, however, said since a large number of local players were present in Indian foods like pickles, salty snacks and sweets which have local appeal, larger opportunities exist in branded water/ fruit juices and biscuits, which could be exploited by existing players.
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Wockhardt in global deals for super generic products
Mumbai-- Wockhardt has signed international strategic alliances for two of its super generic drugs, which fall in the cardiovascular and anti-ulcerant segment. The market value for these products in Europe and the US is estimated at $400 million.
Wockhardt chairman HF Khorakiwala said, "We have finalised partners for two products and are in fairly advanced discussions with others for another six or seven products. The products, which fall in the cardiovascular and anti-ulcer segment, will be launched by late next year in the US and Europe."
Loosely defined, super generics are off-patent drugs that have certain technological advantages (for eg. taste masking, rapidly dissolving).
Elaborating on the companys outlicensing strategy, Mr Khorakiwala said that Wockhardts basic approach involves identifying a parter to invest primarily in clinical trials and legal issues involved in generic filings. "Then we would share profits, and our role will be to manufacture and supply such products," he said.
Wockhardt is also in talks to broaden its in-licensing alliance (currently for methycobal for diabetic complications) with the Eisai Company Ltd, Japan.
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IDBI in fix as SBI refuses funds
New DelhiThe IFCI bailout plan is likely to be delayed by a few months as IDBI, a major stakeholder, is in a fix over the Rs 200-crore fund infusion. Apparently the State Bank of India is refusing to inject additional capital into the IFCI.
IDBI, which is planning to raise Rs 3,000 crore through bonds this fiscal, would be able to come up with its share of capital for IFCI only after the first tranche of the bonds issue.
Market apprehensions are that IDBI, which was passing through a difficult phase, might approach SBI to provide it additional funds so as to carry out the bailout in time.
According to the Rs 1,000-crore bailout package announced by the government for IFCI, IDBI with 31.71 per cent stake would have to inject about Rs 200 crore as per the "pro-rata" basis of the Rs 600-crore fund infusion by stakeholders, official sources said.
LIC, GIC and its former arms have 17.47 per cent stake in IFCI and are required to bring in a little over Rs 100 crore. State Bank of India, which has 2.1 per cent stake in IFCI, has to bring in a meagre Rs 12.6 crore although it is flush with funds.
Although other shareholders are likely to bring in their shares of fresh capital, IDBI is facing the twin problem of making higher provisions for its NPAs, which were at over 14 per cent and the capital infusion to IFCI at a time when industry is passing through a difficult phase.
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ONGC waits for govt approval for VRS scheme
Mumbai--Oil and Natural Gas Corporation (ONGC) is waiting for governmental approval for its voluntary retirement scheme. The VRS is one of the initial steps towards restructuring the organisation.
Sources in the oil company said that the proposed VRS would be more attractive than that offered by other public sector oil companies. The company wants to hire young people having high degree of skills.
The average age of an employee in ONGC is around 40 years. The company is specifically targeting those over 50 years of age for VRS.
The proposed VRS would offer the conventional 45 days salary for each completed year of service or for the remaining years, whichever is lower. However, ONGC is considering additional perks to make it more attractive, added the source. "The perks would be worked out once in principal approval is obtained by ONGC," added the source.
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AH Dalmia in bid for 40 percent in Revati Equip
New Delhi--AH Dalmias Renaissance group is keen on acquiring a majority equity stake in the Coimbatore-based Revathi Equipment Ltd (REL) and has submitted a bid to RELs Swedish parent Atlas Copco.
The Delhi-based Renaissance is believed to have placed a bid for the entire 40-per cent stake of Atlas Copco (formerly Chicago Pneumatics) in Revathi, industry sources said here.
When contacted, Renaissance director Abhishek Dalmia declined to comment on the issue. Also, Atlas Copco officials were not immediately available for comments since they were abroad.
Atlas Copco holds a 30-per cent stake in Revathi directly and another 10 per cent via its other Indian subsidiary Atlas Copco India. Revathi is believed to be valued at about Rs 100 crore.
As per the takeover code of the Securities and Exchange Board of India (Sebi), in case Renaissance acquires a 40-per cent stake in Revathi, it will necessarily have to make an open offer to Revathis public shareholders to acquire another 20 per cent stake, thus taking its stake up to 60 per cent, sources added.
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Polaris achieves a first
ChennaiPolaris Software, the Chennai-based software solutions provider, is now the first company in the world to get assessed for the new SEI-Capability Maturity Model called 'CMM Integrated'.
Carnegie Mellon University, which operates the Capability Maturity Model released the new model 'CMMI' last December. It has also decided to phase out the existing CMM certification with the new model.
At Polaris, the first phase of the CMMI assessment is being done for the last one week and is expected to be completed in 15 days. The second and last phase of the assessment will be done after three months. If it gets assessed successfully, Polaris will be the first CMMI certified company in the world.
The company has availed the services of a SEI transition advisory company Synchro Cubed of US.
The CMM is a model for judging the maturity of the software processes of an organisation. It identifies the key practices that are required to increase the maturity of these processes.
The new CMMI version 1.01 provides integrated approach across the enterprise for improving the process while reducing the redundancy, complexity and cost, resulting from the use of separate and multiple capability maturity models.
The core of CMMI is a common set of process areas that applies to all disciplines. Each of the process area provides a model of best practices. To completely design the discipline, process areas unique to a discipline, are also provided.
CMM has been developed under the stewardship of the Software Engineering Institute, a federally funded research and development centre sponsored by the US Department of Defence and operated by Carnegie Mellon University. The CMM is organised into five maturity levels achieved Level 5.
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NIIT and MSN announce website award
New Delhi--NIIT and Microsoft Network have introduced the first personal website award for beginners.
The awardees would get a week's trip to visit Microsoft's headquarters in Remond, Washnigton, a NIIT release said here on Sunday.
The award, instituted by NIIT Swift, offers an opportunity to "Netizens" to own personal websites, it said.
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Tatas sue Jharkhand govt over land lease
KolkataThe Jharkhand government is against giving Tata Steel the right to sub-lease Jamshedpur land to companies like Lafarge and Timken.
The Jharkhand government wants to strike up direct lease agreements with all the `non-Tata companies and wants Tata Steel to provide all infrastructure and municipal services electricity, water supply, housing all the same.
Tata Steel, however, is unfazed by the Jharkhand governments idea. It has already moved the Ranchi High Court, seeking early resolution of lease renewal for Jamshedpur, hanging fire for the last five years.
Tata Steel has also sought the right to sub-lease land to non-Tata companies like Lafarge and Timken, within the old leased area. It is only against such a lease agreement that Tata Steel would provide infrastructure and municipal services to the sub-lessee.
The steel company has said that the land for the steel township was leased in perpetuity by the British government, to the Tatas almost a century ago. Subsequently, the Bihar government had put in periodic renewal clauses which last expired about five years ago.
The State governments view will be heard by the court and a final decision on Tata Steels lease renewal issue for Jamshedpur is expected soon.
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Accounts of four paging firms frozen
Mumbai--The Arbitral Tribunal has, in an interim injunction, stipulated that four Easy Call group companies - Matrix Paging India Pvt Ltd, Easy Call Communication (I) Pvt Ltd, TeleSistem (I) Pvt Ltd and ABC Communications India Pvt Ltd should not dispose of or deal with assets and operate any of their bank accounts anywhere in India except for payment of salary and day-to-day expenses, without leave of the Tribunal.
The interim injunction was for non-payment of dues totalling Rs 4 crore exclusively of interest to Casio India Ltd.
Casio India had supplied pagers to these companies on credit basis to be paid in four installments of 90 days, 120 days, 150 days and 180 days from the date of invoice. Casio made a claim of a total of Rs 4.18 crore on all four group companies towards the principal sum. In return, Matrix and Easy Call Communications had made a counter-claim of around Rs 6.43 crore towards quality dispute regarding the goods delivered.
Matrix was asked to pay a total of Rs 67.50 lakh with half of the amount on or before May 31, 2001 and the rest on or before June 30,2001. Similarly, Easy Call Communications, TeleSistem and ABC Communications were asked to pay Rs 45 lakh each, with payments to be paid in two installments of Rs 22.50 lakh as in case of Matrix.
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Sun launches Smoquit
MumbaiSun Pharmaceuticals has launched Buproprion, the smoking cessation drug at a huge discount over the price at which its inventor GlaxoSmithKline sells the drug.
Sun will market Buproprion at Rs 13.50 per tablet as compared with Rs 40 per tablet at which it is available in the market, the company said. Glaxo India launched its drug Zyban earlier this year.
Buproprion, the first pharmacotherapy ever available for the treatment of smoking cessation, is a prescription drug and is required to be taken under medical supervision and guidance.
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