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Tata-SIA reconsidering viability of Air-India
New Delhi--
The Tatas and Singapore Airlines consortium, the sole bidder left in the fray for the state-owned carrier, admitted for the first time that it was reconsidering its offer for Air-India.

There have been several reports in the past two weeks that SIA may withdraw its offer for A-I though the Singapore based airline refrained from a denial saying that it had neither withdrawn its bid nor had made a final offer. The Tatas, however, had all along emphatically denied the reports.

The Tatas are now close to reaching a conclusive decision on the offer to be made to the government for Air-India.

The exact reason for the combine having second thoughts on the offer for A-I has also been a subject for wide speculation. The factors however, could not be ascertained reliably.
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Centurion Bank on look-out for merger
MumbaiA merger of Centurion Bank with a stronger bank is increasingly looking inevitable now and is an option being actively explored by the Centurion management.
When Centurion Bank took over Twentieth Century Finance Corporations (TCFC) assets in 1998-99, one of the clauses incorporated into the deal was that if the level of the banks non-performing assets crossed a particular level as a result of the assets taken over from TCFC, the promoters would have to fill the losses.
Now the critical limit of close to Rs 50 crore has been crossed and Centurion Banks promoters will have to bring forward roughly Rs 40 crore to compensate for those losses and the first tranche of Rs 25 crore would have to be brought in within the next two months.
Centurion bank with its foreign partners Keppel of Singapore on its back is understood to have knocked on the doors of HDFC Bank for an allstock merger.
The buzz in the market is that the swap ratio could be 1:22, that is, one share of HDFC Bank for every 22 shares in Centurion Bank.
Both sides have, however, denied that they have held any such talks.
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Indo Rama asks Maharashtra government for economic package
Mumbai--Indo Rama Synthetics, embarking on a Rs 600-crore expansion plan at the Butibori plant near Nagpur, has asked the Maharashtra government to provide an economic package comprising exemption of sales tax on purchase of plant and machinery, works contract tax, subsidised power at Rs 2.50 per unit from MSEB and extension of package scheme of incentives.

The company also wants additional investment of Rs 600 crore frpm the government during the second phase of expansion.

The minister for textile and labour, Satish Chaturvedi said that the state government has asked the Indo Rama Synthetics management to submit a detailed project proposal and the government would "sympathetically" consider granting of host of concessions based on this proposal. The company is expected to submit the necessary proposal within a fortnight.

He said that the Indo Rama management has been convinced by the government not to consider the neighbouring Karnataka as another option but to carry out expansion only in Maharashtra.

The Indo Rama Synthetics, which has so far made an investment of over Rs 1,800 crore in setting up a plant at Butibori, proposes to carry out expansion in two phases with the total capacity addition of 3,50,000 tonnes per annum (TPA).

In the first phase, the company plans to set up 1,50,000 TPA of polyester staple Fibre (PSF) plant and 30,000 TPA of polyester filament yarn (PFY) plant with a total investment of Rs 600 crore.
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JP Morgan Chase to cut 8,000 jobs
New York--J P Morgan Chase & Co, the second-largest bank in the United States, is cutting 8,000 jobs in view of the sluggish market conditions. The, bank had earlier decded to eliminate about 5,000 positions.
The reduction would represent about 8 per cent of bank's workforce of about 100,000 unnamed company sources said.
Company spokesman Joe Evangelista declined comment on the report.
J P Morgan's business has come under intense pressure this year as a result of the slowing economy and significant downturn in financial markets. Last month, the company reported that second-quarter earnings fell by more than 76 per cent as the bank faced steep declines in fees from underwriting and stock trading and big losses in its venture-capital division.
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Sahaganj operations of Dunlop suspended
Dunlop India Ltd under the management of M R Chabria has suspended operations at its Sahajganj factory once again.Salaries at the factory have not been paid from January.

The management has cited failure by the Board for Industrial Finance and Reconstruction (BIFR) to approve the IDBI-prepared draft rehabilitation scheme and violent demonstration by the unions at the factory as the major reasons for suspension of operation. The management says work would remain suspended till the situation comes under control.

The unions at the unit allege lack of initiative on the part of the management to keep the unit running had resulted in the closure.

Company officials said the condition of plant and machinery being worse than anticipated, almost two and a half months were spent on plant maintenance with no production. Thus, funds were exhausted in salary payment without production.

In January 2001, the unit was operated for 25 days but funds arranged by the promoter last year to start operations as a prelude to approval of the rehabilitation scheme was eroded. Operations at the factory continued below break-even with mounting cash losses.
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CCI signs pact with private players
Cement Corporation of India Ltd (CCI) the public sector compnay has is on the look out for other cement companies with good distribution network to lift its output on a regular basis. And it has entered into a selling arrangement with cement majors to improve the viability of its plants.

CCI chairman and managing director K Teckchandani said,"We believe this kind of marketing arrangement will help CCI to operate the plants at full capacity and will also ensure higher returns while divesting," he said.

Recently the company has entered into a strategic alliance with two cement companies Zuari Cements and Grasim Industries for marketing the cement produced by its Tandur plant. Each of these companies will sell the cement manufactured by CCI Tandur as their own brand. The alliance partners have extended an unsecured advance of Rs 1 crore each, refundable after one year, which will be utilised for plant technology upgradation to reduce the manufacturing cost. The company requires about Rs 8 crore for such an upgradation.

As per the agreement, both Zuari and Grasim will have to lift each 35 per cent of the production capacity while the remaining 30 per cent will be marketed by CCI independently. "Zuari will market in AP, Tamil Nadu, Pondicherry and Kerala and Grasim in Maharashtra and Karnataka," he added.

This tie-up will help the company register a total turnover of Rs 240 crore during the current year against Rs 70 crore last year, the CCI chairman said.

However, CCI will have exclusive marketing rights within 100 km around Tandur. It will also compete in the Hyderabad market, Mr Teckchandani said.
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Modi Entertainment ambitious broadband plans ahead
New Delhi
Modi Entertainment Network (MEN) is riding piggyback on Bharti Enterprises and the neighbourhood cable operator to bring an ambitious broadband hook-up to nearly half-a-million homes in the next few years.
President and managing director MEN, Lalit Modi, said the company was targeting close to 70 cities all over India.
MEN has already tied up with 1,280 cable operators across these cities to provide broadband internet services. The company has started commercial operations in Pune with the launch of MyNet Internet services as a pilot project.
Once up and running, MEN will provide the complete range of television services over broadband. It also plans to offer telephone services over the cable as and when the government opens up such services to private operators.
Modi said MEN is tapping cable operators with a minimum subscriber base of 1,000 so that it can pump in a minimum of Rs 1.40 crore per operator to upgrade his coaxial cable ink to broadband.
This ambitious project is in direct competition to cable services provided by the Zee Networkowned Siticable, Indcable of the Hindujas as well as the massive fibre-optic-based broadband backbone being set up by Reliance Infocom.
Through his broadband alternative through the co-ax route, Modi hopes to lure in a host of Internet service providers and big telecom companies to retail their services to Indian households as a one-stop shop, Modi said.
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Zee reinvents itself
New Delhi--
Zee Telefilms Ltd has charted an ambitious plan of overhauling all the Zee Network channels over the next six months.

The rahauling is to start with flagship Zee TV, which will don a new make-up with a new programme line-up.

The brandbuilding exercise includes the launch of a high-powered advertising campaign with an estimated budget of over Rs 10 crore. Zee will also have an international beam which will attempt to air most programmes concurrently in various geographical markets, in over 80 countries.

Sandeep Goyal Chief (broadcasting) Zee Network said,"The Zee Network (comprising 15 channels) is reinventing itself. Since Zee TV is the flagship channel, the prime focus would be on it."

In an interview, Goyal admitted that the Zee TV had tumbled a bit in the last one year.

"By November, we are re-staging Zee Music, Zee Cinema and Zee English and by early October, we are re-staging Zee News," Goyal added.

Though, Goyal refused to divulge the amount of money being spent on the ad campaign and on new programming, he admitted that the company was "supporting the initiative" with the requisite amount.
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DPC alleges bias by Merc member
Enrons subsidiary the Dabhol Power Company (DPC) has made a petition in the Mumbai High Court citing bias on the part of the Maharashtra Electricity Regulatory Commission (Merc) as an additional ground in its petition for deciding whether the regulator had jurisdiction to adjudicate its $48 million payment dispute with state electricity board (MSEB).

In a related development, a consortium of DPCs international lenders, who have lent $444 million for the 2,184 mw project, filed an application to intervene in the matter.

DPC alleges in its petition that Merc member Jayant Deo on several occasions had espoused views highly critical of the power project and the PPA. It raised objection over Mercs jurisdiction alleging Deos connection with Mumbai Grahak Panchayat, an anti-Enron consumer body.
DPC told the court that Deo, a research director with the Grahak Panchayat, in a release on January 23, 1994, said that the PPA was "patently illegal" and it should be revised.

DPC prayed for a direction by the high court to declare Deo and two other members, P Subramanyam and Venkat Chary as biased.

Citing newspaper reports, DPC alleged that Deo had also presented a memorandum to the then deputy chief minister and Maharashtra energy minister Gopinath Munde who was heading the review committee in 1995. Deo had also lobbied with the government against the project and the PPA.

According to DPC, Deo had also turned to the cancellation of the $3 billion power project by the state government on August 2, 1995.

Relying heavily on newspaper reports from 1995 onwards, the multinational cited several instances to show Deos alleged bias and his disapproval of the project.
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domain - B : Indian business : News Review : 21 Aug 2001 : companies