Atlas Copco and Chicago Pneumatic to merge
Mumbai: The boards of directors of Atlas Copco (India) Limited -- which has factories in Dapodi at Pune, for the assembly of screw compressors and manufacture of construction tools, rock drills and mechanised drill -- and Chicago Pneumatic India Limited -- which has factories in Mulund, Mumbai for manufacturing/assembly of industrial and construction tools, in Nashik (in Maharashtra) for manufacture of reciprocating compressors and tools, and in Halol (in Gujarat) for manufacture and assembly of screw compressors -- have approved the merger of the two companies.

Well known chartered accountants, S B Billimoria & Co, have been appointed to do a valuation and recommend the share exchange ratio.

The boards expect substantial benefits from the rationalisation in areas of finance, administration, logistics and also from better coordination of product development and manufacturing resources following the merger. The sales and service organisations in the Indian market of both companies will be operated as separate divisions to service their brands.
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Kothari Sugars to restart operations
Chennai: The Kothari group, which faces a severe cash crunch due to its mounting debt burden and the drop in the average selling price of paranitro chloro benzene and orthonitro chloro benzene, has ensured that group company Kothari Sugars and Chemicals Ltd. (KSCL) recommences operations at its Karaikal petrochemical division recently.

The company, which came under the purview of the Board for Industrial and Financial Restructuring (BIFR) last year when its accumulated losses exceeded Rs. 100 crore, has seen a positive contribution from its sugar division during 1999-2000, according to reliable sources. About 2,600-2,700 tonnes of sugarcane were crushed per day during the current season, compared to about 2,200 tonnes last year. The season is likely to be closed during the first week of June to ensure optimal sugar recovery. Company estimates peg recovery at about 9.4 per cent.

Following an engineering study, the monochloro benzene plant has started operations and is running at 70 per cent capacity. The high benzene cost has been a limiting factor. However, the plant which was shut down has now commenced production, and the market, for which there is a ready demand of 250 tonnes per month, is perking up.

The company is also said to have initiated several austerity measures in view of the cash-crunch. During the year, manpower has been brought down by 60 per cent through voluntary retirement programmes, retrenchment and individual negotiations. The VRS expense of Rs. 1.75 crore has been met from internal accruals.
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IL&FS venture capital outfit posts profit
Mumbai: IL&FS Venture Corporation Ltd. (IVC), earlier known as Credit Capital Venture Fund (India) Ltd. before it was made a subsidiary of Infrastructure Leasing and Financial Services Ltd. (IL&FS), has reported a net profit of Rs. 3.60 crore for the year ended March 2000, representing a growth of 140 per cent over last year's net profit.

The board of directors of the company has, in view of the improved performance, and taking into account the future outlook, declared a maiden interim dividend of 15 per cent.

Since taking over the erstwhile company which had accumulated losses of over Rs. 18 crore, IL&FS initiated and completed intensive restructuring of the management, business and capital structure. Now, it emerged as a leading technology-centric fund manager in the country, the release said.

Mr. Hetal Gandhi, managing director of IVC, mentioned that most of the investment decisions made in the last two years are yielding good results, and he expects at least four divestments during the current year.

While fees from management of funds constitute the core income for IVC, the company expects to earn good returns from its investments in some of the funds managed by it. In addition, IVC is also entitled to carry on the funds managed by it in the event the returns achieved by such funds are beyond defined limits.

IVC expects to launch its new `India iCapital Fund' in June with a target corpus of $150 million, in partnership with a leading private equity institution in the US. The fund would be focusing on India-centric companies, independent of their place of incorporation.

IVC is also in the process of putting together an incubator framework for first generation entrepreneurs and expects to launch its portal `www.fundyourideas.com' by September.
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Cabletron launches e-solutions outfit
Bangalore: Keeping in line with its recent worldwide initiative to transform its businesses through the formation of four independent operating companies, Cabletron India today announced the launch of Enterasys Networks, an independent entity of Cabletron Systems.

According to Mr. Gary Workman, president, Asia-Pacific, Cabletron Systems, Enterasys will exclusively focus on delivering strategic e-business solutions to global enterprise customers. Cabletron is focussing on key high-growth areas in the communications market place such as service provider, enterprise e-business, professional services and infrastructure management. The new outfit will offer a new approach to enterprise networking and enable customers to derive competitive advantage through their e-business infrastructures.

Cabletron's country manager for India and Saarc, Mr. Uday Birje, said that the launch of Enterasys Networks in India is an indication of our focus and commitment to the enterprise customers in this country.''

Enterasys has already announced the launch of the Matrix series of ``next-generation, high-performance intelligent access products.'' The Matrix E7, the first product of the series, delivers breakthrough performance and pinpoint control for enterprise networks, enabling businesses to maximise e-business and Internet-based opportunities.
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Madura Garments to launch more mega stores
Mumbai: Madura Garments, a division of Indian Rayon & Industries which has targeted to achieve a turnover of Rs. 500 crore by 2002-2003, will be setting up 8-10 more all-trouser mega stores as a brand called Trouser Town across the country during this year. The company has already set up two Trouser Towns, one each in Chennai and Ahmedabad. The company will be launching another two in the next month.

The mega store will include all brands of Madura Garments. The company will be using brand name Trouser Town for its mega stores.

The division has the aim of being India's leading clothing company by meeting world class standards, concentrate on quality, customer service, design and brand equity and through empowerment of employees.

The company's business strategy for 2000-2001 will be to consolidate and leverage current brands by adopting product strategy, retailing strategy and branded exports.

Madura Garments essentially has three businesses premium brands -- which include Louis Philippe, Van Heusen and Allen Solly-- , mid-priced brands -- like Peter England, SanFrisco and Byford -- and contract exports.
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Hughes Software to go the convergence route
New Delhi: The Indian subsidiary of the US-based GM-Hughes Electronics Corp, Gurgaon-based Hughes Software Systems, has decided to refocus its activities on the convergence market and has set up three sub-groups in this regard.

The three sub-groups, set up recently to exploit the opportunities emerging out of convergence and mobility, will include the next generation Networks business, the wireless networks business and the professional services business or the consultancy division.

The company believes that there is convergence happening on multiple fronts and has decided to focus on the opportunities which arise from there like the Next Generation Networks business which offers voice over IP solutions.

Hughes Software is also slated to launch shortly globally a new product, Bluetooth. It is a personal area wireless networking standard, which is a low-power, short-range, wireless technology designed for local area voice and data communications.
The professional services business provides software design and development services to enable development of communication technologies and e-commerce applications and solutions.
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Arvind Mills appoints Jardine Fleming for debt restructuring
Mumbai: Arvind Mills, which focussed entirely on the denim and textile sectors and which is currently struggling to meet its huge repayment obligation due to adverse textile demand, has appointed Jardine Fleming to work out a detailed debt restructuring plan.

The restructuring exercise would include reschedulement of interest payments on both domestic and foreign exchange loans and a possible lowering of interest rates on some of the loans.

A 20 per cent drop in international denim prices - the denim business contributes over 50 per cent to the company's turnover - has taken a toll on both its revenues and the bottomline. It hence posted losses of Rs 125 crore for the first three quarters and is expected to end the fiscal with total losses of around Rs 200 crore.

The reschedulement of loans, if approved by its lender consortium, will lower the cash outflow for the current year. During 2000-01, Arvind Mills has committed an obligation of Rs 300 crore, with the amount remaining at the same levels for the following year as well. The ECB and the FRN comes up for redemption in 2005 and 2004, respectively.

The company has already formed all its 60 lenders regarding the debt reschedulement plan. The lenders, in turn, has formed a smaller representative group of 10 who represent 55 per cent of all debt and 85 per cent of all lenders. The group includes Union Bank of Switzerland, which is the single largest lender with an exposure of Rs 420 crore.

The company had earlier in the year spun off the garments business into a wholly owned subsidiary to improve the cash flow in Arvind Mills.
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Voltas thinking of spinning off air conditioner unit
New Delhi: In a report appearing in the Business Standard, Voltas Ltd., a Tata group company, is believed to be spinning off a part of its air-conditioning business into a separate entity, in order to form a joint venture for the unitary products such as room and split air-conditioners. The company is said to be in talks with leading Chinese consumer electronics majors for the proposed joint venture.

A high level company team, currently in China to participate in the Chinese Export Commodities Fair, being held at Guan Gzhou, is expected to hold exploring talks with some more Chinese brown goods companies on the proposed joint venture for AC business.

Under the proposed plan, the heavy equipment and packaged systems (for central air-conditioning) and water coolers under the air-conditioning and refrigeration business group is to stay with the company.

Company officials, however, have denied any such move and said "it is a speculation by the competition".

Currently, Voltas Ltd. has three major business divisions under it - air-conditioning & refrigeration, engineering products & projects, and chemicals trading. Besides, Voltas also has several wholly-owned subsidiaries, including Voltas International Ltd., which undertakes central air-conditioning and electro-mechanical works, Perfect Moulds Ltd. and Voltas Switchgear Ltd.

Meanwhile, in order to further downsize manpower, Voltas has offered a fresh voluntary retirement scheme to its employees. According to sources, the plan is to reduce the employee strength by about 1000 from the current level of about 6000.
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ITC hikes outlay for hotels division
Calcutta: FMCG major, ITC Ltd. has hiked the funds earmarked for investment in its hotels business by 300 per cent to Rs 2,000 crore from Rs 500 crore. The extra allocation has therefore been made to meet rising costs associated with projects in the hotel industry in general.

According to ITC hotels spokesperson, ITC chairman Y C Deveshwar has made it clear that existing hotels within the group could avail of the option of upgrading their properties in order to make them worthy of the ITC prefix, by offering international standards of service.

ITC Hotels flagship brand Maurya, which recently had the honour of hosting the US President, Bill Clinton, has been prefixed with the name ITC.

ITC Hotels is close to renovating the Maurya Sheraton's new wing, which has plenty of international features such as Internet connections in all rooms, silk lined walls, special flooring, plush rigs, jacuzzis, separate baths and shower closets. The rooms are also larger than the average.

The company's Mumbai project at Andheri east (a suburb of Mumbai), is moving towards completion and is slated to be formally opened in October this year. Construction work at the second hotel at Parel (also a suburb of Mumbai), has just begun.

At the moment, projects entailing investments in excess of Rs 700 crore are under implementation. These include the Rs 450 crore 400-room project at Mumbai, construction of a 80-roomed tower at Rs 51 crore and the Rs 180 crore, 220-roomed joint venture with Ansal group at New Delhi.

The group has further envisaged two new projects at Bangalore and Chennai, respectively. While land has already been acquired in Bangalore, it has yet to be identified at Chennai.
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