Sterlite board accepts Arthur Andersen report, demerges telecom division
Mumbai: Having announced its board approval of Arthur Andersen's recommendation to demerge its telecom business, the board of Sterlite Industries today accepted the consulting firms recommendation on the 1:1 share ratio for its proposed telecom demerger. The appointed date of demerger will be July 1, 2000 and the process of the getting required approvals, including that of the High Court have been initiated. The equity capital of the new telecom company will comprise 5,59,12,559 equity shares of Rs.5 each aggregating Rs 27.95 crore.

The company has formed a new telecom company -- Sterlite Telecom Systems Ltd. (STSL) -- which is being positioned as a telecom infrastructure solutions provider that will leverage its market leadership in optical fibre to align with strategic partners for offering telecom turnkey solutions, networking bandwidth and telecom software.

Sterlite, which has a strategic alliance with the French telecom major Alcatel to address telecom opportunities in India, said the two companies would together provide turnkey networking solutions to operate optical fibre bandwidth for convergence of technologies.

The face value of a Sterlite equity share after the demerger of telecom business will be reduced to Rs.5.

The board of Sterlite have also accepted Arthur Andersen's and Ernst & Young's valuation reports proposing 2:1 share exchange ratio for Madras Aluminum Company Ltd. (Malco) merger with Sterlite.
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Kirloskar group splits and re-organises
Pune: Mr. Vijay R. Kirloskar has been separated from the group to pursue his own vision and business goals. The companies under Mr. Vijay Kirloskar included Kirloskar Electric Co Ltd., Kirloskar Developers & Builders Ltd., Kirloskar Software Services Co. Ltd., Kirloskar Power Equipments Ltd., Kirloskar Computer Services Ltd., Kirloskar Ansaldo Industrial Systems Ltd., Kirloskar Batteries Ltd. and Kirloskar Malaysia Sdn. Bhd.

The remaining branches of the family would continue to work in a synergistic manner. Mr. Atul Kirloskar announced that the rest of the Kirloskar group of companies would be recast make the group more focused and stronger. With a view to unlock the strength and value in the Kirloskar brand and distribution to enhance returns for our stakeholders, the group is planning to reorganise around well-defined business especially in sectors such as farm, water supply, power and air conditioning.
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US-based Janus Capital acquires 5.6 per cent stake in Reliance
Mumbai: Reliance Industries today informed the stock exchanges that the US-based foreign institutional investor, Janus Capital Corporation, has acquired 5.94 crore equity shares of the company, representing 5.64 per cent of RIL's equity capital of Rs.1,053 crore. The disclosure has been made as required under Sebi's takeover regulations.

The shares are said to have been acquired from the secondary market in the past three weeks. Based on the average price of around Rs.325, the value of the investment works out to around Rs.2,000 crore.

The total investment by international investors in RIL now exceeds 23 per cent of its equity capital.
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Ford India eyes the exports markets
Pune: Fresh from the success of its Ikon model in the domestic market, where the car has sold over 5,000 units since its launch in December 1999, Ford India Limited is all set to expand business by exporting made-in-India cars. The company is right now in the process of setting up an export plant adjacent to its Maraimalai Nagar facility in Chennai to exclusively handle requirements for exports by sourcing auto components locally for the completely knocked down (CKD) units, among other things.

The company plans to kick-off exports of Ikon by the fourth quarter of the current financial year and is in advanced stages of discussions with at least three countries where the first consignments of the car will be headed. This was stated by Mr. John Fink, vice-president, marketing, sales and service. He, however, clarified that the first phase of our exports does not include any plans for Europe.

While initial plans were to export CKD units of the IKON, the company is now also planning to export fully built-up cars from India. While Ford India is still keeping the export destinations for the IKON under wraps, top company sources said the initial plans were to send CKD units of the car to South Africa where it would be assembled and sold by Samcor, a Ford joint venture.

The company will be doubling production of the IKON within the next couple of months to cater to the sustained demand; it is planning to manufacture 20,000 units of the car by end-2000.
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Intel picks up stake in InCableNet through special purpose vehicle
Mumbai: Intel Capital, the Indian subsidiary of the US-based Intel Corp, is to pick up 49 per cent equity stake for $49 million, in a Hinduja Finance subsidiary and special purpose vehicle, Grant Investrade Pvt Ltd. The deal is subject to the Foreign Investment Promotion Board (FIPB) clearance.

The funds would be used to increase the stake in IndusInd Media & Communications Ltd. (IMC) which operates a cable TV network in key Indian cities under the brand name IN CableNet. The cable TV operations offers multi-channel transmission to over four million Indian homes and is classified among the top 10 largest cable TV operators in the world in terms of subscribers.

ABN-Amro Asia Corporate Finance has been advising the Hinduja group in the restructuring of its media holdings. It was the sole advisor to IMCL in its broadband alliance with Intel.
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Elgi group company to launch vinyl doors and windows
Chennai: Elgi Building Products Limited (EBPL), part of the Coimbatore based Elgi group, has decided to sell its branded vinyl windows and doors, after a year-long concept selling and test-marketing trials.

Branded 'Elgi Visage', the new range of polymer window/door profiles, are likely to be sold through franchisees in Bangalore, Hyderabad, Chennai, Kochi and Pune. The company will supply the profiles of polymer reinforced extrusions from the its central production plant at Coimbatore to the franchisees, who will then fabricate the customised polymer windows and doors to suit client's tastes and specifications. EBPL would back up the franchisees with technical and marketing support.

The company believes that with wood becoming scarcer, and its cost rising sharply over the years, the potential for standardised/quality polymer based window/door profiles would go up.

EBPL's `Visage' polymer window/door profiles are produced with technical know-how extended by the Austrian company Technoplast and conform to the RAL standards meant for building materials in Europe.
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Balrampur Chini decides against Chilwaria Sugars take-over
New Delhi: The deal between Calcutta-based Balrampur Chini Mills Ltd. (BCML) and Simbhaoli Sugar Mills to buy out the latter's 100 per cent subsidiary, Chilwaria Sugars, has fallen through.

The Chilwaria plant has been facing problems right from the beginning. Set up as a 50:50 joint venture between Simbhaoli and Tate & Lyle of UK (the world's largest sugar producer), the company went into production in late-1997 when the sugar industry was at the lowest ebb of its cycle. Soon it was facing problems meeting its debt-repayment obligations. Then in October 1999, Tate & Lyle walked out of the joint venture by transferring its entire holding to Simbhaoli free of cost as a result of which the company became 100 per cent Simbhaoli subsidiary.

The main reason for this cold feet seems to be the case filed by Standard Chartered Bank against the Chilwaria Sugar mills, in the recovery tribunal. BCML, which had agreed for a settlement with Standard Chartered as a pre-condition for the takeover, insisted that the bank withdraw the case before the settlement. But this was unacceptable to the bank.

The Simbhaoli management has now decided not to look for another buyer for Chilwaria and to run it itself. To this effect, it will shortly make a presentation to the financial institutions following which the Industrial Development Bank of India (IDBI) proposes to kick off a due diligence exercise.
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HLL initiates fund to retain star performers
Mumbai: Hindustan Lever (HLL), the country's largest FMCG player, is setting up a Rs 150 crore internal venture capital fund to promote new business ideas generated by its own executives -- a step that is very unique to multinational companies such as HLL. This fund is part of the Project Millenium initiative under which the company hopes to retain its more enterprising employees. To give greater emphasis and thrust to this initiative, the company has created a position on the board, where Dalip Sehgal, the earlier marketing controller, personal products division, will be heading the new businesses initiatives.

Announcing this at the company's annual general meeting, outgoing chairman Keki Dadiseth stated that "HLL has set up a mechanism - more like a venture capital fund - wherein employees have to put together a business proposal, and if it sounds promising, HLL play the midwife by deploying its resources".

As part of the new look Levers, the company will change its organisational structure, dis-aggregating into smaller yet independent business units with greater focus. This will provide further leadership opportunities for HLL managers as and when they are ready, as opposed to when they reach a certain level of seniority.

HLL will deploy IT to establish connectivity in the remotest corners of India, and join hands with rural self-help groups and financing bodies to create sustainable jobs for villagers, which in turn will translate into extending the company's distribution into hitherto unexplored territory. It also plans to become the preferred fulfillment engine for e-commerce products and services.
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Shaw Wallace to set up new units for beer
Calcutta: Despite the severe cash situation in the company, Shaw Wallace & Co (SWC) is planning to set up three to four green-field plants in Goa, Kerala, Karnataka and Madhya Pradesh for manufacturing of its beer brands. According to a company spokesperson, licenses for brewing have already been obtained for the green field projects in Goa, Kerala and Madhya Pradesh. These breweries would add to the company's capacity by at least 20 per cent in the next one to two years.

Two of the projects are slated to be completed during this summer, and one more during the summer next year. Products from the Goa and Kerala breweries will hit the markets next year, and from the Madhya Pradesh brewery, a year later.

The company thinks strategic location of these new units will give it the advantage of being present in all corners of the country. The company's manufacturing facilities are now located in Andhra Pradesh, Maharashtra, Orissa, Pondichery, Haryana, Karnataka, Goa, Uttar Pradesh, Himachal Pradesh, Rajasthan and nearby Nepal. The company is expanding its capacities by 15 to 20 per cent every year by expanding capacities of existing breweries as well as by setting up new green-field projects.

Within four years of operation, SWC has cornered a market share of 32 per cent in the strong and premium beer segments. The company has yet to consolidate its position in the mild beer segment, which it hopes to do with its new breweries.
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Stronger steps help ICICI recover Rs. 500 crore in NPAs
Mumbai: ICICI Ltd., which has been in the news for its non-performing assets (NPAs), had stepped up legal proceedings during the fiscal 1999-2000 in a bid to reduce the level of NPAs.

The financial institution filed an aggregate of 131 legal suits in the year for recovering an amount close to Rs 1,000 crore, as compared to a total number of just 168 cases being filed against defaulting companies ever before this year.

High level sources said that the company had also managed to recover up to around Rs 500 crore through across the table negotiations with various defaulting companies. Though the threat of pursuing legal proceedings is likely to have been a factor in these negotiations.

The financial institution has changed the way it does business with defaulting clients and is getting more aggressive. Although settlement remains the first choice in a business relationship, a large number of legal suits have been filed due to the huge difference recoveries make to NPAs.
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Samcor prepones investment plans
New Delhi: In anticipation of a serious shortage of glass used in the colour picture tube (CPT) industry worldwide, Samcor Glass, a three-way joint venture between the US-based Corning, Samsung and Samtel group, has decided to advance its Rs 450 crore investment in setting up a greenfield plant for manufacturing panels for CPTs. Further, in the domestic markets, there is only one local manufacturer of this product and the domestic capacity is not adequate to meet the burgeoning demand for CTV sets in India.

While the company had earlier scheduled to start construction in 2002 and import panels from the Samsung facility at Korea during the interim period, it now plans to go into production by September 2002. The decision to start manufacturing panels was taken at a meeting of the partners at Seoul recently. The construction is expected to begin shortly.

A major reason for the expected shortage is that most CTV manufacturers are now moving to large screen CTVs, which use up large glass tonnage. Super flat TVs are known to use up 20 to 30 per cent more glass.
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