Hutchinson ahead in race for Shinawatra stake in Fascel, as Hindujas hits FI block
Mumbai: With the financial institutions unwilling to approve the Hinduja group's plan to buy out partner Shinawatra of Thailand from the Gujarat circle cellular operator Fascel, Mumbai's cellular operator, Hutchinson Max, seems to be in the lead to buy the Thai company's stake. Fascel is the largest non-metro cellular operator with a subscriber base of 1.2 lakh.

Shinawatra currently owns 33 per cent of Fascel and wants to sell out. The entire 33 per cent stake is pledged with the institutions, who are not ready yet to give their clearance for the Thailand-based company's exit. In April this year, both Hindujas and Shinawatra's had reached an amicable agreement wherein the former was to acquire the 33 per cent of Shinawatra for a price said to be around Rs 300 crore and was expected to be completed before April 30, 2000. The Hindujas had plans to offload this stake to an international telecom operator.

The inability to prepay the Rs 120 crore given to the company as a bridge loan by the financial institutions is expected has resulted in the Hinduja group not getting the necessary approval for the purchase of the stake.

The Hindujas hold 32.25 per cent in Fascel, while the remaining equity is held by Bezeq of Israel (16 per cent), Kotak Mahindra (11 per cent) and HFCL (7.75 per cent). Shinawatra decided to exit the venture as it wanted to focus on its domestic telecom operations.

As part of the Hinduja group's plan to offload the Shinawatra equity, the company is believed to have received strong interest from Hutchison Max, BPL Mobile, Escotel and Bharti Cellular. All three parties are understood to have put in bids ranging from Rs 17-20 per share. Fascel has a paid-up equity of Rs 500 crore.

The Orange brand, owned by Hong Kong-based conglomerate Hutchison Whampoa, is spread across three continents and is available to over 100 million people. Hutchison, which first started in Mumbai along with joint venture partner Max India as Hutchison Max, is planning to expand aggressively in the country through the acquisition route. In keeping with this plan, the company bought out Max in a complex Rs 561-crore deal in April 1998. Then, last December, it bought out Swiss Telecom and Sterling Cellular’s 49 per cent stake in Delhi’s Airtel. It is now set to buy a 55 per cent stake in Usha Martin Telecom, one of the two operators in the Calcutta cellular business.
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Dutch group, VNU gains control of ORG-MARG
Mumbai: After a long and complicated chase, the Dutch communications company, VNU, has acquired India’s leading research company, ORG-MARG, from the Advani's of Business India.

According to industry sources, this acquisition could well mark the beginning of a realignment of forces that could bring to an end the battles between rival syndicated measurement services that has dogged the Indian research industry in recent years.

ORG-MARG has been in the forefront of many such research studies, especially in the area of TV measurement and readership surveys. In both these areas, the company moved aggressively to privately do the studies, after having failed to get the official contract for the studies.

With many large users of the readership survey being carried out by a rival research company being unhappy with the survey, ORG-MARG teamed up with them to form the Market Research Users Council and started the Indian Readership Survey. This was later rechristened the Indian Media and Markets Survey (IMMS).

In the areas of TV measurement, where the official bodies were delayed by the slow pace of industry workings, ORG-MARG could move much faster as a single private company to bring out its rival survey.

However, despite its success in these studies, the company faced problems in the aeras of pharmaceutical and retail audits the case was the opposite. ORG’s long-standing audit on tracking pharmaceutical sales, started over 30 years ago, has been challenged by IMS, the world leader in healthcare measurement. Despite the problems and the challenges, ORG-MARG had managed to invest in total revamps, and hold on to its leader status.

While periodically, attempts have been made to bring the various services together, these have been stalled by the ambitions of the various companies. The VNU takeover of ORG-MARG could change this scenario, due to changes among the companies’ global partners.

In the international arena, VNU has taken over Nielsen Media Research, not any part of A.C. Nielsen, thus making the Dutch company stronger in TV research. Similarly, the WPP group, which owns IMRB, recently acquired Italian company, AGB Italia, which has had a series of high profile wins recently.

India could thus be the first battlefield in the area of TV measurement with VNU and WPP emerging as major global competitors.

For ORG-MARG, the VNU takeover means a chance to get back on its track to dominate the Indian research market that it set in motion three years ago.
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Groupe Pernod of France plans Rs 50-cr investment
Panaji: Groupe Pernod Ricard of France, which entered the Indian liquor market in 1996 through the acquisition route, has major plans for investment of close to Rs 50 crore ($11-12m) in next five years.

This was announced by the chairman and managing director of the Indian subsidiary of the group, at the launch of its premium whisky brand Tilsbury, which is a grain whisky specially developed for Indian markets by the Group at its India-based distillery at Kolhapur (Maharashtra). The Indian subsidiary has major promotional plans for India's premium whisky market so as to achieve a 10 per cent market share for Tilsbury in next five years.

The Group has already invested around Rs 10 crore in the distillery at Kolhapur, which includes acquisition of 74 per cent stake in erstwhile Kolhapur Sugar Mills distillery unit which has been since upgraded to a capacity of 6m cases. The company has already launched two of its brands -- Santiago dark rum and Tilsbury -- and plans to introduce its fast growing international brand Clan Campbell by next April.
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Hughes Telecom plans to invest $175 m in broadband
Mumbai: Basic telecom service provider for Maharashtra and Goa — Hughes Telecom, which is a joint venture between US-based Hughes Corporation, Alltel Corporation and Ispat Industries — is said to have plans to invest $175 m (around Rs 780 crore) to build a broadband network for the Maharashtra and Goa region. It has already awarded the contract for transmission, switching and other services required for the project to Lucent Technologies.

This diversification is part of the company's plan to be the preferred communication provider for consumer seeking high quality internet acccess.

Hughes will initially lay the network in Mumbai followed by Pune in the second quarter of 2000. Hughes will provide both broadband wired and wireless services using fibre optic. While it will continue to roll our its network for basic telephony services, the company plans to position itself as a single platform for all communication needs, and will also provide access to internet as a Internet Service Provider (ISP).
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L&T puts off cement division hive-off
Mumbai: Engineering giant, Larsen and Toubro Ltd, will hive off its cement division into a separate company only after its capacity reaches 15 million tons. This was stated by the company's managing director, Mr. A.M. Naik.

Although the well known management consulting firm, Boston Consulting Group, had recommended the restructuring of the company's cement business through divisionalisation, subsidiarisation, partnership and listing, the company wanted to enhance the capacity and profitability of the cement business before its hive-off into a separate subsidiary.

According to Mr.Naik, this will help in increasing the valuation of the cement business by at least $250 million. Analysts have valued the cement division (at present capacities) at about $1.3 billions.
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Madura Garments hires UK design consultant to spruce up show windows
Bangalore: After its recent acquisition by the AV Birla group, Madura Garments is planning to spruce up the visual merchandise of its brands in vendor shops across the country. It has, for this purpose, appointed Mr. Stephen King, a UK-based design consultant, with the aim of displaying innovative designs and fashion statements from the Madura portfolio at each outlet.

Mr. King was earlier a designer for Westcott Jeans and Tom Gilbey Couture and has catered to the wardrobes of celebrities such as Elton John, Paul McCartney, Madonna, Jack Nicholson, Sean Connery, U2 and Steve Wonder.

Since his appointment, Mr. King has been on the move, visiting vendors across the country to help them improve the store's image. According to Mr. King, visual merchandising is important in a country of extreme climates and where the market for garment brands vary from place to place and from season to season. With this in mind, Madura Garments plans to spruce up visual merchandising will entail the overhauling of showcased products to reflect seasonal variations in the theme of design, fabric and textiles.
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Blue Circle may strike all-cash deal with Birla group for its cement units
Calcutta: It is believed that the three Birla groups -- Basant Kumar (BK), Sudarshan Kumar (SK) and Ganga Prasad-Chandra Kant (GP-CK) -- are close to finalising an all-cash deal with the UK-based multinational Blue Circle Industries plc to sell their six units having a combined capacity of over 6.7 million tons.

The units, which are supposed to be sold to Blue Circle are : S.K. Birla-controlled Mysore Cements’ two units at Damoh in Madhya Pradesh, one each at Jhansi in Uttar Pradesh and Ammasandra in Karnataka; GP-CK Birla group’s Orient Cement’s only unit in Andhra Pradesh and BK Birla flagship Century Textiles’ unit at Manikgarh in Maharashtra.

According to top level sources in the cement industry, the UK-based Blue Circle seems to have outbid other transnationals looking for cherry-picking in the world’s third largest cement industry, followed by China and the US.

Blue Circle is the largest cement and concrete producer in the UK with major operations in North America, Chile, Malaysia and Africa. In UK, the company’s nine plants produce over 6 million tonnes a year, and accounts for over 50 per cent of the UK market.

The deal, if completed, would be a win-win situation for all the parties. It would help Blue Circle move ahead of Lafarge, with which it had recently fought an aggressive take-over battle, in expanding capacity in India while the Birlas’ effort to sell off these units would also be successful.
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British Telecom may take stake in Bharti Mobile
Bangalore: British Telecom is planning to pick up a stake in Bharti Mobile Ltd’s cellular services in Karnataka and Andhra Pradesh circle. Bharti Mobile paid around $90 million for buying a controlling stake from the Sanmar Group and Telecom Thailand in JT Mobiles. If the British company picks up a stake in the firm, the Bharti Group would be able to recover part of the Rs 400 crore investment it plans to pump in for setting up an optic fibre backbone.

Bharti Enterprises already has a tie-up with BT in two ventures. Both of them are joint venture partners in Bharti BT, which provides V-SAT services in the country and offers customised solutions for the industry.

Last week, Bharti Mobile launched its AirTel services in Bangalore thereby merging JTM with AirTel. AirTel has a combined customer base of around 4 lakh spread across cellular services in Himachal Pradesh, Delhi, Karnataka and Andhra Pradesh and basic telecom services in Madhya Pradesh.
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Koshika Telecom errs on arrears afresh
New Delhi: The Vinay Rai-promoted, Koshika Telecom, has failed again to clear its licence fee arrears. The payment has been delayed due to Koshika's inability to raise funds from financial institutions. As a result of non-payment of the first tranche, the company now has to pay interest on the outstanding amount at 3 per cent a month from May 9 onwards.

The DoT offer letter had also put clearance of 40 per cent of the licence fee dues as a pre-condition for connectivity of the operator's network.

The company also intends to extend its coverage to new cities in the three circles. The expansion process would, however, begin on receipt of DoT go-ahead.

Koshika's licence to operate cellular services in Bihar, Orissa and Uttar Pradesh (West) had been terminated last May.Last year, DoT had marked Koshika's lien and encashed the operator's bank guaranty worth about Rs 94 crore.
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