Essar Steel plans Rs 330 crore rights issue
Mumbai: Exactly a year after it scrapped a similar issue, the beleaguered Essar Steel (ESL) is planning to raise Rs 330 crore through a rights issue with a view to paying off part of its huge debt burden. The 1:1 issue has already received approvals from financial institutions and creditors. The company’s secured loans amount to Rs 2,848 crore and unsecured loans to Rs 1,540 crore (including a floating rate note issue of $250 million).

ESL has already initiated steps to realise Rs 630 crore from divestments in associate companies Essar Power and Hy Grade Pellets. It is understood that ESL is targeting a figure of Rs 320 crore for the sale of its stake in Essar Power, and around Rs 310 crore for HyGrade Pellets.

These divestments and the rights issue are to be accompanied by some belt-tightening at ESL. The company is also putting in place steps to improve its receivables position.
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Bolero to drive Mahindras’ into the urban market
Mumbai: In its bid to keep competition at bay, auto major Mahindra & Mahindra is phasing out its popular Armada (Grand) range and launching the Bolero range by the end of this month.

The Bolero range will come in two versions – the diesel version, which will have the same engine used in the Armada Grand – and a new petrol version will be launched with the engine being sourced from Isuzu. Initially the company plans to launch the diesel option and then follow it up with the petrol version in two months.

According to Mr. Alan Durante, exeuctive director of the automotive division of the company, the diesel engine has been improved with a new air intake and exhaust systems, additional mounting points on the engine block and chassis and a singlepiece cover for the gearbox to control noise, vibration and harshness.

While the final price has not yet been fixed, the company hopes that the new vehicle will be in direct competition with Tata Sumo deluxe and the Toyota Qualis.

With the price gap between petrol and diesel narrowing down, consumers are increasingly showing a preference for petrol driven vehicles. The Bolero petrol option will have a 1.8-litre 85 bhp engine. M&M will be directly importing the complete engine and transmission from Isuzu.

With the launch of this vehicle, the company plans to make inroads into the urban market where M&M had a poor presence. The Bolero, built on the same platform as a Armada, will have a distinctive front grill. This, together with its tilted windshield and sloping bonnet, will give the Bolero a commanding appearance, while the grill and sheet metal bumpers in the front and rear give the Bolero a very contemporary look.

The company has made air-conditioning, power windows, power steering, central locking, cigarette lighter and a 4-speaker stereo, as standard fitments in the new vehicle.
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Coca-Cola India changes its strategy to focus on beverages
New Delhi: In a report appearing in the Business Standard, soft drinks major Coca-Cola India is said to be deciding on a major strategy shift from being a manufacturer of carbonated soft drinks to a complete beverages company. With this in mind, the company is said to be all set to launch ice tea, cold coffee, milk, mineral water and a whole range of juices which will include both its international and Indian brands.

The US soft drinks major is also said to be finalising a plan to regionalise its brand strategy in India—identify and push two to three brands in each region and city instead of pushing the entire portfolio of brands.

As a part of the strategy, Coke, for instance, is pushing only two brands in Delhi—Coke and Limca. Also, it has identified 300 ml, 1 litre returnable and 1.5 litre pet bottles as the pack strategy for the capital. In Mumbai, the brands which have been shortlisted are Thums Up, Kinley Soda and Coke. The bottle sizes will be 300 ml and 1.5 litre with soda being pushed through bars.

Similarly, for Chennai, which is essentially an orange market, the brands chosen for aggressive marketing are Coke, Fanta and Limca. And in Calcutta, the brands identified for a special thrust are Thums Up and Coke.

The company has formed six special business units for its regional brand and pack strategy, and these units will be supported by local advertising and local media buying.

For the upper end of the market, the plan is to bring in Coke’s international brands like Minute Maid and Fruitopia. In tea and coffee, the company will go in for ready-to-drink products. Maaza has already been launched in tetrapack and will soon be available in 1 litre packs.

Coke executives claim that the company has seen a volume growth of around 15 per cent in the first five months of this year as compared to the same period last year. It hopes to report a profit by 2002 when, as per its commitment to the Foreign Investment Promotion Board, it is slated to go public.
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ICICI Ventures forays into restaurant business
Mumbai: ICICI Ventures and the Sanjay Narang-promoted, Mars Hotels, have recently signed a memorandum of understanding to float a new company called Mars Restaurant India Ltd., in which ICICI Ventures will hold 30 per cent. The new company will seek a stock exchange listing at the earliest.

The new company will set up a chain on restaurants in various cities in India, initially at Pune, Bangalore, Delhi, Chennai besides Mumbai. Later the company plans to set up restaurants in Hyderabad and Calcutta. Mars Restaurants will be the first national restaurant chain in the country, and the first publicly quoted restaurant chain company once it goes public.

The company will plan its IPO once it has reached a critical mass, which ideally would mean a chain of around 40 restaurants. The Mars group is also in the process of setting up a boutique hotel in Mumbai. The hotel will have 50 rooms, and three restaurants.

The Mars chain also the Taj Birdy’s confectionary chain which was a joint venture between the Tata owned Taj group and Mars. However the Tatas plan to exit the venture, leaving the running of the chain to Mars. Following the exit of Taj from the venture the Taj prefix to the chain’s name is expected to be dropped. The Birdys’ chain has a turnover of Rs 8 crore and currently has a chain of 18 outlets in Mumbai.
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Greaves joint venture to launch 36-HP tractor range
New Delhi: SAME-Greaves Tractors Ltd, a 50:50 joint venture between Greaves and SAME of Italy, is launching tractors in the 36-horse power range within a year. The company had introduced a 50 horsepower tractor around a year back, which, according to company sources, has received "tremendous response in the market".

The company is going to price the tractor very competitively and be in direct competition with international players like New Holland and John Deere.

According to Mr. Pavan Sachdeva, chief executive of the joint venture company, SAME tractors not only score on technology and emissons, but also on fuel consumption and maintenance.

The size of the Indian tractor market is around 2.6 lakh tractors per annum. And bulk of the demand is for tractors with 35 to 40 horsepower. In 1999-2000, Mahindra and Mahindra led the market with a share of over 27 per cent, followed by Escorts (around 20 per cent), Punjab Tractors (over 19 per cent), TAFE (over 17 per cent), Eicher (around 9 per cent), HMT (6 per cent) and Hind Tractors.
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Bhel targeting eastern Europe and Africa to expand its overseas operations
New Delhi: In a bid to capture new markets and achieve its objective of becoming a global vendor for international electrical majors, Bharat Heavy Electricals Ltd (Bhel), announced that it would invade east Europe and Africa.

The company is said to be in negotiations with several European and American multinational companies (MNCs) like Fosterwheeler for sub-contracting of projects in Asia. The company is also planning to open an office in Africa to capitalise on the business opportunities.

The company is looking at markets like Azerbaijan, Poland, Romania and other east european countries, as part of this plan. It also plans to concentrate on those overseas projects, which were funded by multilateral agencies like World Bank and IMF, as it `will eliminate risks of payments.'
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Indian Oil to carry out restructuring
New Delhi: Indian oil and petroleum major, Indian Oil Corporation (IOC), announced that it would soon embark on a corporate restructuring to integrate its diversified business activities, including power generation and petrochemcials, and effectively implement its Rs 60,000 crore investment plans over next seven years.

A final proposal on restructuring of the company is to be presented to the board for approval soon. Corporate restructuring plan also assumes importance in the wake of IOC bidding for taking over at least two stand alone refineries and becoming a strategic partner to IPCL, earmarked by Government for privatisation.

The company firmly believes that it has come to a stage where it needs to integrate all its operations, without which it will not become competitive internationally. The corporation has ventured in many new areas as well as greenfield projects in its own field through a process of joint ventures (JVs)with domestic and foreign companies besides PSUs.

The corporation is also exercising options of creating regional companies with exclusively demarcated role of marketing, sales, refining, power and petrochemical operations, they said.

Besides, the company is also working on an aggressive strategy of acquisitions and strategic alliances in a bid to become an integrated multinational oil company.
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BT may float Concert, its joint venture with AT&T
London: In an unsourced report appearing in a leading British publication, it is reported that British Telecom is considering floating Concert, its business telecoms joint venture with US giant AT&T. The float is reportedly designed to restore BT's reputation and inject life back into its shares.

Concert, which generates sales of 5bn, has been recently harmed by reports suggesting tensions between the joint venture and its parents. But BT spookespersons have denied any tensions between the partners. Concert's global network reaches 237 countries and it is targeting revenue of $7bn a year.
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