Bharat Sanchar Nigam valued at Rs 63,000 crore
New Delhi: In a market that is seeing a drop in the value of telecom companies, the soon-to-be-corporatised department of telecom services at a whopping Rs 63,000 crore, making it one of the highest net worth companies in the country.

The department of telecom is soon to seek Cabinet clearance for transferring the assets of DTS to the newly-formed company called Bharat Sanchar Nigam. The new company is being set up with a paid-up capital of Rs 5,000 crore, while its authorised share capital would be Rs 10,000 crore.

The asset transfer to the corporate entity is to be in the form of equity, loan, preference equity and reserves.

While the telecommunications minister has assured striking telecom employees that their pensions would continue to come from the government, the department is finalising a back-to-back arrangement with the new company, whereby the pensions would continue to be met through the revenue streams of the corporatised entity. This is being done to ensure that the whole arrangement budget-neutral by ensuring that the burden of paying the pensions is not passed on to the government because of the corporatisation.

Noted chartered accountant firm, A F Ferguson, have been appointed consultants to the DoT to advice on corporatisation. Ferguson has reportedly suggested the setting up of a pension fund which would provide for an annual payment of Rs 2,000 crore for 10 years.
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Will the Tatas exit Eureka Forbes?
New Delhi: According to a report appearing in the Economic Times, the Swedish white goods major Electrolux AB is said to be considering buying out the Tata group’s entire stake in their joint venture Eureka Forbes. This is in keeping with the multinational’s principle of owning a majority in all its joint ventures worldwide.

This proposal is said to be the outcome of the lack of response from the Tata group to Electrolux’s earlier proposal, offering its own stake for sale in their joint venture to the Tatas.

Electrolux is expected to finalise its plans for the stake buyout from the Tatas soon, following which, it will officially approach its joint venture partner with the formal proposal. Electrolux wants to launch its own range of vacuum cleaners in India soon and therefore, the acquisition would lead to considerable synergies.

While the Tata group has refused to comment on the issue, it is understood that they may be reluctant to sell out because Eureka Forbes is a very profitable company, despite not being in the core areas of operations identified by the gruop.

Electrolux holds 40 per cent equity stake in Eureka Forbes and Tatas 60 per cent. In the joint venture agreement, the partners have the first right of refusal in case either of the partners wants to exit the business.
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Birlas’ may be talking to global consortium to buy Mysore Cements
Mumbai: Following the collapse of its talks with the UK-based Blue Circle Industries for the buyout of its group company, Mysore Cements, the SK Birla group is said to be considering divestment of its stake in the company to a consortium of two international cement majors.

Frontrunners in the formation of the consortium are Isreal-based, Nesher Israel and the French giant, Lafarge.

Nesher, Israel’s sole cement producer with a capacity of seven million tonnes, is part of the Israel-based $8-billion Clal Industries with interests in cement, textile and insurance.

Investment banking firm, I-Sec, is said to have got the mandate to find a buyer of Mysore Cements.

Mysore Cements, which has been hit hard by the drop in realisations, has a capacity of 2.1 million tonnes, spread across Karnataka (Tumkur), Madhya Pradesh (Damoh) and Uttar Pradesh (Jhansi).
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BPL Telecom exits hardware business
Chennai: As part of its bid to focus on networking and information technology, BPL Telecom, part of the Rs 4,300-crore BPL Group, is said to have quietly closed down its hardware distribution business. The company is understood to have earned Rs. 30 crore last year from the distribution of SIM cards and handsets.

The company has been in the networking business since 1971, when it first started with its power line carrier communication systems, which provided voice and data networks over high voltage lines to power distribution companies across India. It has now reorganised the networking businesses into three key areas - business communications group, advanced network solutions and customer premises equipment.

The company is said to have developed the country’s first indigenous pre-paid systems, which is being used by the Group’s cellular company in Tamil Nadu, Kerala and Maharashtra.
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TVS Suzuki stops making Shogun, Shaolin models
Mumbai: As a result of dwindling sales and high refurbishing costs to conform to the latest emission standards, TVS Suzuki has decided to stop making two top end power bikes — Shogun and Shaolin.

The company, which recently launched its Fiero model, has seen the new model eating into the sales of its earlier model, Shaolin.

The company plans to launch two variants of the Fiero with different styling in year.
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Glaxo plans relaunch of streptopenicillin
Mumbai: Following an appeal filed by the Drug Action Forum against the order of the ministry of health and family welfare phasing out fixed drug combinations of streptomycin and penicillin, the Supreme Court has given a ruling in favour of the manufacturers. The apex court's order, however, specified that manufacturers of these combinations are required to print explicitly and in bold letters on the packaging that the combination is for veterinary purposes only and would be dangerous/ hazardous if used by human beings.

Glaxo had discontinued production of the penicillin-streptomycin combination two years ago following the imposition of the ban in 1998, and the company is planning to restart the production of 'streptopenicillin' for veterinary segment within the next three months.

At the time of imposition of the ban for formulations based on these drugs in 1998, the market size was of around Rs 30 crore. At present, the market has doubled to Rs 60 crore.
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Ranbaxy to import vaccines for pets
New Delhi: As part of its strategy to leverage the first-mover advantage in the animal healthcare segment, teh Animal Health division of Ranbaxy Laboratories, India's largest pharmaceuticals company, is planning to introduce provide an entire range of products for pets in India. These include therapeutics, nutritionals, health supplements, cosmetics and accessories for pets.

It has entered into an agreement with Ceva for import of vaccines for pets. The company, which is planning to enter the canine care market in a big way, is also talking to Biocor, for import of vaccines.

Vaccines, which account for 32 per cent of the Rs 600 million market for pet care products in the country, is said to be growing 42 per cent. The company has already introduced 10 products in this segment and plans to introduce around 30- 40 more products over the next three years. Of the total market, 23 per cent is accounted for by therapeutics, 32 per cent by vaccines, 19 per cent by health supplements, 11 per cent by cosmetics and 14 per cent by accessories. The market for pet care products is expected to grow at 30 per cent per annum.

As of now, any research done in this area is carried out using funds from the pharmaceuticals side. However, over time, the Animal Healthcare Division will start funding its own R&D.

In India, the approachable pet population is around 1.5 million.
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Tata Engineering in talks with global majors for engine technology
New Delhi: India’a largest commercial vehicle manufacturer, which recently branched out into passenger cars, Tata Engineering, is said to be in talks with international automobile majors including Peugeot Citroen, Renault and Chrysler for sourcing engine technology for Indica exports to Europe.

The company is expected to begin its exports of Indica to the European countries in the next financial year, after it upgrades the car’s engine to meet the Euro III emission norms that are to come into effect from January 1, 2001.

While company officials have refused to talk, it is not known whether the foreign major would also pick up an equity stake in the Tata Engineering car project, if hived off, at a later stage.

The company feels that Indica, with its international looks and sporting a high-tech engine, will be more successful in the European market. Europe would be one of Indica's major markets in the next few years.
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Avesta-Outokumpu merger to create stainless steel giant
London: As weak prices force the steel industry into a series of deals with a view to cutting costs and achieving economies of scale, the UK-based Avesta Sheffield and the stainless steel division of Finland’s Outokumpu, are said to be in the final stages of a merger. If it goes through, the merger will create the world's second-biggest maker of stainless steel.

The merger is likely to create a new company called Avestapolarit, which will be registered in Finland and listed on the Stockholm stock exchange, with a market capitalisation of about E1.3 billion ($1.13 billion) and annual sales of E2.5 billion. The Finnish company will hold 55 per cent of the merged entity, with the UK company holding the balance.
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