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L&T open to giving equal stake in cement subsidiary
Mumbai: Engineering
giant, Larsen & Toubro (L&T), which is hiving off its cement business into a
separate subsidiary has made a radical shift from earlier stand towards divestment of its
equity in the subsidiary.
L&T has now decided to offer its
strategic partners an equal stake in the cement company, christened L&T Cement, over a
period of three years. To begin with, L&T will offer 26 per cent of the equity in
phase one. Over the three-year period, L&T and the strategic partners will hold 44 per
cent each in the cement subsidiary, which is to be listed on the bourses.
Further, in accordance with the recommendations received from its advisors, L&T is
also planning to merge its second cement subsidiary, Narmada Cement, into the new entity.
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FIIs take 10 per cent in Dilip
Chabbria Design
Mumbai: In what is a
spectacular valuation for designer cars in the country, foreign institutional investors,
Jardine Fleming and Robert Fleming, have taken a 10 per cent equity stake in Mumbai-based
automotive design solutions company, Dilip Chhabria Design. This deal translates into a
market valuation of Rs 150 crore for DC, which concluded 1999-2000 with revenues of only
Rs 5 crore.
The two FIIs, have acquired the equity for Rs 15,000 a share. Given that the paid-up value
of each share is Rs 100, the premium works out to a phenomenal Rs. 14,900 per share! The
total consideration works out to about Rs 15 crore. Both these funds acquired the DC
shares from the Dilip Chhabria family. Chhabria is the chairman and managing director of
DC.
The company has embarked on a capital expenditure of Rs 15 crore to build a world-class
design studio and downstream applications like rapid prototyping and reverse engineering.
The company is in talks with European car
producers for outsourcing work from India, by leveraging its skills and costs for doing
such work. The cost of automotive design in Europe is extremely high ranging from around
$100 to $800 per hour compared with India’s ability to deliver the same at around $50
to $60 per hour.
At present, automotive design is increasingly outsourced from Italy and Japan and there
has been a global shortage of automotive design capacity.
Other global design companies are Ital Design, which has been the leading car designing
company, followed by Idea Institute, Pinin Farina, Bertone and the UK-based Howtall
Whiting.
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East India Hotels rattled by ITC
share purchase
New Delhi: While
expressing that the management of East India Hotels, the owners of the Oberoi group of
hotels, is not unduly perturbed by the acquisition of its shares by rival, the company is
clearly surprised by the move of its rival.
ITC group company, Peninsular Investment
Ltd., acting in concert with Newdeal Finance and Investment Ltd., had acquired 5.03 per
cent of EIH’s equity capital as on August 4, 2000. Subsequently, the two investment
companies raised their holding to 5.72 per cent.
ITC chairman Y C Deveshwar had clarified
that ITC had no intention of any hostile takeover operation. The two companies bought the
shares as part of their normal treasury operations for which such investment companies are
meant and informed the company on their own when the shareholding went beyond 5 per cent.
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ITC
to offer stock options to employees
Calcutta: Multinational
company, ITC Ltd., which has for long been considered to be the breeding ground for
excellent managerial talent, has decided to offer stock option to employees.
The details of the scheme, mooted by a
shareholder at the last annual general meeting, will be worked out and finalised by the
company’s board of directors, at the next board meeting.
It is believed that the introduction of
this share option scheme would help the company retain good talent in the coming years.
ABB may make India its worldwide hub for
software
New Delhi: Having sold off most of its power generation business, Swedish giant, ABB, is
looking at information technology to be one of the major new initiatives for
infrastructure engineering group in India.
Worldwide, ABB has already been acquiring specialist companies in the IT sector keeping
with its knowledge-based shift and the new development appears to be in line with it. The
software plans of the group are considered to be "huge" and India is being
considered as a hub for its global software activities.
Also being considered is a IT and an ebusiness resource centre to cater to IT-based
solutions for industry, which are increasingly finding applications in the company’s
new products. A B2B initiative is also being contemplated by the group.
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ABB may make India its worldwide
hub for software
New Delhi: Having sold
off most of its power generation business, Swedish giant, ABB, is looking at information
technology to be one of the major new initiatives for infrastructure engineering group in
India.
Worldwide, ABB has already been acquiring specialist companies in the IT sector keeping
with its knowledge-based shift and the new development appears to be in line with it. The
software plans of the group are considered to be "huge" and India is being
considered as a hub for its global software activities.
Also being considered is a IT and an ebusiness resource centre to cater to IT-based
solutions for industry, which are increasingly finding applications in the company’s
new products. A B2B initiative is also being contemplated by the group.
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J&N to hive off coatings
division
Calcutta: Paint major,
Jenson and Nicholson, is gearing up for the the new millennium. It is understood that the
company is ready to hive off its Rs 50-crore industrial coatings division, situated at
Panvel in Maharashtra, into a new company. The J&N board is likely to meet shortly to
formalise the proposal.
Some sources believe that the board may consider a 50:50 joint venture with a partner
strong on technology and of course, flush with funds.
The company is also currently engaged in
serious discussions with its existing marketing partner and technical collaborator for its
newly-developed business of marine paints, for a grand alliance.
Besides, Choguko, which may have the best credentials for the proposed strategic alliance,
the J&N management is talking to several other MNCs and Indian paints companies as
well.
J&N has two other SBUs, namely, the architectural coating unit and the paints
manufacturing unit. These two are based in Sikandarabad near Ghaziabad and Naihati in West
Bengal, respectively.
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Enron seeks to withdraw from
Panna, Mukta and Tapti
New Delhi: US-based
energy major, Enron, has approached the government for permission to withdraw from its
present oil and gas operations at Panna, Mukta and Tapti fields. Enron, Reliance and Oil
and Natural Gas Corporation are the joint venture partners in the gas project which was
awarded in early 1990s.
Stating corporate policy decision, the company is understood to have met petroleum
minister Mr. Ram Naik with a proposal to withdraw from the field, where it is working as
an operator. Enron officials also assured Mr Naik that they would continue to give
attention in these projects for production till their formal withdrawal.
Enron is believed to be planning to exit
from gas and oil fields to concentrate on services sector including power trading and
e-commerce.
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Raymond
to foray into IT
Mumbai: As part of its
restructuring exercise, the Vijaypat Singhania group flagship Raymond is considering a
foray into information technology sector, having set up a division, reporting directly to
group president, Mr. Nabankar Gupta, for this purpose.
The company's corporate strategy team
along with a management consultant is examining the benefits of the new business.
The company, now flushed with funds
having sold its subsidiary Raymond Synthetics to Reliance, its cement division to Lafarge
and steel division to Thyssen, is looking at new business opportunities.
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