SingTel, AT&T may acquire equity in NumTV
Mumbai: Pentamedia, the Chennai-based entertainment software company, is said to be serious discussions with Singapore Telecom and AT&T for a strategic sale of equity in its subsidiary NumTV.

Pentamedia officials state that a number of other investors are also interested in picking up the 10-15 per cent stake that is being planned for offload. Pentamedia will continue to provide content for NumTV even after the investors have been finalised.

With grand plans, NumTV, a pay channel based in the US, is positioning the media broadcasting portal as an Asian channel, and is targeting 600 million non-resident Indians. It also plans to add a Philippine and Japanese entertainment channel by January 2001. The content for these new channels in Japanese and Mandarin languages, will be build through strategic alliances.

NumTV also plans to make an infrastructure investment of $2 million and foray into broadband services. The company proposes to add another five channels to its existing range of 35 channels.
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Tatas in talks with Toronto Dominion for AMC stake sale
Mumbai: TD Asset Management, part of the Canada-based $100 billion Toronto Dominion group, is understood to have completed its due diligence for taking a 50 per cent stake in the Tata Group company, Tata Asset Management, which runs the Tata Mutual Fund.

The two companies are understood to have appointed Arthur Andersen India for preparing a business plan on the basis of which a sale price for the stake would be determined. Currently three Tata Group companies, Tata Sons, Tata Investment Corporation and Tata Finance hold 37, 37 and 26 per cent, respectively, in the AMC.

The eight-member board of Tata AMC is likely to be recast to to induct two nominees of TD Asset Management. Tata Finance and TD Waterhouse, another group company of Toronto Dominion, are 51:49 JV partners in Tata Finance Securities.

The MF partnership is expected to leverage the distribution reach of Tata Finance and the brand equity of the Tata name along with the investment management and product expertise of Toronto Dominion Bank group to provide a competitive product basket to clients.

The AMC which manages a total of nine open-end schemes with assets of Rs 830 crore has seen a net inflow of Rs 200.43 crore between April 1-October 31, 2000.
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Yamaha not to take over Escorts joint venture
New Delhi: Yamaha Motor Company, the Japanese two-wheeler giant, which has a 74 per cent stake in its joint venture, Yamaha Escorts Motors, with the Delhi-based Escorts group, has announced that it will not be buying out its Indian partner.

The Japanese giant, which earlier held 50 per cent of the equity in the joint venture, bought out 24 per cent of the equity from its Indian partner in June this year. As a result of this, all management control was transferred to the Japanese partner.

Yamaha has stated that it would continue to have good relations with the Escorts group and work with them in the future.

Escorts had entered into a technical agreement, with Yamaha in 1985 to make Yamaha brand of motorcycle in the country which was later converted into an equity partnership in 1995.
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Thomas Cook to acquire operations of parent firm
New Delhi: As part of its strategy of expanding into the Saarc region, Thomas Cook India is set to take over the operations of its parent company, Thomas Cook Holdings. A memorandum of understanding to this effect is likely to be signed shortly.

The company, which set up a holding company in Mauritius earlier this year, is planning to merge the branch operations in Sri Lanka with this holding company. It is also seriously looking at expanding its operations to other countries like Bangladesh, Bhutan and Nepal.
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Sundaram Finance hives off IT services
Mumbai: Sundaram Finance has hived off its IT services function into a separate profit centre to be run as a strategic business unit. The objective behind this move is to to give a clearer focus to this activity and leverage the skills for the financial services business group in the area of common back-end systems, software development, maintenance of hardware, connectivity, networking and data centres.
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Tatas offers government swap deal for ITDC
New Delhi: The Tata group company, Indian Hotels Co. Limited, is said to be negotiating with the government to pick up three properties of the public sector, ITDC, which is being privatised. The Tata company is understood to have offered the government a 10 per cent stake in Indian Hotels in return.

The negotiations were confirmed by both, Mr. Krishna Kumar, managing director of Indian Hotels, and Mr. Pradip Baijal, disinvestment secretary to the government.

The government expects 40-50 corporates to participate in the disinvestment process.

Indian Hotels would also be looking at other properties of ITDC, if they have the the potential to attract business clientele. According to senior officials of Indian Hotels, the most profitable properties in the hospitality business are in locations which attract business traffic.

Indian Hotels, which already has a 10 per cent stake in ITDC acquired in the late 1980s during the first flush of economic reforms, is hopeful of getting its bid evaluated competitively by the government.
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Tata Engineering partners DaimlerChyrsler to bid for S African order
Mumbai: India’s largest commercial vehicles manufacturer has joined hands with the world’s third largest auto conglomerate, DaimlerChrysler, and AIG, the world’s largest insurance company, to bid for an order of 60,000 light commercial vehicles (LCVs) from the South African government. The combine has already been shortlisted after the first round selection process.

The order is for supplying the South African government with 18- and 35-seater LCVs to replace a majority of the 80,000 ageing taxis in that country over the next five-year period.

The other Indian manufacturer, Ashok Leyland, is also understood to be in the fray with its partner, the Italian commercial vehicles major Iveco.

Industry analysts are viewing the alliance between Tata Engineering and Daimler-Chrysler with interest, since the former is said to be seeking an arrangement with a global major for product swapping of its small car Indica. DaimlerChrysler already holds a 10 per cent stake in Tata Engineering and has two nominees on the latter's board, while AIG is partnering the Tatas in the group's insurance foray in India.

It is understood that the order could eventually be for 60,000 LCVs, of which around 20,000 vehicles will come to Tata Engineering's share. The rest of the order will be fulfilled by the other members of the consortium.
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Birlas and Oswals vie for National Fertilisers
Mumbai: Following the government’s decision to divest 51 per cent equity in National Fertilisers Limited, the second largest urea producer in the country, the Birla group and Oswal Chemicals may be the final players vying for control of the company. The fertiliser company has been consistently profitable since 1981-82, had reported a turnover of Rs 2,450 crore and a profit after tax of Rs 35 crore during the last fiscal.

The Birla group challenge is lead by the Aditya Birla-controlled Indo Gulf Corporation, with two other group companies, the KK Birla-controlled Zuari Industries and Chambal Fertilisers, bringing up the rear. In addition, Oswal Chemicals and a few companies from the US and Australia are also said to be in the fray.

Though these companies are yet to submit their bids formally, preliminary discussions are on, according to merchant banking sources.

Rabo India Finance, the subsidiary of Rabobank International, is advising the union government for the stake sale to a strategic investor.
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Pechiney signs $260m deal in Venezuela
Caracas: French aluminium major, Pechiney, secured a $260 million contract to boost output at the Venezuelan state-owned bauxite and alumina producer, Bauxilum.

Under the terms of the contract, Pechiney will be required to increase Bauxilum's annual output of alumina by 20 per cent to 2.15m tons. In return, Pechiney will receive the additional 400,000 tons of alumina production, but no equity stake in the company.

The signing of the Bauxilum contract with Pechiney breathes life back into Venezuela's long-ago stalled programme to attract private capital into its debt-ridden but potentially high class aluminium industry.

The deal will also come as a boost to left-leaning President Hugo Chavez, who has faced criticism for frightening off foreign investment.
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Cisco Systems faces sobering drop in stock price
San Francisco: The San Jose-based, Cisco Systems, once the undisputed king of routers and switches used in computer networks, seems to be caught in a downward draft. After soaring through better part of the 1990s with huge earnings and relentless growth, the company, faced with increased competition is fighting hard to maintain its profit margins. Further, some industry analysts fear that an economic slowdown will lead Cisco's technology customers to spend less on the company's products.

The company is in the throes of its first annual loss, since its shares went public in 1990. Its shares have now lost 42 per cent of their value since peaking at at $82 in March, and through November were sitting 11 per cent below where they began the year.

Walls Street experts believe that the company has grown so big so fast, that it may have trouble keeping up with the pace of innovation at more nimble upstarts like Juniper Networks, whose stock price has more than doubled this year.

The company narrowly beat Wall Street's profit expectations in November for the 13th consecutive quarter, and after management predicted a 50 to 60 per cent revenue increase in the current fiscal year.

Despite being a clear market leader in its segment, the recent price erosion of its stock is worrying the company management. It fears that this will pose a threat to it’s long-term expansion plans because it uses its stock as a currency to buy the technology and talent to diversify into promising new niches, such as optical networking and telecommunications software. Cisco's buoyant share value also helped recruit and retain the brightest tech workers through the prospect of lucrative stock options that become less attractive when a company's stock languishes.

The company has spent, in the past three years, more than $23 billion, largely in stock, to snap up dozens of companies and their employees. The buying spree boosted the company's payroll from 8,800 workers in September 1996 to just under 39,000 employees now. For the immediate future, Cisco plans to buy about 25 companies per year as part of an expansion that could double its payroll to about 80,000 employees during the next decade.

Cisco’s senior management is, however, confident that if the company takes care of the fundamentals, strong stock prices will follow. The company could well use the current depression in technology stocks to accelerate its acquisition pace.

While analysts are not overly worried about the Cisco stock price, which is still faring relatively better than other tech companies like Lucent and Nortel Networks, if the price continues to lag, the company will be hard-pressed to make blockbuster deals like in the past. Last year the company was involved in some mega deals like the $6.9 billion purchase of Cerent, which makes optical networking equipment, and the $5.7 billion takeover of ArrowPoint Communications, which makes switches that direct Web traffic.

The company, which is likely to distribute a new round of employee stock options, is taking adequate steps to ensure that employees do not feel anxious about their options and are not tempted to switch jobs in the Silicon Valley's highly competitive market for technology workers.
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