Birlas set to sell out MRPL stake to HPCL
New Delhi: Following differences over the style of management, it is understood that the AV Birla group has approached the government to withdraw from Mangalore Refineries and sell its stake to state-owned oil company, Hindustan Petroleum.

It is also understood that the petroleum ministry has accorded its approval for HPCL to buy the stake and the oil company’s board of directors is soon take give its approval in this regard.

The AV Birla Group and HPCL hold 26 per cent stake each in MRPL, with the balance being held by the financial institutions and the public. For some time now, the equity partners have been trying to rope in a third partner in the company to tide over their finance problems which have increased following the huge losses incurred by the company.

The AV Birla Group has been having serious differences over the managerial style of the co-promoter, which was discussed at various levels and all efforts to reconcile the differences were futile.

According to industry sources, apart from the managerial differences, the huge losses that MRPL has been totting up was another reason why the AV Birla group wanted to get out of the venture.
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IBM set to increase PC manufacturing in India
New Delhi: Despite the all round gloom brought about by a cutback in IT spending by most companies, personal computer major, IBM is set to double its manufacturing capacity in the country at its plant in Pondicherry.

This was stated by Mr. Ravi Marwaha, general manager of IBM’s personal computing division (Asia-Pacific) and former head of Indian operations.

IBM India started assembling low-end servers earlier this month and plans to manufacture 1,000 servers in the current fiscal. Its Pondicherry plant, set up in 1999, has a capacity of assembling 40,000 PCs per annum and has already been functioning at peak capacity.

In light of the downturn in the hardware business, companies like Gateway and Dell have already deferred their Indian plans, while IBM remains very positive about the Indian scenario. The company also plans to take head on companies like Apple and SGI who are market leaders in visual computing segments such as animation and high-end computing.
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Government chalks out revival plan for Hindustan Photo Films
New Delhi: With its inability to find a joint venture partner to rejuvenate the ailing Hindustan Photo Films, the government has decided to first effect a financial recast and clean up the state-owned company’s balance sheet.

To this effect the government has drawn up a Rs 1,329.50-crore financial restructuring package for the country’s oldest photo film manufacturer.

The government believes that it will be easier to find a strategic partner after the restructuring is done. The last exercise to find a suitable joint venture partner had been abandoned as proposals were not found acceptable.

The new package is expected to involve a waiver of accrued interest worth Rs 856.75 crore by banks, financial institutions and other unsecured creditors besides a write-off of a loan advanced by the government and interest on it amounting to Rs 184.21 crore.

The new package would be forwarded to the Board for Industrial and Financial Restructuring for approval once it is cleared by the cabinet, sources added.

The company, with some 2,500 employees on its rolls, also plans to introduce an employee separation scheme as part of this restructuring exercise.
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Essar denies rumours of break up with Shell
New Delhi: The Essar Group issued denials about its rumoured split with Royal Dutch/Shell in its joint venture to devlop the Hazira port in Gujarat.

Mr Shashi Ruia, chairman of the group, stated that the group was considering pulling out of the joint venture for the liquefied natural gas terminal project at Hazira because of an overcrowding of projects in the state and not for the development of the port.

The Shell-Essar consortium got Hazira port for development with the understanding that Shell will develop the LNG terminal and Essar will develop four berths for dry bulk cargo. According to company sources, no changes have been made on the earlier memorandum of understanding.
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McKinsey predicts gloomy future for ONGC if it does not change
New Delhi: Once the leading petroleum prospecting company of the country, the Oil and Natural Gas Corporation (ONGC) has slid to become a terminal case. A recent report commissioned by the government and conducted by global consulting major, McKinsey, has stated that the current performance is clearly unacceptable.

The report states that ONGC needs to rapidly reorganise, failing which the government may be forced to take "draconian" measures, including establishing joint ventures at key oil fields, unless ONGC quickly changes-over to asset based structure.

The shift to this structure is necessitated by the decline in production and escalating cost. ONGC also needs to clearly demarcate exploratory and production assets with significant decentralisation of authority and accountability, the report said.

Production of crude oil by ONGC has declined from about 30 million tonnes five years ago to just over 24 million tonnes in 1999-2000. It is expected to remain mostly unchanged during the current fiscal.

The report has also called for the downsizing of the corporate centre and converting it from a large, centralised administrative support function to a small group focused on core value-adding activities.

Mckinsey also called for portfolios of directors to be reallocated and performance management system to be implemented.
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Nicholas Piramal not interested in German Remedies
Mumbai: To a surprise announcement, leading domestic pharmaceutical company, Nicholas Piramal India, said that it was not interested in acquiring a stake in German Remedies, nor has it bid for acquiring the German shareholding in the company.

Two of the four owners, Asta Medica AG and Heller AG, are each selling 13.7 per cent stakes in German Remedies. The other two, Schering and Boehringer Ingelheim, own 4.6 per cent each.
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Yet another crisis hits Balco
New Delhi: After having been hit by a strike following the privatisation of the state-owned Bharat Aluminium, the company faced another hurdle. The Chhattisgarh administration, which opposes the privatisation, refused permission to allow the newly-privatised aluminium-maker to move its stockpiled products out of its warehouses for sale.

Balco, which supplies 15 per cent of the country's aluminium output, said earlier it was already losing Rs 45 lakh a day due to the strike launched on March 3 to protest against the government's decision to privatise the company.

This case is increasingly becoming the litmus test for the government’s will to press ahead with the privatisation program, a key element of economic reforms launched a decade ago.

The state authorities have denied the permission for the movement of the stocks because they feared that the striking employees may react angrily to the move and this would result in a law and order problem.

The sale of the state-run aluminium firm has triggered a political storm with opposition parties accusing the government of selling the profit-making firm too cheaply.
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HDFC may acquire $100-m loan from ADB
Chennai: As part of its annual fund raising program, it is understood that leading housing finance major, the Housing Development Finance Corporation (HDFC) has come closer to raising a fresh loan of $100 million from Asian Development Bank.

According to Mr. Deepak S Parekh, chairman of HDFC, the financial institution has so far raised $300 million from ADB and the new loan is being finalised by filing the documents.

He also stated that HDFC is still keen on floating a real estate mutual fund and hoped Sebi will give its permission. Permission has so far been withheld by Sebi on the grounds that the fund, by taking a view, will affect the interest of common man and real estate prices will go up.
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BPL may rope in France Telecom for VSNL stake bid
Mumbai: Mobile telecommunications major, BPL Innovsion, is understood to have initiated talks with its partner in its mobile services, France Telecom, to form a consortium to bid for the VSNL divestment.

It is also understood that the two are most likely to invite strategic investors and financial partners into the consortium. The number of such strategic investors will be decided after the negotiations with them are concluded.

According to Mr. Rajeev Chandrasekhar, chairman of BPL’s telecom business, the consortium is likely to be very big and the final shareholding pattern will be decided only after details are worked out.

The formation of the consortium is moved by the government stipulation that the net worth of the bidder should be Rs 2,500 crore.

If the BPL-led consortium picks up equity in VSNL, it will mark a major diversification of the group into the international voice traffic business, after having made significant investments in the cellular, internet, broadband, paging and other related businesses over the last few years.
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JK Bombay to be renamed Raymond Apparel
Mumbai: The Vijaypat Singhania group has decided to rename JK Bombay to Raymond Apparel in a bid to cash in on the equity of the brand. The company is also the legal owner of the brand.

Raymond Apparel's portfolio includes Park Avenue formal menswear, Parx casual wear and Manzoni, a premium range of shirts, ties and suits. It plans to increase the distribution reach by 40 more exclusive outlets by the year end. At present, it has a network of 250 outlets across the country.

The group is also planning a brand extension of its brand Parx to deodrants and perfumes, which will target the youth.

After hiving off its non-core cement and steel divisions, the group flagship Raymond Ltd has now decided to focus on its core business of textiles and steel files.
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PwC to script restructuring plan for Havell
New Delhi: The Havell Group, a leading player in the business of switchgears and energy meters, has retained the services of global consulting major, PriceWaterhouseCoopers (PwC) to restructure the group's business currently spread over nine companies into four companies. The new structure is expected to be in place within the next 4-5 months.

PriceWaterhouseCoopers is said to be in the process of doing a valuation of the various businesses to work out the swap ratio of the various companies.

Havell's India is also said to be considering placing with the domestic financial institutions 1.5 million shares of the company to raise funds for acquisitions and capacity enhancements. The placement is expected to fetch the company funds to the tune of Rs 18-24 crore.
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Grasim plans expansion for white cement variant
Mumbai: The flagship of the AV Birla group, Grasim Industries, is understood to be planning the setting up of 20 new plants across the country to manufacture glass fibre reinforced cement (GRC), a variant of white cement, which it introduced in India last week. This envisages an investment of approximately Rs. 60 crore.

The new product has been introduced by the company in its bid to move up the value chain in the white cement business. Currently, GRC is being manufactured only at Birla White's Baroda unit with an installed capacity of 4 lakh sqft per annum.

The company was prompted to set up so many production bases due to the low investment required and also due to the fact that these bases will reduce the transportation costs and help the product penetrate into all markets.

With the margins in the white cement business being high, Grasim is trying to generate new ideas to enhance the per capita consumption of white cement in the country.

GRC, a fairly new concept in the country compared with the western countries where it is widely used, is light in weight and facilitates bolting new panels directly over an existing unsighty facade, thereby giving a liberty to use modern structural techniques while retaining the authentic appearance of buildings.
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Tata Steel sets itself a stiff target on excellence
Mumbai: Already having won the coveted JRD QV award, based on the widely accepted Malcolm Baldridge award, Tata Steel is now benchmarking a score of 750 on Tata Business Excellence Model system, thus aiming at emerging as the industry leader in steel.

Having already achieved a score of 616, the company is now gearing itself to moving up the scale and reaching the band of 650/750 and efforts towards this end have already been started.

The score has enabled Tata Steel emerge the lowest-cost steel producer in the world at an operational cost of $140-145 per tonne of hot roll coils.

The company has embarked upon various initiatives for cutting costs, both at the operational and functional levels. It has also commenced several HR initiatives to promote awareness of the restructuring programme.

In order to keep improving on the quality, the designed an organisation structure, whereby there is an epic council with the managing director, executive director and senior executives as members, followed by quality councils, quality sub-councils and departmental councils.

The design was aimed at creating a clear communication flow in the organisation, specifically passing the information relevant to a particular area in a specific department through scorecards to the people who are actually doing the job.
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UB Group to set up chain of lifestyle retail stores
New Delhi: As part of its move to diversify into areas that go well with its image, the UB group is planning, through its subsidiary, McDowell International Brands, to set up a chain of 50 lifestyle retail stores at an estimated investment of Rs. 100 crore.

To be set up in the country's 25 major cities, the exclusive stores will be company-owned with an area of about 3,000 sq ft and will be used to retail imported lifestyle products ranging from crystal to cosmetics to fashionwear and if government permits, even wines and spirits.

Among other brands that will be brought into the country by MIBL are Balleek Parian China and Galway Irish crystal, Charrier and Prestige range of perfumes; and Italy's Laila brand of cosmetics.

Interestingly, while the company is importing only high-end products in the lifestyle category, it is chasing volumes in the perfumes and cosmetics segment by bringing in mid-priced products.
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