Balaji-Nine Network merger on rocky ground
Mumbai: The proposed merger between Nine Network Entertainment India, a wholly-owned subsidiary of Kerry Packer-controlled Nine Broadcasting India, and Balaji Telefilms, media company controlled by Bollywood celebrity Jeetendra Kapoor, has been delayed by two to three months.

The recent stock market crisis may be one of the reasons for this. Nine Broadcasting Network is a joint venture between Himachal Futuristic Communications Ltd (HFCL), which has been embroiled in the stock market scam, and Channel Nine of Kerry Packer. Ketan Parekh and associates hold about 6 per cent stake in Balaji Telefilms.

The Balaji Telefilms stock has been touching downward circuit for the past few days. Indeed the scrip has almost crashed by 34 per cent — from Rs 139 to its all-time low of Rs 92.75 — in five trading sessions. The scrip has lost over 70 per cent in value from the all-time high of Rs 353 touched a few months ago.
Balaji Telefilms had announced the merger in November 2000 on a swap ratio of 65:200, that is 65 shares of Balaji Telefilms for every 200 shares of Nine Network.
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Lawsuit filed against Rediff in the US
Mumbai: Rediff.Com a well-known Indian portal has been slammed by a class action lawsuit in the USA.

A shareholder in the portal Suresh Khanna alleges that the company did not disclose material information in its ADS prospectus has filed the lawsuit.

Khanna is represented by law firms Lovell & Stewart and Sirota & Sirota in the lawsuit against the Mumbai-based portal Rediff.Com.

Rediff.Com vice president (finance) Vinayak Purohit confirmed the news but declined further comment. "The matter is sub-judice and we cannot comment at this stage. Our lawyers are looking into the matter," said Purohit.

The complaint which was filed on April 10, 2001, alleges that, "Rediff.Com India, certain of its officers and directors and the lead underwriters for Rediff's initial public offering violated the federal securities law by issuing and selling ADS pursuant to the June 14, 2000, IPO without disclosing to investors that its internet business has been experiencing difficulty with its e-mail software and that it was known that many significant advertising contracts would terminate by December 2000."
Further the complaint alleges that Rediff falsely stated in the IPO prospectus that one of its directors, Richard Li, was a graduate of Stanford University.

The company is also alleged to have omitted to disclose in the prospectus that any mergers would be likely to entail a substantial drain on IPO proceeds which would increase the company's 'burn rate' for corporate funds and accelerate the need for additional financing.

The lawsuit is pending in the US District Court for the Southern District of New York. The $75-million Rediff ADS was listed on the Nasdaq in June 2000 at $21 per share. The IPO was lead managed by Goldman Sachs, Credit Suisse First Boston and General Electric's GE Capital Services.
Rediff is India's first dotcom company to list on a US stock exchange.
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Nortel shelves investments in India
Mumbai: The downturn in tech stocks on Nasdaq is making more and more of an impact in India now with Nortel Networks, the Canadian telecom equipment manufacturer putting on hold planned investments in India.

Last year the Clarence Chandran, chief operating officer of Nortel Networks, had announced plans to invest up to $350 million in India over a period of three to five years.
These have been put on hold.

Nortel had four vendors in India, Infosys, Wipro, TCS and Satyam and had announced plans to induct BPL Innovision as its fifth vendor.

A substantial portion of Nortel's total investment of $350 million was expected to go into developing its own research and development facility in the country.
Nortel currently has a small R&D facility in Delhi where it intended to double its manpower. This is likely to be put on the back burner for now.

Overall, Nortel's four existing software development partners employ around 1,300 people, which was expected to go up to 2,000 people this year. Also Infosys had around 350 people working for Nortel in India, which was expected to double. Infosys officials were not available for comment on the impact of Nortel's announcement.

Nortel is also one of the largest customers of Wipro and contributes more than $5 million to the latter's revenues.
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Film Roman accuses Pentamedia of violating pact
Chennai: Film Roman of USA accused Pentamedia on Tuesday that it had breached the acquisition agreement and said that it would pursue all legal proceedings available to it under the executed agreement.

In a filing with the Securities & Exchange Commission on April 16, Film Roman has stated that it had formally notified Pentamedia Graphics that the latter was in ‘material breach’ of the Stock Purchase Agreement (SPA) signed January 31, 2001.

As per the agreement, Pentamedia was to purchase 60 per cent of newly issued common stock of Film Roman for $15 million.
John Hyde, CEO Film Roman said, "Pentamedia Graphics informed Film Roman in early March that it was considering alternatives to restructure the fixed payment under the SPA apparently due to the drastic fall in Pentamedia’s share price and the cancellation on March 5, 2001, by Lazard of Pentamedia’s $35-million offering of Global Depository Receipts."

As it tried to restructure the deal, he said, Pentamedia made a series of proposals lowering the initial cash to be paid and extending the remainder of the cash payments into the future.

Finally, Pentamedia said that it could not pay cash and proposed to change the all-cash payment to a payment consisting entirely of GDRs of Pentamedia, which trade on the Luxembourg Exchange with no guaranteed floor on the market value of the GDRs, he said.
The Film Roman board of directors rejected this offer as not in the best interests of its shareholders.
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No cash crunch: Pentamedia
Pentamedia officials clarifying the entire affair, say that the company is not facing a cash crunch and had Rs 248 crore cash in hand as on March 31, 2001.

The balance consideration from Pentasoft Technologies Ltd (Pentasoft) to Pentamedia for the transfer of the latter’s business software division to the Pentasoft stands at $20 million and will be paid over the next three months through cash and stock
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Veritas inaugurates India sales office
Mumbai: Veritas Software, the US-based data management software maker announced on Tuesday it has opened a sales and marketing office in Mumbai. It said that it also plans to increase investment in its Indian research and development centre.
Craig Stevens, vice-president, sales, Asia Pacific said Veritas plans to open two more offices in India, one in the software hub of Bangalore and another in New Delhi over the next 12-18 months. Veritas Software's largest research & development (R&D) centre was in Pune in western India where the company currently employs over 300 people.
Veritas started selling its products in India last year through local distributors.

Veritas has committed itself to spending $3.9 billion in R&D over the next five years and India which houses its largest R&D set up will get a big slice of that, "we believe there is tremendous opportunity for revenue and technological development in India," he said.
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IOC-RPL proposed JV might come a cropper
New Delhi: With the petroleum ministry holding back approval to the proposed marketing joint venture between Indian Oil (IOC) and Reliance Petroleum (RPL) for more than a year now, there are indications that the joint venture may never take-off.

For one thing, Reliance has started direct marketing of its products on its own. The earlier plan did not leave any scope for any of RPL’s production to be marketed on its own.
However, the company has recently drawn up extensive plans of retailing and has even been scouting for relevant partners.

According to a MoU signed between the two, while 52 per cent would be on a take-or-pay contract with IOC, the balance would be sold through the joint venture marketing company.
However, now RPL has fulfilled conditions required to get marketing rights, and has approached the government for marketing rights of controlled products on its own.

IOC sources say, the proposal to form a joint venture along with a take or pay contract alone was beneficial to both the companies. However, if the purpose is defeated and the JV proposal does not work out, IOC will not go it alone to get into a take or pay contract.

According to the initial plans joint venture would initially be floated with a 50 per cent stake each, (50 per cent by IOC and the balance by Reliance), both companies would have the option of divesting up to 24 per cent of their individual stake.
It has been agreed that at no point will any of the joint venture partners have an equity lower than 26 per cent and will have equal stake.

The joint venture company would also have a separate logo and be market under separate brands. Sources said this would ensure competition, which would benefit the consumer.
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L&T prunes time limit for offering equal stake
Mumbai: Larsen & Toubro is planning to cut the time limit for offering equal stake to its strategic partner to about 18 months from 36 months.

This is after prospective bidders said that they wanted greater clarity on the extent to which they would be able to exercise management control in the cement company and
where they would stand after they pick up the first tranche of 26 per cent stake in the company.

Since the bidders are required to merge their existing properties into the L&T cement business and, therefore, no bidder wants to give up the option of exercising management control.

Industry sources said the decision to allow equal stake to prospective bidders, which include Holderbank and Lafarge, has been taken ahead of schedule, as the international cement giants were not ready to wait for three years to reach an equal shareholding.

The L&T deal is expected to fetch a premium given its large capacity almost one-seventh of the country's total capacity.
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Hero Honda may venture into scooter-making
New Delhi: India’s largest motorcycle-maker Hero Honda Motors on Tuesday said that it might begin making scooters by 2004.

Hero Honda, in which India's Munjal family and Japan's Honda Motor each hold a 26 per cent stake, has dominated the country's motorcycle market with its four-stroke fuel-efficient bikes.Under the agreement with Honda Motor, its joint venture partner, Hero Honda can start making scooters from 2004.

Atul Sobti, senior vice-president of marketing said that the domestic motorcycle market is expected to grow by 15 per cent in 2001/02 (April-March) and the entire two-wheeler market by at least five to seven per cent.

According to the Society of Indian Automobile Manufacturers, India's two-wheeler sales in the first 11 months of 2000/01 (April-March) were flat, growing a mere 0.44 per cent over the year-ago period to 3.4 million.

Hero Honda also said it would launch a 125cc and a 200cc motorcycle to add to its current portfolio of 100cc bikes and its 156cc CBZ model.

Motorcycle sales in India surged 22.2 per cent between April 2000 and February 2001 over last year, due to greater fuel-efficiency, sturdiness and higher resale value. Scooter sales fell 28.3 per cent during the same period.
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Glenmark applies for patent for new asthma drug
Mumbai: Glenmark Pharmaceuticals has filed global patent rights applications with drug regulators in different countries for its newly developed anti- asthma molecule, GRC-3015.

These countries include the highly regulated markets of the US, the UK and Australia. The new molecule belongs to a new novel drug delivery system (NDDS) called "phospho diesterase enzyme 4 inhibitor."

Globally only three other companies Glaxo SmithKline, Pfizer and Schering Plough have developed and applied for global patent rights.

Glenmark officials said preliminary studies have shown its GRC 3015 to have a very high activity in in-vitro (laboratory studies).

The molecule is currently undergoing pre-clinical trials and the company plans to file investigational new drug applications with different drug regulatory authorities within a year.

After filing an investigational new drug application, the company has plans to tie-up with multinational pharma companies for conducting clinical trials for the molecule in different countries.

GRC-3015 was developed by scientists at Glenmark's new research and development center that was funded through an IPO released by the company last year.

Glenmark was able to raise a little over Rs 50 crore through the IPO.

Ahead of the announcement, Glenmark shares rose a marginal 0.97 per cent to close at Rs 115 on the Bombay Stock Exchange.
The stock is trading at a huge discount to its issue price of Rs 200 a share.

Glenmark joins a small band of Indian companies breaking away from the industry tradition of reverse engineering drugs patented to multinationals -- which is allowed in India -- in order to invest in discovering its own drugs.
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Voltas, Videocon to be OEMs for Whirlpool ACs
New Delhi: Whirlpool, the US appliances giant said on Tuesday that it had signed up Voltas and Videocon to be its Original Equipment Manufacturers for supplying air conditioners.

Whirlpool India managing director Raj Jain confirmed this saying, "We have tied up with Voltas, Videocon and another Hyderabad-based company for supplying air conditioners."

The company had launched ACs last month after an initial test launch last summer. According to industry sources, Whirlpool's AC launch in India comes a year after it first test-marketed a small batch of ACs manufactured by Ahmedabad-based Amtrex Hitachi.
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Sebi wants Tata Finance’s clarifications
Mumbai: The Securities and Exchange Board of India (Sebi) has asked Tata Finance to clarify allegations of huge losses made by one of its subsidiaries - Nishkalp Investment & Trading Company - in investments in the secondary market.

Sebi’s interest is due to the fact that Tata Finance is in the process of collecting Rs 90.93 crore through a rights issue, which is currently open.
Sebi is exploring the angle whether the losses suffered by the company are enough to warrant "supplemental disclosures" by the company.

Sebi wants to know if the event is significant enough to warrant disclosures to the investors and if in the light of this disclosure some of the investors might like to withdraw from the issue.

However Subodh K Shah, president of Tata Finance said, "we are fully confident that the issue will go through and we will not suffer any adverse consequences of the allegations made."

Shah put the losses made by its subsidiary between Rs 60 to 70 crore "including the diminution in losses," that is, the notional losses suffered due to the depreciation in the value of the investments held by them.

Sebi has however taken the view that a loss of this magnitude would also be enough to impact the profits of the company.
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Parry scouts for strategic partner
New Delhi: Parry Neutraceuticals, part of the Rs 3,800 crore Murugappa group, is looking out for a strategic partner.

Ram Bajekal, chief executive officer, Parry Neutraceuticals said that the company is looking at a strategic partner and not a financial partner and has been approached by a few consultants acting on behalf of some foreign companies.
He said that apart from equity sharing, the partnership could take on other forms such as introduction of products, brands or research capabilities by the strategic partner. Its investment could also be in the form of supplier's credit.

Parry Neutraceuticals was set up last year by spinning off the neutraceuticals (products that lie between foods and pharmaceuticals) divisions of Parry Agro Ltd and New Ambadi Estates Pvt Ltd, a privately held company of the Murugappa group.

According to Bajekal, Ernst & Young is carrying out an interim valuation that will decide the shareholding in Parry Neutraceuticals by the two companies.

Parry Neutraceuticals current product line includes Parry's Spirulina and Parry's Natural Beta-Carotene. Almost 60 per cent of the company's turnover comes from exports.

The US is the main destination of its exports. It is now looking for similar marketing tie-ups in Europe and Japan.

According to Bajekal, the Indian neutraceuticals market, ranging from human nutrition supplement to animal feeds, is worth Rs 2,300 crore and is expected to grow to Rs 4,500 crore by 2003. "This makes it one of the fastest growing sectors in India," Bajekal said.
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IOC shelves plans with Enron
New Delhi: Indian Oil Corporation (IOC) has put on hold all its investment plans with Enron India following the Dabhol imbroglio with the government of Maharashtra and the central government.
According to the MoU signed between the two companies about six months back, IOC had agreed to collaborate with Enron on a host of important areas including LNG, liquid fuels, international trading of petroleum products, information technology besides the utilisation of infrastructure facilities developed by Enron for Dabhol Power Company. All these plans have now come to a standstill.

IOC says it has decided to adopt a ‘wait and watch’ policy as far as Enron’s future plans in India are concerned.

MA Pathan, chairman and managing director, IOC, confirmed that his company has deferred all its business plans with Enron for the time being.
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Tatas mull setting up greenfield power project in Gujarat
Ahmedabad: The Tatas are exploring the possibility of setting up a greenfield power plant in Gujarat state.

The group has for some time been trying to gain a major foothold in the power sector of Gujarat but was beaten by the Chinese multinational ‘China Light & Power’ in the acquisition of Powergen’s 650 MW Pagathuan plant here.

The Tatas have been testing the waters in Gujarat, in a bid to assess the viability of setting up a power plant in the state. The Tatas already have a 55 MW captive facility in Mithapur, which takes care of their power requirements, both for their chemicals complex and soda ash facility in the area. The company is said to be thinking of setting up a 200 MW gas-based facility in Gujarat. Sources in the power sector estimate an investment of around Rs 800 crore in a project of this size. While the location of the project too is not known at this juncture, sources hazard a guess that this would most likely be located either in the vicinity of gas-fields like Hazira or near LNG terminals such as Dahej or Bharuch.

The project, which is scheduled for a first phase commissioning by October this year, would become the first project of its kind in the state.
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M&M to focus on the premium end ‘Arjun’ model
Mumbai: Mahindra & Mahindra Ltd (M&M) is planning to focus on the high-end tractor segment with the "Arjun" series. The company has already sold over 600 units of its first - Arjun 605DI-60 HP in the domestic market since March this year.
M&M is also in the process of exporting its first consignment of 200 tractors to the US, where the model was launched simultaneously.

According to senior officials in the company the company wants to shift to the higher technology platform in the next 3-4 years and it feels that Arjun will establish its technical image.

M&M is planning to sell around 1,400 units by December this year they say.

The 60 HP model, a first from the Mahindra range has been priced in the retail segment between Rs 3.6-3.8 lakh. They also added that M&M was planning 3-4 variants of its Arjun series.

The total product development cost over the last three years has been around Rs 350 crore.

According to them the company has achieved significant growth in the previous year fuelled by the growth in Sarpanch and Bhoomiputra series. M&M currently has around 34 per cent marketshare in the Indian tractor market.
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Three advisors appointed for IPCL Vadodara unit buyout by IOC
Mumbai: Three advisors have been appointed by the Indian Oil Corporation (IOC) to carry out due diligence for the takeover of Indian Petrochemicals Corporation Ltd (IPCL) Vadodara unit.

Sources said that while the financial aspects will be looked after by the Bank of America, Kemps System will handle the technical aspects and the legal part will be handled jointly by Amarchand Mangaldas and Suresh A Shroff & Company.
The pricing of the unit will be decided after the advisors submit their reports, the time frame of which has not been fixed yet.

IPCL has already appointed Deloitte, Haskins & Sells for valuing the assets of its Vadodara unit. Deloitte has not submitted the report as yet, said sources. Even as the evaluation report of the plant is awaited, sources say that the estimated value of assets at the Vadodara complex, along with 22 individual plants is around Rs 2,500 crore.

The Cabinet Committee on Disinvestment (CCD) had taken the decision to hive off IPCL’s Vadodara complex to IOC on November 19 last year. The Department of Chemicals and Petrochemicals had issued a directive in mid-December that all formalities relevant to the implementation of the government decisions to hand over IPCL’s petrochemicals plants at Vadodara to IOC must be completed within a span of six weeks.
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Madura Garments launches readymade trousers for mid-market segment
Mumbai: Madura Garments has launched trousers for the mid-market segment, under the Peter England brand.
Announcing this, Vikram Gupta, executive-president (fabric and apparel) Aditya Birla Group said, this launch will make Peter England a leading men’s wardrobe brand.

He added that the company intends to launch jackets and blazers, followed by suits next.

The trousers are priced bewteen Rs 545 and Rs 845 and will be retailed through the company’s 3,000 outlets, Trouser Towns, Peter England exclusive showrooms and leading multi-brand outlets.
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