Enron may find few takers for its stake
New Delhi: Given the troubles that have besieged US power major, Enron’s, seven year stay in this country, there is an opinion that there may not be too many takers of its stake when the company decides to exit from the country.

With grand plans for India, the energy major had floated many ventures - from gas to pipelines and broadband. Given today’s problems the company would want to reduce its exposure to a minority stake even in its premium project the Dabhol Power Company in Maharashtra.

One point that even its detractors concede is that despite all the problems Dabhol Power Company is among the few success stories as far as foreign investments in infrastructure is concerned. Notwithstanding this, the general view is that Enron would find it difficult to get buyers for its stake in the company. Industry sources say that every company will think twice before getting involved in such a politicised project.

The controversy between the power company and the Maharashtra state government, which began in the last quarter of 2000, is now beginning to take an ugly turn with the company filing arbitration cases and the state government unwilling to see reason.
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Hindustan Lever makes International Bestfoods its subsidiary
Mumbai: With the board of directors of International Bestfoods approving the transfer of 75.38 per cent of its equity to Hindustan Lever, International Bestfoods has become a subsidiary of Hindustan Lever with effect from Saturday. The equity was earlier held by Bestfoods USA. With this, the shareholding of HLL in IBL has gone up to 83.36 per cent.

The transfer was a sequel to the acquisition/merger of Bestfoods USA with Unilever in October 2000.

In October last, HLL with Unilever made an open tender offer for the remaining 24.62 per cent of IBL equity at Rs 173 per share. Only 7.99 per cent shareholding was tendered in response to the offer.
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Hyundai unit to set up offices in India
New Delhi: Hynix Semiconductor, a division of Hyundai Electronics Industries, has decided to set up offices in Bangalore and New Delhi, to develop the Indian market and work out collaborations in various areas, including application specific integrated circuits.

Since it has been spun off into an independent company earlier this month, Hynix Semicon is keen to expand presence in several fields. Earlier, Hyundai Electronics was looking after its India business through its Singapore office.
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TCIL to launch internet access services in June
New Delhi: The Telcommunication Consultants India announced that it will be laundhing its much-delayed internet access service by June-end. The company has entered into a 51:49 joint venture with the US company JMS worldwide for this purpose.

TO be launched more than a year later than planned, the initial roll-out will be in five cities including the four metros and Bangalore.

In the next phase, TCIL would expand the internet access services to 12 more cities and by the year-end it would roll out its services in 32 cities.

The company is also planning to enter satellite-based telephone services to offer connectivity where basic and wireless phones are difficult to operate like high terrains and remote areas.

TCIL is also hopeful of starting the basic services in Bangladesh for two lakh villages this year in partnership with MTNL and Sam Pitroda-promoted Worldtel. TCIL-MTNL is holding 30 per cent in the venture.
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Ranbaxy’s woes increase with UK arm
New Delhi: Already mired in several financial problems, leading domestic pharma company, Ranbaxy Laboratories, is facing yet another major loss with the discovery of financial malpractice by its UK operations.

Already burdened by the losses created by its investment subsidiary, Vidyut Investments on its share market operations, the financial bungling by its UK operations is said to be to the tune of some Rs 40-45 crore.

Following this, the top management team of Ranbaxy UK has been axed and a new team put in place.

According to reports it is understood that the financial irregularities were related to some over-invoicing, under-invoicing practices in the company’s transactions with other companies.

The new management is understood to have already initiated rearguard operation to at least partly recover the lost amount.

Ranbaxy UK was headed by Anil Sharma who has since been replaced by Sugato Bhattacharya, earlier in charge of the Vietnamese operations.
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Fiat to boost Palio sales through more dealers
Mumbai: Fiat India, which is planning to launch its much awaited Palio model later this year, has embarked on a major restructuring of its dealership network.

The Italian car major is said to be adding 15 new dealerships over the next two months, thus taking its total dealership base to 70. Besides, the company is also attempting to revamp the old dealerships, which had been earlier dealing in Premier vehicles.

Following this addition, 70 per cent of the company’s dealerships would just be two years old. Besides, the company is also increasing our service points to around 150 for servicing the customer better.

According to Fiat India managing director MP Bianchi: "All efforts are geared towards making the Palio a major success. We are improving the quality of our vendors and dealerships."

The company, which has pumped in $250 million for the Palio project, expects the car to increase its export volumes, besides helping it catapult into the big league. The company expects the Palio to sell around 50,000 units a year.

An early entrant into the Indian automobile scene, Fiat India, which has its Uno, Siena and Siena Weekend on the roads, has been left behind in the volumes game.
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Torrent seeks alliances to develop & market NCEs
Mumbai: In its attempt to develop molecules and market them globally, Ahmedabad-based Torrent Pharmaceuticals is said to be scouting for alliance partners for the three novel chemical entities that it has developed.

The company is understood to have sent dossiers to global pharma majors and has also listed its innovations on ActiveCyte, an e-market for pharma and biotech products.

Of the three products, the first code named TRC—30X, has passed the preclinical stage and clinical trials on the drug is expected to commence shortly. The other two products, coded TRC—2XXX and TRC— 41XX, are still in the pre-clinical stage.

Two of the three products are cardiovascular drugs used in regulating heart beats. The new molecules reportedly have a better safety profile compared to some of the other antiarrythmic drugs like Flecainide, Enacinide and Morizicine, as has been inferred from pre-clinical trials.

The third molecule is a therapy for diabetes and aging related complications of the circulatory system. Currently, there are no drugs available to treat diabetic vascular complications. The only possible competition is from Alteon, a US based company has developed a molecule which has recently completed Phase 2(a) clinical studies.
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Dr. Reddy’s appoints US executive for its American board
Mumbai: Reddy US Therapeutics, the Atlanta-based subsidiary of Dr Reddy’s Laboratories, recently appointed Bruce Carter on its board of directors. Mr. Carter is currently president and chief executive officer of American bio-pharmaceuticals company ZymoGenetics.

ZymoGenetics is an affiliate of Danish drug major Novo Nordisk. Novo, which incidentally has also in-licensed two diabetes compounds discovered by Reddy’s Indian research arm.

According to Dr. Anji Reddy, chairman, Mr. Carter’s induction will go a long way in boosting the company’s R&D efforts in Atlanta.

Reddy US Therapeutics is involved in drug research using its own proprietary platform.
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Wind power to spur Kalyani Group company
Satara: BF Utilities, the new company formed when Kalyani Group flagship, Bharat Forge, spun off its wind mills and related investments, is looking at setting up renewable energy projects and is in the process of setting up additional wind energy generation capacity.

The company hopes also to offset parent company’s power consumption and avail the attendant tax benefits.

BF Utilities windmill project at Thoseghar, about 1,140 metres above sea level,, currently generates 12 MW and by December 2001, is expected to generate another 15 MW, taking the total to 27 MW, with a total investment of Rs 170 crore.

This is part of the group’s bigger focus, of the utility company generating green power for its entire manufacturing needs and being positioned to partner with overseas utility companies who are expected to set up shop in the country in the next two years.

According to Mr. Baba Kalyani, chairman of the Group, being in power-intensive businesses, manufacturing forgings and steel, the group has to look for renewable sources, for long term, cheaper power.

The new company will also look at offering equity to foreign utility companies who are keen to enter the country to set up renewable energy programmes.

BFUL is looking to create capacities to generate another 40-50 MW over the next two to three years. And the routes it is planning to use are small hydel (hydro-electricity) and bio-waste plants in addition to the wind power.
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Maruti to foray into insurance broking
New Delhi: India’s leading automobile manufacturer, Maruti Udyog, is likely to get into marketing of insurance products as part of its plans to diversify into the lucrative services sector.

The company has created a master plan, called Project Vistaar, in consultation with AT Kearney, under which it would provide Maruti car owners a wider choice, including motor, personal accident and health insurance coverage.

The company is awaiting a notification from Insurance Regulatory & Development Authority with regard to insurance brokers, before finalising the plan.

The company will get into insurance brokerage as it would be possible to sell products of more than one insurance firm, which was not possible for an agent under the current IRDA norms. The government is expected to amend the Insurance Act of 1938 to replace the word "agent" with financial intermediaries to allow insurance brokers in the sector.
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Godrej Sara Lee to acquire Bangaldesh brand
Mumbai: In its attempt to make a foray into the neighbouring countries, Godrej Sara Lee is understood to be close to acquiring "Elephant King", the third largest mosquito repellent brand in Bangladesh.

According to company sources, an internal due diligence process has been kicked off, based on which Godrej Sara Lee will carry out the acquisition in the next 2-3 months.

The company is said to be looking for good acquisition targets to enter new markets such as Bangladesh, Sri Lanka, Egypt and the Middle East.

In Bangladesh, where the process of registration is tedious, the company is eyeing the third rung brand of mosquito repellents. This brand acquisition will help the company make inroads for it to market its leading Indian brand "Good Knight" into Bangladesh.

The leading mosquito repellent brand in Bangladesh, which is mainly a coils market, is "ICI".

The company is also looking at South Africa to establish a base. It exports products to certain global markets and has been looking at establishing a distribution network in some of these markets.

The company is the world’s largest manufacturer of mosquito mats with 66 per cent market share in mats in India. Prominent brands in its portfolio include, Good Knight, Jet, Hit and Hexit.
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JP Morgan Chase to advise Videocon on VSNL bid
Mumbai: Leading investment bankers, JP Morgan Chase, has been appointed advisor to Videocon Communications for its bid to acquire a 25 per cent stake in Videsh Shanchar Nigam Ltd (VSNL).

Videocon Communications is a joint venture company of the Videocon group with Japanese majors Mistubishi and Toshiba where each holds around 25 per cent stake.

Videocon is also believed to be in talks with various multinational companies for technical partnerships.
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Reliance in talks with VSNL NLD services alliance
Mumbai: Reliance Infocom, the new giant from the Reliance stable, is said to be in serious talks with state-owned Videsh Sanchar Nigam for a possible mega-alliance for the latter’s proposed national long distance (NLD) telephony foray.

It is understood that VSNL, which is planning a major foray into the NLD segment, may lease optic fibre capacity from Reliance Infocom for the next 25-30 years, in a deal that could be valued at thousands of crores.

According to industry sources, if the divestment of equity in VSNL does not go to Reliance, which has made a bid for the stake, the proposed alliance may be in jeipardy. This is because the other bidders for the satek, the Tatas and the Bharti group, are also setting up their own national optic fibre network.

The main objective of VSNL is to avoid any further delay in offering the NLD services. Hence, the natural option is to bring in a telecom company with enough broadband capacity to connect the entire nation.

Depending on the final nature of the deal, VSNL may eventually decide to drop plans for its own backbone in order to help the company save significant investments.
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Mangalore Power Company to halve project capacity
Mumbai: The new promoters of the Mangalore Power Company, China Light & Power and the Tatas, are understood to be in the process of halving the capacity of the 1,000 mw mega power project in the first phase.

This is in keeping with the poor financial health of the electricity board of Karnataka, is to avoid another Dabhol-like situation.

According to the new promoters, demand in the coming quarters is expected to remain weak and they would set up the second phase only after 3-4 years, when demand for power could improve.

Sources also pointed out the lack of an adequate security mechanism in the state. This leads to the critical question of how the SEB will pay for the power purchased. This is another argument for implementing the project in two phases.

The original promoter of the project was US -based power major Cogentrix, which walked out of the project citing delays in government clearances in December, 1999.
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DPC seeks lenders approval to exit power project
Mumbai: Enron-promoted, Dabhol Power Company, is having a crucial meeting with its lenders at London, where it will seek their approval to exit from the $3 billion power project in Maharashtra.

The meeting is crucial as the DPC board is meeting on April 25 in London to discuss the issue of serving a termination notice to the Maharshtra State Electricity Board (MSEB). DPC cannot go ahead with this unless it gets the go ahead from the lenders.

According to a highly placed source in the lenders consortium, even if only four per cent of the lenders agree to terminate the contract then DPC can do so.This in effect means that only one lender has to agree for DPC to serve a preliminary termination notice.

Following the notice, there is a cooling off period of six months for both parties (the MSEB and DPC) to find a mutually acceptable solution, which may take the form of a re-negotiated PPA, sources added.
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Mahindra Gujarat to rev up production
Ahmedabad: Mahindra Gujarat Tractors, the company taken over by the Mahindra Group, has drawn up a concrete plan to pump in Rs 24 crore over the next two years with a view to raise production capacity and cutting work force by laying off 70 people though a voluntary retirement scheme.

The plan envisages setting up a new manufacturing facility near Vadodara and refurbishing the existing unit to raise the installed capacity from 2,000 to 10,000 tractors a year.

While Rs 15 crore towards is expected to be raised through sale of a vacant plot of land owned by the company, the balance is expected from the Gujarat government, which owns 40 per cent of MGTL.

Mahindra Gujarat Tractor also formally launched its new 40 HP model, called Hindustan, at at an all-India dealers meet in Vadodara. According to Rajiv Sarin, the chief executive officer of the company, the new model has been very well received by over 100 dealers who had come from different parts of the country.

With the launch of this model, MGT attains the distinction of being the only tractor company in India to manufacture the widest range of models in the 30 HP, 40 HP, 45 HP, 50 HP, 60 HP and the 80 HP category.

MGTL was converted into a joint venture after the Mahindras acquired a 60 per cent stake in the erstwhile Gujarat Tractor Corporation Ltd in December 1999.
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Singapore Airlines to provide inflight e-mails
Singapore: Leading commercial airline opertor, Singapore Airlines, is investing S$300 million over the next two years to equip its aircraft with e-mail and new entertainment system.

Both systems would progressively be installed on its entire Boeing 747 and 777 fleet. The first trial installation was done on one Boeing 747-400 aircraft flying between Singapore and Los Angeles.

This makes Singapore Airlines the world’s first airline to offer inflight e-mail system using satellite-based communications network. It said a dedicated server on board would download and store web pages to allow passengers to browse through.

The inflight e-mail system, supplied by US-based Tenzing Communications, and Web access system is connected to Matsushita Avionics System’s new MAS3000 inflight entertainment system, which would help upgrade its existing one.
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