Star almost in control of UTV’s Vijay TV
Mumbai :UTV’s Tamil channel, Vijay TV, is now on the verge of being effectively controlled by Star TV. The latter has carried out a virtual backdoor takeover of by taking control of programming, content, distribution and airtime sales.

However, formally, Vijay TV continues to be owned by UTV, though all crucial functions have been franchised to Star.
With this Star’s bouquet in India grows to ten channels. This also represents Star’s first foray into the South and into the regional language market.

Vijay TV for UTV has been a constantly loss making organisation leading UTV chairman Ronnie Screwvala to open talks with Star to come up with a viable alternative.
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Warburg Pincus takes stake in Gujarat Ambuja
Mumbai :Warburg Pincus, a global private equity fund has zoomed in on Gujarat Ambuja Cement as an investment target. A couple of months ago, Warburg subscribed to the equivalent of about 2-3 per cent of GACL’s equity through foreign currency convertible bonds and is now believed to have picked up another 2-2.5 per cent of the company’s equity through secondary market purchases over the past few weeks.

The purchases have been in the range of Rs 180-190 per share and the total value of the investments made by Warburg Pincus in GACL may therefore top the Rs 200-crore level.
Warburg Pincus recently pumped in $ 200 million fresh investment into the Bharti group’s telecom business.

Industry sources, confirmed that Warburg has, through its FII licence for India, been a consistent buyer at the GACL counter.

Gujarat Ambuja is one of the fastest growing cement companies in India and has a capacity of about 8 m tonnes. It has also recently picked up a 14.4 per cent stake in ACC.
The GACL scrip has clocked a 52-week high of Rs 230.
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Movenpick may launch nation-wide chain of ice-cream boutiques
Bangalore : Movenpick, the leading Swiss ice-cream maker, after its product launch in Bangalore, may set up a nation-wide chain of "ice-cream boutiques".

Initially Movenpick plans to set up six boutiques in cities like New Delhi, Mumbai and Goa with each boutique styled like a Swiss caf.

The cost of each boutique is expected to cost around Rs 40-45 lakh and the company wants to grow the franchise way.
Movenpick’s South Asia general manager Neeraj Jain said that besides ice creams, the boutiques would also sell coffee Four such boutiques are currently operational in parts of South Asia.
The Movenpick range of ice-cream will retail at Rs 50 (for 100-ml pack), Rs 235 (for 500ml pack) and Rs 395 (for a one-litre pack). The range has already been introduced in six cities with launches scheduled in Chennai, Hyderabad and Kolkata."

The Super-premium ice-cream market is around Rs 50 crore.
Jain said that high import duties had forced the company to price its icecream at 30-40 per cent higher then comparable ones. The company imports its entire range of ice-creams from Switzerland.
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Tepid response to SAIL's VRS
New Delhi :Steel Authority of India’s efforts to reduce its work force have received a set back as its ongoing voluntary retirement scheme has evoked poor response on account of delays in revising wages.

Against a target of 10,000 personnel at April end, less than 2000 had applied for voluntary retirement highly placed sources said.
Looking at the poor response from employees, the corporation decided to extend the scheme by a month to May 15.
Sources said that since the scheme involved lump sum payment and was linked to wage revision, the employees were waiting for the new scales to be implemented before taking a decision, they said.

Last year 13,000 employees opted for voluntary retirement against a target of 10,000.
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ONGC and Reliance lock horns
New Delhi—Oil and Natural Gas Corporation and Reliance are both vying for oil and gas blocks offered under second offering of new exploration licensing policy.

While ONGC has bid, on its own or in consortium with Indian Oil Corporation, Gas Authority of India and Oil India, for 18 blocks out of the 25 blocks on offer, Reliance in consortium with Hardy oil is vying for 15 blocks, official sources said.

ONGC is fighting Reliance-Hardy consortium in six of the eight deep-water blocks on offer, including two each in Kerala-Konkan, Gujarat-Saurasthra and Mumbai basin, sources said.
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RIL's Jamnagar project gets PFC loan of $113.55m
New Delhi— The 500 mw Jamnagar Thermal Power plant of Reliance Industries has received a sanction of Rs $113.55 million from the Power Finance Corporation.

PFC chairman and managing director A Khan said $113.44 million (about Rs 525 crore) loan has been sanctioned for the Rs 3,150 crore 2x250 mw petroleum coke-based power plant of Reliance recently.

The 10-year loan to Reliance would carry an interest rate of 12-13 per cent.The project is to be commissioned in 42 months from the date of achieving financial closure and would have a debt-equity ratio of 70:30 (Rs 947 crore equity and Rs 2,210 crore debt).The project cost includes a foreign currency component of $453.34 million while the Rupee component is Rs 696 crore.Reliance is likely to retain 51 per cent equity in the project while offering the remaining to lending banks and financial institutions, Khan said but declined to say if PCF would be interested in picking equity in the project.
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MSEB will not pick up equity in DPC after phase II
Mumbai :The Maharashtra State Electricity Board is rescinding on its earlier plans to pick up 15 per cent equity in Enron-promoted Dabhol Power Company after the complete construction of the entire $3 billion power project in Dabhol.
A senior MSEB official said, "It is true that we had promised to take the 15 per cent, translating into infusion of around $65 million and given the serious financial stress the board is facing, it is not going to be possible for us to participate in the phase II of the project."

Currently, Enron International owns 65 percent; MSEB has 15 per cent, General Electric and Bechtel 10 per cent each.
However, MSEB has not sent an official intimation to the DPC in this regard, the official said, adding the board would inform the company soon after the completion of the project.
DPC's $1.87 billion phase II would be fired on June 7, 2001, thus marking completion of the 2,184-mw projects.
DPC, which received a Foreign Investment and Promotion Board clearance last December for its 1,083 crore foreign direct investment, has not been able to scout an alternative fifth partner for MSEB's equity.
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CGU wants to invest up to $50m in MF venture
New Delhi : CGU –the global financial giant would invest up to $50 million in its mutual fund venture which is expected to start operations by September 2001.Stuart Purdy, CGU life insurance chief representative manager said, "We would invest $50 million if we hold 100 per cent stake," adding the amount would be less if the asset management company were floated together by CGU and the Dabur group.

The proposed venture would be based in Mumbai.
Although CGU is yet to file application with the Securities and Exchange Board of India for the mutual fund venture, Purdy said the company plans to start operations in September this year.
The two companies would invest about Rs 110 crore initially in the proposed life insurance venture where Dabur group would hold a majority 74 per cent while CGU would hold 26 per cent, the maximum limit stipulated by IRDA.
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New India Assurance appointed by DPC to head insurance programme
Mumbai: Despite the uncertainty over the survival of Dabhol project, the Dabhol Power Company (DPC), has formulated an operational insurance programme for 2001-02, and has roped in New India Assurance to lead its insurance programme.
The insurance cover has been placed at a provisional cover of $11 million.

The DPC is required to maintain insurance during the construction period and commercial service under clause 15.1 and 15.2 of the power purchase agreement (PPA), DPC selected New India Assurance after thoroughly scrutinizing proposals from New India Assurance and United India Insurance on industrial all risks policy (IAR) and difference in conditions (DIC).

According to the common agreement and PPA requirements, the insurance should cover material damage, machinery breakdown, loss of profits, interruption of fuel supply or machinery breakdown and business interruption.

DPC has pointed out that IAR had additional coverages for design defect related losses and consequential business interruption, damage to pipeline and consequential business interruption and expediting expenses/offsite storage and inland transit.
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Jet Airways to commission Boeing 737-800 simulator
Mumbai : Jet Airways plans to commission its flight simulator by the end of this month after receiving the necessary approval from the Director General of Civil Aviation (DGCA).
Jet officials said that it acquired a six axis Boeing 737-800 simulator and a Boeing 737-400 flight-training device (FTD), from CAE of Canada at a cost of $16 million, which are now awaiting inspection and certification by the regulatory authorities.
Jet with about 360 pilots on its rolls with a fleet of 27 next generation Boeing 737s, has taken on lease over 10,000 square feet area at Nirlon House, an industrial complex in suburban Goregaon for setting up the simulator to train its pilots.
With the setting up of the simulator, the airline would save considerable amount of foreign exchange and time for pilot training, presently sent to foreign airlines in Amsterdam and Stockholm for simulator training.
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Compaq not to increase bid for Proxicom
Houston : US-based Compaq Computer Corp said that it had decided not to increase its $344 million bid to acquire technology consulting firm Proxicom Inc, following a rival bid from Dimension Data Holdings Plc. Company officials said that though Compaq still planned to "aggressively" expand its services offering, current economics do not warrant increasing the bid for Proxicom.

Last month Compaq agreed to buy Proxicom for $5.75 a share, valuing the company at about $344 million, according to regulatory filings. However on Monday, Dimension Data, a South African computer-networking concern eager to boost its
profile in the US, made a competing bid for $7.50 a share, or $449 million.
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United India Insurance wants administrative employees to boost business
Mumbai: Increasing competition among insurance companies has prompted Chennai-based United India Insurance chairman & managing director R Jagannathan to adopt a novel approach.

He has asked all of his company’s employees including administrative staffers to mobilise personal line of business for the company.Addressing the press Jagannathan said he feels doing business is not the responsibility only of development officers and the marketing department and says that he expects each of the company’s 15,000 employees (excluding the 4,000 development officers of the company) to at least garner Rs 50,000-60,000 worth of policies in personal line of business this year.
United India Insurance after recording a poor growth of around 3.5 per cent (premium income of Rs 2,449 crore) during 2000-2001 is targeting a robust growth of 15 per cent on the basis of new strategies.

The insurance company has completely revamped its business strategy. It will now frequently monitor its regional and divisional office performance, launch new products shortly, target major clients and expand its bases in the medium and small sector. Apart from negotiating with public sector banks including Andhra Bank, Indian Bank, Punjab & Sind Bank for selling its products, the company intends to appoint around 4,000-5,000 agents during the next four to five months to hawk its products.
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No secret deal to end strike says Balco chief
Raigarh: SC Krishan, managing director Balco says there is no secret understanding between Chhattisgarh Chief Minister Ajit Jogi and the company’s new management to end the more than two-month old strike by its employees in protest against its privatisation.

He stressed that that the chief minister acted for the betterment of Balco. As to how the strike ended he said Mr Krishan said there were many doubts in their (employees’) minds about the new management, which they were successful in removing.
Now, he said, the new management is busy reviving the plant and has drawn up plans to increase its production from one lakh tonnes to 2.5 lakh tonnes, and has also finalised plans for modernisation and extension of Balco.
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Damanis increase deposit by Rs 30.5 crore in escrow account for VST
Mumbai: For the sake of a larger control of VST Industries, the Damani brothers controlled Bright Star Investments has deposited an additional Rs 30.5 crore to their merchant bankers — ASK-Raymond James—in the escrow account maintained for the takeover of VST.

With this the total amount deposited with Bright Star’s merchant banker stands at Rs 44 crore, Rs 9.41 crore more than the actual amount of Rs 34.59 crore required to acquire additional 30,88,384 shares (or 20 per cent equity stake) in VST.

Currently, Bright Star holds 14.97 per cent in the VST’s equity of Rs 15.44 crore.After Sebi cleared Bright Star’s open offer on Thursday last, its fresh bid for VST will now open on Tuesday May 15.It may be recalled that Russel Credit — a subsidiary of ITC Ltd — has made an open offer for VST at Rs 115 per Rs 10 equity share of the latter.

This move by Bright Star’s to increase the escrow account in favour of ASK-Raymond James with HDFC Bank, is being seen by marketmen as a possibility of its raising the offer price to around Rs 150 per one Rs 10 equity share of VST.
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Bajaj Auto explores unique marketing strategies
New Delhi: Bajaj Auto positioned as the son of the Indian soil in scooters as it were is exploring different marketing strategies. Amid the various Bajaj models on display at its showrooms are scooter models from Piaggio and Aprillia of Italy and Honda of Japan. what in the world is it up to?

According to the company’s in-house market research, it pays to ask people if they would like to drive such scooters. This would elicit customer response to these models.

In particular, Bajaj Auto is planning to utilise the response of the consumers to develop designs of new scooters and to add new features.

These rival models being shown by Bajaj Auto are knocking on the doors of the Indian scooter market— the largest in the world.

Honda Motor Company has a fully-owned subsidiary in India, Honda Motorcycle and Scooters and India Ltd. It is slated to launch a gear-less scooter, Activa, next month.

Piaggio, which earlier had an equity stake in Kanpur-based LML Ltd, is known to be keen on setting up a subsidiary in India as well as picking up the state-owned Scooters India Ltd. Bajaj Auto’s research is also part of a larger initiative to check the sagging fortunes of the scooter market.
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Indal to exit Orissa Extrusions soon
Mumbai: Indian Aluminium Co (Indal), the newest member in the Aditya V Birla group stable, will soon exit Orissa Extrusions (OEL).

Orissa Extrusions is a joint venture between Norsk Hydro of Norway, the Orissa government and Indal.

Hindalco, which controls about 74 per cent of Indal, was directed by the Board for Industrial and Financial Reconstruction (BIFR) to submit a rehabilitation proposal for the ailing OEL to ICICI, the operating agency.

According to a study conducted by ICICI, the cost of the rehabilitation was estimated to be only around Rs 15 crore. Low capacity utilisation was the primary reason for poor sales. The unit employed around 150 workers.

ICICI was to submit the report after examining the rehabilitation proposal to the bench appointed by the BIFR.

Hydro, Norway, had, however, refused to participate in the scheme at the very beginning as it was never involved in the management of the company.
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Bharat Biotech launches diarrhoea drug
Hyderabad: Bharat Biotech International Ltd has launched Biogit, the country’s first indigenously manufactured probiotic yeast,a therapeutic agent for diarrhoea and other intestinal dysbiosis.

Dr Krishna Ella, managing director of Bharat Biotech said Biogit is a lyophilized preparation of live cells of yeast and is made through fermentation.

Biogit has the ability to impact gastrointestinal tract by restoring the disrupted microbial balance, he said. The 250 mg sachet of Biogit is priced at Rs 25 against Glaxo’s price of Rs 30.

Till now, Glaxo was the only player in the Rs 14 crore market for the product in the country.
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KMFL ventures into vulture financing
Mumbai: Kotak Mahindra Finance Ltd (KMFL) has launched vulture financing.

This essentially means buying out bad assets of non-banking finance companies (NBFCs) at a discount and recovering the amount from the debtors.

Venkattu Srinivasan, vice president, KMFL said this new line of business would be the focus area of KMFL's asset reconstruction division in the current financial year.

Srinivasan said, "This business is risky but at the same time very profitable. We can even earn a 100 per cent spread in some cases."

KMFL launched its asset reconstruction division last year. This has been engaged in the recovery of non-performing assets of banks, management of asset portfolios NBFCs and recovering dues of the manufacturing and service providing companies.

It recovered a total asset of Rs 120 crore till date with success rate in case of NPA recovery is around 20 per cent.
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IFCI may induct a strategic partner
New Delhi: Cash-strapped IFCI is pushing a case for roping in a strategic partner.

However sources say roping in of a strategic partner, hinges on a number of other issues including a better capital adequacy ratio.

Executives at IFCI say that the institution wants that it should be given the permission to rope in a strategic partner. An executive with IFCI says that the company will not get a good partner if its financial position does not improve. For that it needs the Rs 400 crore infusion suggested by the expert committee (headed by former State Bank of India chairman D Basu), said an executive.

Finance ministry sources, however, said that there is no fixed line of thinking on the way the government would help in improving IFCI’s position. Officials say that at the moment all the options are under consideration and merger is one of them. Even the option to provide the Rs 400 crore assistance is under consideration.
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