Hutchison; major contender for the 4th licence
Kolkata--Hutchison Telecommunications the Hong Kong-based telecommunications giant and the largest private cellular operator in India, is in the final leg of bidding for the fourth cellular licence.
Reliable sources said that Hutchison has set aside close to $700-million (about Rs 3,500 crore) to pitch for six of the fourth cellular licences.
Hutchison plans to bid for the metro circle of Chennai, the five lucrative regional circles of Maharashtra, Punjab, UP (West), Andhra Pradesh and Karnataka. The deadline for submission of bids is June 29.
Hutchison will bid for all six circles in partnership with the Essar Group.
Though the bankers advising the company on the bidding are yet to be unconfirmed, sources close to Hutchison said that some of the world’s biggest names -- like Goldman Sachs, Morgan Stanley and HSBC -- advised the company at various stages when it progressively acquired the Mumbai, Delhi, Kolkata and Gujarat circles earlier.
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Modi open offer for MRL void, FIs tell Sebi
Mumbai—The financial institutions, which hold a 44 per cent stake in Modi Rubber, have informed the Securities & Exchange Board of India that the open offer by the promoters (the Modis) was null and void. The institutions argue that the offer has been delayed by the promoters and should have opened on May 16 and not June 4.
Friday is the last day for the Modis to come out with a revised offer and also enter into any off market deals with bloc stakeholders like the FIs and Purnendu Chatterjee to purchase shares over and above the open offer route. The offer closes on July 3.
In earlier negotiations with the FIs the Modis had indicated a price of over Rs 90 a share for buying out the entire 44 per cent stake of the FIs. The open offer price thus took the FIs by surprise.
But recent developments have overtaken the Modis. They were clueless that the NRI investor Purnendu Chatterjee was controlling 13-14 per cent in the company. If Chatterjee, joins hands with the FIs, then the Modis with 24 per cent stake would lose control over MRL.
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Purnendu Chatterjee to declare Modi Rubber holdings
Kolkata--The Securities and Exchange Board of India, Sebi, wants Purnendu Chatterjee of the George Soros Group to declare details about his holdings in Modi Rubber in the light of failure on his part to report to the company (MRL) when crossing the 5 per cent shareholding mark as per the Takeover Code norms," said Sebi sources.

Chatterjee is believed to have acquired 13-14 per cent holding in MRL and has not reported to the company and the stock exchange as mandated by the Takeover Code.

Financial institutions have decided not to participate in MRL’s open offer made by promoters, which include BK Modi and VK Modi, and instead may make a counter-offer.

Industrial Development Bank of India, the lead financial institution has said that there were serious lapses in management and corporate governance practices followed by MRL management and that the revised offer of Rs 81.50 per share was not in line with the indicative offer made by B K Modi and V K Modi to the institutions earlier for acquiring FIs' holding.
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BSES scraps Gautami Power buyout
Mumbai—BSES, the Mumbai-based power major has cancelled plans to acquire the 360-mw Gautami Power project in Andhra Pradesh promoted by the Rajus of Satyam Computer Services.

Top company sources at BSES say that the Gautami Power project exists only on paper and it makes more sense for BSES to expand its 220-mw power plant at Samalkot in Andhra Pradesh subject to the permission by the state government.

BSES had been in talks with the Rajus for buying out their stake in Gautami Power and was eyeing a controlling stake in the company.
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Shyam Telecom's plans to offload stake fizzle out
Mumbai--Shyam Telecom's plan to divest 49 per cent stake to a strategic partner for its basic services firm, Shyam Telelink and cellular company, Hexacom India, has been deferred indefinitely owing to the downturn in global telecom market. Mainly the company has not been able to identify a strategic ally for its plans.

Sources close to Shyam Telecom said that leading firms, with which discussions were on for some time, backed out of the negotiations as it found market conditions turning bleak.

Sources say that the company main aim was to rope in a partner to bring additional expertise in basic and cellular projects, in addition to funds.

Shyam Telecom had also been looking at expanding its business in basic, and cellular through fourth mobile licenses with additional funding.
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CCEA nod for Rs 5,000-cr RPL GDRs
New Delhi—The Cabinet Committee on Economic Affairs, CCEA, has approved Reliance Petroleum’s, RPL, proposal to raise up to Rs 5,000-crore via a GDR float, and at the same time has given the green signal to a $150-million ADR issue of HDFC Bank.
Thus CCEA has approved Reliance Petroleum proposal for disinvestment of up to 780 million equity shares held by Reliance Industries in tranches. The divestment will take place through GDRs, issue of foreign currency convertible bonds and ordinary shares. The shares proposed to be offered for divestment represent 14.99 per cent of the paid-up capital.
The GDR issue is expected to yield between $750-1,000 million, which works out to Rs 3,500-5,000 crore at current market prices.
Reliance Petroleum’s proposal involves issue of GDRs against existing shares held by promoters -— the Ambani family-controlled Reliance Industries, RIL— and non-promoter shareholders.
RIL, which holds a 64 percent stake in RPL, proposes to bring down its stake to 51 per cent post issue of the GDRs. This would involve sale of some 67.60 crore shares to strategic and financial investors overseas.
This is the first case where GDR offering is being made against existing shares.
CCEA also cleared the proposal of HDFC Bank for international equity offering of $150-million with a right to retain over-subscription up to 15 per cent of the issue size.
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HFCL-Nine; to go off air
New Delhi--HFCL Nine Broadcasting India, the HFCL-Kerry Packer joint venture, is shutting down its television business in India and from September 10 the company’s programmes on the DD-Metro channel will cease to go on air the company has said.
The company has decided not to bid for the prime time slots on DD-Metro because it says DD Metro’s terms were "unrealistic." The tender terms said new media and Internet rights would belong to DD and the clause preventing reruns of progrmmes for one year after the final episode could date programs by more that two years before replay, thereby reducing their value. Nine also objected to DD reserving the right to terminating the contract without notice and without reason making it "a pointless contract."
Nine Broadcasting has given notice to its employees, numbering about 60, that their services are to be terminated from September 10. A core team of around 8-10 senior management personnel would look after the company’s interests thereafter.
While Nine was shutting its television business, other projects like the film production ‘Agni Varsha’, scheduled for release by the end of the year, would continue said a company source.
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Lucent, Convergent in Net tie up
Bangalore--Lucent Technologies, the US-based networking giant, has announced the appointment of Convergent Communications India, a Bangalore-based networking solutions provider, as its business partner in India.
Thus Convergent will market and support Lucent's networking products and solutions such as broadband and dial-up remote access, wireless access and next-generation scaleable switching solutions to the service provider and enterprise networking market segments.
Lucent Technologies' president and chief executive officer, Vijay K Gupta said, "Lucent Technologies will further enhance its distribution network in India. Convergent will also have the clear advantage of having access to unique combination of world-class technology, service and help us further consolidate our position in the Indian networking market," he added.
The alliance is part of Lucent Technologies recently-launched Asia/Pacific business partner advantage programme, which supports a multi-channel distribution strategy encompassing value-added resellers, distributors, systems integrators and independent software vendors.
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MIT Media Labs Asia to set up head office in Mumbai
Mumbai—The Massachusetts Institute of Technology's (MIT) research centre in India, MIT Media Laboratories Asia, is planning to set up its head office in Mumbai and the Maharastra government in the form of the Maharastra Industrial Development Corporation and Sicom will provide infrastructure support to it.

The Government of India will fund the exploratory program in the first year. The total cost of the project is around $ 1 bn and GoI will invest around 20 per cent or around Rs 870 crore over the next ten years in the venture.
The objective of MIT Media Labs Asia is to take technology to the masses and to facilitate the faster adoption of technology in the rural areas.
MIT Media Labs in the US is funded by the private sector with more than 180 companies funding the annual budget of $ 35 m for the labs.
As part of its exploratory program MIT Media Labs has already identified some projects and will be working with the IITs to develop these projects.
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Tata Power plans acquisitions; seeks PFC loan
New Delhi—It is believed that Tata group company, Tata Power, is planning to make a number of acquisitions in the power sector. The company has secured a Rs 500 crore loan from Power Finance Corporation and the Delhi-based power finance company has asked them to present a further detailed project report of its proposed acquisition plans.
PFC officials said that this would be the first time that it would be providing finances for acquisitions. PFC has taken a decision recently to also make available funds to companies for acquisitions specially for taking over underperforming plants being operated by state electricity boards.
The Tatas are also said to be one of the main contenders to take over the Enron-promoted Dabhol power project in Maharashtra along with US-based AES Corporation and the Reliance group.
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Condor may have to make open offer for TCI
Mumbai— German leisure company, Condor & Neckermann Touristic will probably have to make an open offer to acquire a controlling stake in Thomas Cook India as its proposal for indirect control was defeated at the company’s extraordinary general meeting held on June 8.

Last year the German company acquired the UK travel major -- Thomas Cook Holdings, which in turn has an equity stake of 40 per cent in Thomas Cook India.
Though C&N Turistic had approached the Securities and exchange board of India, Sebi, to be exempted from making an open offer, the regulator had told C&N Touristic to seek shareholders approval for an exemption. However, this proposal for indirect control was defeated at the extraordinary general meeting held on June 8.
Besides Thomas Cook UK which has a 40 per cent equity stake, other shareholders are: State Bank of India which has a 15 per cent equity stake, UTI holds close to 5 per cent of equity and the public holding is 40 per cent.
According to Sebi guideline, an open offer has to be made for a minimum 20 per cent equity. Company officials have indicated that C&N Touristic is keen on a 51 per cent stake.
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Premium version of Bolero launched
Mumbai—Mahindra & Mahindra has launched its premium multi-utility vehicle, the seven-seater Bolero GLX, which is priced at Rs 5,28,200 (ex-showroom price at Thane), and is equipped with a 2.5 litre, 72.5 bhp diesel engine and a synchormesh five speed gearbox, according to a company release here.
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Bechtel, GE pull out workforce from DPC
Mumbai—Even while the Indian lenders are planning to take an additional exposure on the Dabhol power project towards covering the $400-million cost overrun, Bechtel and GE of the US, the engineering and construction contractor and equipment supplier, respectively, have pulled out the workforce and equipment from the project site at Dabhol.
IFCI is unlikely to take fresh exposure and offshore lenders according to sources have refused to make any disbursements towards funding the cost overrun and were said to extremely unhappy about the delay by Stone & Websters, the engineering consultants of lenders, in submitting the report.
According to FI sources, the cost overrun would go up by around $20 million for every month the project is delayed. The engineering consultants had also looked at the possibility of changing the construction contractors, but warned the lenders of incurring huge losses if they did this.
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Taj group expansion plans
New Delhi—The Tata Group is believed to be looking for a joint-venture partner to acquire luxury hotels in the United States and is eyeing luxury hotels in New York, West Coast and one or two other major cities in the country. The group is also planning acquisitions for setting up luxury hotels in Bali and Phuket according to RK Krishna Kumar, Indian Hotels managing director.
The Tata Group recently registered as a company under the name of Taj US.

Although the Tata Group had earlier estimated $250 million for the acqusitions, Kumar said the amount of investment would be announced after the JV partner had been finalised.
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Taj group and ASI to conserve Taj Mahal together
New Delhi—The Taj Group of Hotels and the Archaeological Survey of India have come together to preserve and upgrade facilities at the Taj Mahal complex in Agra.
In a project lasting 15-months, not only will the two conserve the monument, but will also develop some of the 33 lost Moghul gardens around the Taj complex. Besides this, the two plan to do a collaborative study on long-term preservation of structure itself.
The Indian Hotel Company, a Tata Group company, will invest Rs 1.87 crore in the first phase of upgradation of tourist facilities, putting up new lighting system around the monument, development of gardens, cleaning up the surroundings, pathways and the fountains. This is supposed to be completed by December, 2001.
The funding undertaken by the Tatas will not involve complete takeover of the monument by them. The property will still be with the Government of India and the revenue generated by the tickets and renting of souvenir shops around the monuments will go to the government exchequer," said Komal Anand, director-general, ASI.
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Chauhan in JV for Bisleri
New Delhi-- Ramesh Chauhan, chairman of the Rs 250-crore Bisleri group, is believed to be currently negotiating a joint venture with two potential partners, Danone of France and Nestle of Switzerland.
According to his plans Bisleri will hold a majority 51 per cent in the JV and the foreign partner a 49 per cent stake.
Mr Chauhan is expected to remain the chairman and managing director of the new joint venture and will be fully involved in the operations of the company. Further, the eight to 10 different companies that now form the Bisleri group will be merged into one entity and the foreign partner is expected to take a stake in the merged entity.
Though a deal has not been consummated a deal with either of the companies the negotiations appear to be in an advanced stage.

Bisleri has manufacturing operations in at least 18 cities across the country. There are plans to hike the Bisleri group turnover four-fold from the current Rs 250 crore to Rs 1,000 crore within two years.
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Tatas, Birlas, L&T and CESC final contenders for Kanpur power zone
Mumbai-- The Uttar Pradesh state government has shortlisted Tata Power, the Birla group, Larsen and Toubro and CESC for the privatisation of the Kanpur distribution zone of the Uttar Pradesh State Electricity Board (UPSEB).
Banking sources say that the four contenders have submitted their expression of interest (EoI) for the privatisation process. However, the company is open to preliminary bidding for interested parties in the pre-qualification round before the final round of bidding is called for divestment and offering up of 51 per cent equity in the distribution company.
Uttar Pradesh (UP) is the third state to open up power distribution to private investment in order to make it an efficiently run distribution system. However, the second round of final bidding will happen after the UP state elections are over, said banking sources.
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Birla Sun Life Insurance sets up subsidiary to distribute products
Mumbai--Birla Sun Life Insurance is setting up a subsidiary to distribute its insurance products and is now believed to be in the process of working out the modalities.
The subsidiary route for distributing insurance products is faster since the modalities of ‘corporate agency’ are yet to be worked out. Officials of the Insurance Regulatory Development Authority (Irda) also feel that instead of waiting for the regulatory guidelines to be framed, the faster option is to form a subsidiary for distributing insurance products. The amendments to incorporate the necessary changes in the Irda Act will have to wait.
The company does not have any plans to sell the products of any other insurance company. Irda guidelines permit the selling of the product of only a company by a corporate agent.
One of the major reasons for forming a separate distribution company is that the directors of the distribution company have to be licensed by Irda to sell the products for which they have to take the Irda examination.

Birla Global will be focussing on its mutual fund (MF) and life insurance business as part of its overall strategy. The company has already tied up with Citibank and Deutsche Bank and is also going to tie up with non-banks in the local and regional level like Dewan Housing and Blue Chip and on the national level like Bajaj Capital.
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