New Delhi: Tata Teleservices is looking at disposing off its 49 per cent stake in its tower subsidiary Wireless Tata Telecom Infrastructure Ltd in the next two months. The company has short listed as many as 15 bidders which include tower companies such as GTL and Quipo. TTSL has over 10,000 towers, while Tata Teleservices (Maharashtra) has 3,500 towers. Bharti Infratel, which has nearly 50,000 towers, had recently divested 10 per cent stake to global investors for about $1 billion giving it an enterprise value of $10-$12.5 billion. Reliance Communications'' tower business was valued at Rs 28,000 crore for 14,000 towers in 2007.
Monday, March 10, 2008
LIC Housing To Set Up Real Estate Fund
Chennai: LIC Housing Finance plans to float a fund of about Rs 350 crore. After gaining experience with the fund, LIC Housing expects to set up a ''REIT'' (Real Estate Investment Trust, which is a mutual fund for investing in real estate projects.) LIC Housing sanctioned Rs 7,385 crore in the current year up to February 29 and disbursed Rs 5,941 crore. Sanctions and disbursements grew 51 per cent and 41 per cent respectively over the corresponding periods last year.
LIC Housing does not take any refinance from NHB, which according to Mr Mitter, is not cheap. Nor is the company (as any other housing finance company) allowed to borrow from overseas markets. Close to 85 per cent of the company''s loan portfolio is made up of small loans, of less than Rs 20 lakh - which, incidentally attracts a lower risk weight of 50 per cent. LIC Housing''s exposure to large projects is about 5 per cent of its portfolio, but it wants to double it next year.
LIC Housing does not take any refinance from NHB, which according to Mr Mitter, is not cheap. Nor is the company (as any other housing finance company) allowed to borrow from overseas markets. Close to 85 per cent of the company''s loan portfolio is made up of small loans, of less than Rs 20 lakh - which, incidentally attracts a lower risk weight of 50 per cent. LIC Housing''s exposure to large projects is about 5 per cent of its portfolio, but it wants to double it next year.
Saturday, March 8, 2008
Thomas Cook - Acquisition Of Controlling Stake In Thomas Cook India Ltd
Thomas Cook India Ltd has informed that the Company has received a letter from Thomas Cook UK Ltd, alongwith Press Release, in connection with Acquisition of controlling stake in Thomas Cook India Ltd.
Press Release issued by Thomas Cook UK Ltd as follows:
Thomas Cook Group plc (Thomas Cook) on March 07, 2008 announces that it is acquiring up to 74.9% of the issued share capital in Thomas Cook India Ltd (TCIL) and 100% of Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in a total of 15 Middle East countries. Thomas Cook is purchasing the businesses from Dubai Financial Group LLC (DFG) for total cash consideration of between €208m and €249m, subject to the outcome of the open offer process set out below.
Highlights:
This acquisition fully supports the Thomas Cook strategy to expand into emerging markets that represent a great growth potential as well as to strengthen its Financial Services business.
Through acquiring a controlling stake in TCIL, the largest foreign exchange and second largest travel Company in India, Thomas Cook will become a leader in one of the fastest growing travel markets.
Thomas Cook is confident that under its ownership the TCIL business will grow significantly in a market that is already growing at 15% per annum. In acquiring the Thomas Cook branded business in Egypt and the rights to the Thomas Cook brand across 15 Middle East countries, Thomas Cook is substantially strengthening the Companys reach in this region. Thomas Cook now has control of the brand worldwide.
This transaction meets the Companys acquisition criteria in terms of it being earnings accretive and exceeding the cost of capital.
Manny Fontenta-Novoa, Group Chief Executive Thomas Cook Group plc said: I am delighted we have secured such a significant acquisition in this fast growing market. Thomas Cook has a long and enviable history in India dating back to the 1880s and the brand name has become one of the countrys best known.
Press Release issued by Thomas Cook UK Ltd as follows:
Thomas Cook Group plc (Thomas Cook) on March 07, 2008 announces that it is acquiring up to 74.9% of the issued share capital in Thomas Cook India Ltd (TCIL) and 100% of Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in a total of 15 Middle East countries. Thomas Cook is purchasing the businesses from Dubai Financial Group LLC (DFG) for total cash consideration of between €208m and €249m, subject to the outcome of the open offer process set out below.
Highlights:
This acquisition fully supports the Thomas Cook strategy to expand into emerging markets that represent a great growth potential as well as to strengthen its Financial Services business.
Through acquiring a controlling stake in TCIL, the largest foreign exchange and second largest travel Company in India, Thomas Cook will become a leader in one of the fastest growing travel markets.
Thomas Cook is confident that under its ownership the TCIL business will grow significantly in a market that is already growing at 15% per annum. In acquiring the Thomas Cook branded business in Egypt and the rights to the Thomas Cook brand across 15 Middle East countries, Thomas Cook is substantially strengthening the Companys reach in this region. Thomas Cook now has control of the brand worldwide.
This transaction meets the Companys acquisition criteria in terms of it being earnings accretive and exceeding the cost of capital.
Manny Fontenta-Novoa, Group Chief Executive Thomas Cook Group plc said: I am delighted we have secured such a significant acquisition in this fast growing market. Thomas Cook has a long and enviable history in India dating back to the 1880s and the brand name has become one of the countrys best known.
Emco Secures Rs 325 Crores Order From MSETCL
Emco Ltd has announced that the Company have received a prestigious order from MSETCL (Maharashtra State Electricity Transmission Company Ltd) for execution of 3 Nos. 400 kV New Substations on turnkey basis at Bhusawal, Chakan and Khaparkheda to evacuate Power as MAHAGENCO is building up additional generating capacity of 1250 MW at these locations for the State of Maharashtra.
EMCOs scope involves design, engineering, supply, erection, testing & commissioning of these 400 kV substations. Total value of this order is about Rs 325 crores.
Commenting on this new order bagged by EMCO, Mr. Rajesh Jain, Chairman, EMCO Ltd Said, These Projects are very important for the State of Maharashtra as the evacuation of the entire additional generation capacity being added by MAHAGENCO at these locations are to be done through them. We are happy and feel privileged that MSETCL has selected us for executing these prestigious Projects.
EMCOs scope involves design, engineering, supply, erection, testing & commissioning of these 400 kV substations. Total value of this order is about Rs 325 crores.
Commenting on this new order bagged by EMCO, Mr. Rajesh Jain, Chairman, EMCO Ltd Said, These Projects are very important for the State of Maharashtra as the evacuation of the entire additional generation capacity being added by MAHAGENCO at these locations are to be done through them. We are happy and feel privileged that MSETCL has selected us for executing these prestigious Projects.
LIC Housing To Float Real Estate Fund
Chennai: LIC Housing Finance intends to float a fund of about Rs 350 crore. The fund, which will invest in large projects, will be created within the next three months, S.K. Mitter, Director and Chief Executive, LIC Housing Finance, told a press conference here on Friday.
Mitter said, after gaining experience with the fund, LIC Housing expects to set up a REIT’ (Real Estate Investment Trust, which is a mutual fund for investing in real estate projects.)
Mitter was here in connection with an ongoing property fair, ‘Living Spaces 2008’, an event sponsored by LIC Housing Finance and organised by The Hindu’s Property Plus. The event opened here on Friday and will close on March 10. (For those who book for property at the fair, LIC Housing offers a special interest rate of 10 per cent (floating) and special processing fee of Rs 5,000.)
LIC Housing, he said, sanctioned Rs 7,385 crore in the current year up to February 29 and disbursed Rs 5,941 crore. Sanctions and disbursements grew 51 per cent and 41 per cent respectively over the corresponding periods last year. Mitter said that LIC Housing enjoys a 150-basis points spread on its loans.
Loan portfolio
Asked if the company would drop interest rates for loans up to Rs 20 lakh, as desired by the Finance Minister, Mitter said that much as LIC Housing would like to do that, it may not be possible for the company, given the firm cost of funds. If the company could access cheaper funds, perhaps subsidised by the National Housing Bank (NHB), it would pass on the benefits to borrowers, he said.
LIC Housing does not take any refinance from NHB, which according to Mitter, is not cheap. Nor is the company (as any other housing finance company) allowed to borrow from overseas markets.
Close to 85 per cent of the company’s loan portfolio is made up of small loans, of less than Rs 20 lakh which, incidentally attracts a lower risk weight of 50 per cent. LIC Housing’s exposure to large projects is about 5 per cent of its portfolio, but it wants to double it next year.
Mitter said, after gaining experience with the fund, LIC Housing expects to set up a REIT’ (Real Estate Investment Trust, which is a mutual fund for investing in real estate projects.)
Mitter was here in connection with an ongoing property fair, ‘Living Spaces 2008’, an event sponsored by LIC Housing Finance and organised by The Hindu’s Property Plus. The event opened here on Friday and will close on March 10. (For those who book for property at the fair, LIC Housing offers a special interest rate of 10 per cent (floating) and special processing fee of Rs 5,000.)
LIC Housing, he said, sanctioned Rs 7,385 crore in the current year up to February 29 and disbursed Rs 5,941 crore. Sanctions and disbursements grew 51 per cent and 41 per cent respectively over the corresponding periods last year. Mitter said that LIC Housing enjoys a 150-basis points spread on its loans.
Loan portfolio
Asked if the company would drop interest rates for loans up to Rs 20 lakh, as desired by the Finance Minister, Mitter said that much as LIC Housing would like to do that, it may not be possible for the company, given the firm cost of funds. If the company could access cheaper funds, perhaps subsidised by the National Housing Bank (NHB), it would pass on the benefits to borrowers, he said.
LIC Housing does not take any refinance from NHB, which according to Mitter, is not cheap. Nor is the company (as any other housing finance company) allowed to borrow from overseas markets.
Close to 85 per cent of the company’s loan portfolio is made up of small loans, of less than Rs 20 lakh which, incidentally attracts a lower risk weight of 50 per cent. LIC Housing’s exposure to large projects is about 5 per cent of its portfolio, but it wants to double it next year.
RBI Keeps Rupee Low At The Cost Of Oil Sector
Bangalore: The Central Government indirectly helped to keep rupee realisations relatively high for the export community not just by enabling RBI sterilise dollar inflows through issue of special securities, but also paying higher subsidy to the oil sector.
The RBI’s currency intervention has adversely impacted the oil marketing companies which had to pay a higher price for the refined petroleum products as the crude prices, in rupee terms, had become more expensive than what would have been the case had there been no such intervention. A rupee appreciation would have partially offset the high international oil prices.
Dr Abheek Barua, Chief Economist at the HDFC Bank said, “Actually there is a transfer of subsidies from the oil sector to the export sector.”
The effort to hold the exchange rate, translated into higher issue of oil bonds to compensate for under recoveries in petroleum products sold to consumers. Outstanding oil bonds this year amounted to about Rs 62,000 crore. Interest liability on oil bonds this year is estimated at Rs 3,853 crore and for the next year it is estimated to rise by another 43 per cent.
Hidden subsidy
It may be recalled that the Finance Minister, P Chidambaram spoke of a hidden subsidy to the exporter community in the interest payments on the Market Stabilisation Scheme (MSS) bonds that the Government issued from time to time. This was done to facilitate RBI buy up the increased dollar inflows without causing an increase in the money supply in the economy that such intervention would otherwise have created.
According to the RBI data, outstanding MSS securities amounted to Rs 1.76 lakh crore. MSS securities included 91-day, 182-day, 364-day Treasury Bills and dated securities.
Interest costs
MSS securities are not treated as part of the Government’s borrowings. Interest payments on MSS though are serviced from the revenue receipts. Interest payments on MSS securities amounted to Rs 8,351.34 crore, almost 2.3 times the budgeted estimates for the current year. For the next year, the interest servicing on outstanding MSS securities is estimated at Rs 13,958.14 crore or a 67 per cent increase. In 2006-07, interest on MSS was only Rs 2,658 crore.
Says Dr Barua, “The interest costs are nothing but de facto export subsidies.” The Finance Minister admitted as much in the Budget speech.
During this financial year, the interventions helped contain the rupee’s appreciation to only about 12 per cent against the dollar. Issuance of dated securities under the MSS, according to the revised estimates for 2007-08, was Rs 1.45 lakh crore against the budget estimates of Rs 22,000 crore.
At least two of these securities issued had coupons of 11.30 and 12.25 per cent for amounts of Rs 25,000 crore and Rs 7,000 crore each, respectively. Both these securities mature in 2010.
The RBI’s currency intervention has adversely impacted the oil marketing companies which had to pay a higher price for the refined petroleum products as the crude prices, in rupee terms, had become more expensive than what would have been the case had there been no such intervention. A rupee appreciation would have partially offset the high international oil prices.
Dr Abheek Barua, Chief Economist at the HDFC Bank said, “Actually there is a transfer of subsidies from the oil sector to the export sector.”
The effort to hold the exchange rate, translated into higher issue of oil bonds to compensate for under recoveries in petroleum products sold to consumers. Outstanding oil bonds this year amounted to about Rs 62,000 crore. Interest liability on oil bonds this year is estimated at Rs 3,853 crore and for the next year it is estimated to rise by another 43 per cent.
Hidden subsidy
It may be recalled that the Finance Minister, P Chidambaram spoke of a hidden subsidy to the exporter community in the interest payments on the Market Stabilisation Scheme (MSS) bonds that the Government issued from time to time. This was done to facilitate RBI buy up the increased dollar inflows without causing an increase in the money supply in the economy that such intervention would otherwise have created.
According to the RBI data, outstanding MSS securities amounted to Rs 1.76 lakh crore. MSS securities included 91-day, 182-day, 364-day Treasury Bills and dated securities.
Interest costs
MSS securities are not treated as part of the Government’s borrowings. Interest payments on MSS though are serviced from the revenue receipts. Interest payments on MSS securities amounted to Rs 8,351.34 crore, almost 2.3 times the budgeted estimates for the current year. For the next year, the interest servicing on outstanding MSS securities is estimated at Rs 13,958.14 crore or a 67 per cent increase. In 2006-07, interest on MSS was only Rs 2,658 crore.
Says Dr Barua, “The interest costs are nothing but de facto export subsidies.” The Finance Minister admitted as much in the Budget speech.
During this financial year, the interventions helped contain the rupee’s appreciation to only about 12 per cent against the dollar. Issuance of dated securities under the MSS, according to the revised estimates for 2007-08, was Rs 1.45 lakh crore against the budget estimates of Rs 22,000 crore.
At least two of these securities issued had coupons of 11.30 and 12.25 per cent for amounts of Rs 25,000 crore and Rs 7,000 crore each, respectively. Both these securities mature in 2010.
Friday, March 7, 2008
Maruti Suzuki Hike Capacity At Manesar
Pune: Maruti Suzuki India Ltd will be hiking capacity at its fourth and newest plant at Manesar. By the end of March, the company will be in a position launch 1.7 lakh units per annum from this facility, up 70 per cent from the installed capacity. The enhanced production capacity will also be used to roll out DZire, the sedan version of the Swift, that is due to be launched later this month. At present, the plant is manufacturing at 120 per cent of its installed capacity and rolls out the Swift (both diesel and petrol variants) and the SX4 sedan.
SBI, ICICI Bank, HDFC To Benefit From DDT Change
Mumbai: Banks such as State Bank of India, ICICI Bank and housing finance companies such as HDFC are expected to benefit from the budgetary proposal to removal of the double taxation of dividends paid by a subsidiary company and its parent.
These institutions have large number of subsidiaries and earn a considerable income as dividend from these subsidiaries. At present, dDividend Distribution Tax (DDT) is at 15 per cent. The budgetary proposal now allows the set-off of the tax paid by the subsidiary on dividends declared to parent company. ICICI Bank has 17 domestic and international subsidiaries. SBI has seven associate banks, four foreign subsidiaries and four non-banking subsidiaries. HDFC has 12 associates and subsidiaries. Based on last fiscal''s figures, and calculating DDT at 15 per cent, the amounts these institutions would save would probably work out to be Rs 89.55 crore for SBI, Rs 67.2 crore for ICICI Bank and Rs 17.7 crore for HDFC.
These institutions have large number of subsidiaries and earn a considerable income as dividend from these subsidiaries. At present, dDividend Distribution Tax (DDT) is at 15 per cent. The budgetary proposal now allows the set-off of the tax paid by the subsidiary on dividends declared to parent company. ICICI Bank has 17 domestic and international subsidiaries. SBI has seven associate banks, four foreign subsidiaries and four non-banking subsidiaries. HDFC has 12 associates and subsidiaries. Based on last fiscal''s figures, and calculating DDT at 15 per cent, the amounts these institutions would save would probably work out to be Rs 89.55 crore for SBI, Rs 67.2 crore for ICICI Bank and Rs 17.7 crore for HDFC.
Reliance To Set Up Pharma Unit In Jamnagar
Reliance Life Sciences (RLS) is looking at opening an active pharmaceutical ingredients (API) and formulations manufacturing complex at Jamnagar. The complex will come up in the multi-product special economic zone (SEZ) being established by Reliance Industries (RIL).
The manufacturing complex will cater to the export markets where Reliance has a presence. While company executives refused to divulge further details, industry sources said that Reliance has earmarked a huge area in the SEZ for the project. The new unit in Jamnagar is expected to manufacture products in the field of medical, plant and industrial biotechnology. RLS is developing a range of biopharmaceutical products especially blood pharma proteins, bio-generic recombinant proteins, humanized monoclonal antibodies and siRNA molecules.
There are around 15 products at various stages of development, according to industry sources, some of which may be manufactured at the proposed unit. The complex will also have a unit of contract research organization (CRO), Reliance Clinical Research Services (RCRS), a wholly-owned subsidiary of RLS with global headquarters at Newtown, Pennsylvania and facilities in Chicago, Bangalore and Navi Mumbai.
The manufacturing complex will cater to the export markets where Reliance has a presence. While company executives refused to divulge further details, industry sources said that Reliance has earmarked a huge area in the SEZ for the project. The new unit in Jamnagar is expected to manufacture products in the field of medical, plant and industrial biotechnology. RLS is developing a range of biopharmaceutical products especially blood pharma proteins, bio-generic recombinant proteins, humanized monoclonal antibodies and siRNA molecules.
There are around 15 products at various stages of development, according to industry sources, some of which may be manufactured at the proposed unit. The complex will also have a unit of contract research organization (CRO), Reliance Clinical Research Services (RCRS), a wholly-owned subsidiary of RLS with global headquarters at Newtown, Pennsylvania and facilities in Chicago, Bangalore and Navi Mumbai.
GE Money-LIC JV To Take Off
LIC is going ahead with GE Money JV for its credit card venture. It has also given KPMG the mandate to look for a financial partner for the balance 14% stake that is yet to be sold in the venture. Although, the corporation was supposed to launch the card in March, it is now expected that the venture will roll out only by the second quarter of the next financial year. LIC has 40% in the venture, while GE Money''s stake is 35%. Corporation Bank will hold 4%, LIC Housing Finance will have 5% and LIC MF will have a 2% shareholding. Industry sources said LIC will look for a partner that will be able to pay a premium.
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