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B U S I N E S S

Sugar export ban may be lifted
New Delhi, January 5
The lifting of ban on sugar exports is likely to be discussed in the next Cabinet meeting. "The issue (of lifting the ban) will be taken up in the next Cabinet meeting," Agriculture and Food Minister Sharad Pawar said here on the sidelines of a conference on bio-diesel.

Ministry seeks infrastructure status for oil exploration
New Delhi, January 5
While the country is planning to double the capacity of its proposed strategic crude oil reserves to 10 million tonnes, the Petroleum Ministry has demanded oil and gas exploration business and pipelines (E&P) be granted infrastructure status to encourage exploration in unexplored basins, entailing a 10-year tax holiday to companies.

Essar consent only for selling equity to Indian Co: Hutch
Hong Kong/New Delhi, January 5
Hutchison Telecom said today the Indian partner’s consent for the sale of equity in mobile joint venture Hutch-Essar was needed only if it was to certain telecom players in India and not for any deal with others.

Shareholder urges Vodafone to drop plans

Videocon-Daewoo deal falters, fresh bids  in the offing
New Delhi, January 5
Videocon-led consortium's much-hyped $730 million deal to acquire Daewoo Electronics has fallen through, with creditors to the ailing Korean firm rejecting a fresh offer that reduced the transaction size by 10 per cent.

OVL eyes stake in 2 Caspian blocks 
New Delhi, January 5
ONGC Videsh Ltd (OVL) will buy up to a 33 per cent stake in two Caspian sea blocks offshore of Turkmenistan for Rs 150-200 crore.

Liquid fuel and gas from coal feasible: Panel
New Delhi, January 5
Prime Minister Manmohan Singh today directed an inter-ministerial group in the Planning Commission to study the feasibility of converting coal into liquid fuel and gas, on a specific suggestion from the Investment Commission.



The Chevrolet Camaro convertible concept car that will be unveiled at the North American International Auto Show in Detroit, Michigan. Chevrolet has announced that Camaro will go into production in 2009.
The Chevrolet Camaro convertible concept car that will be unveiled at the North American International Auto Show in Detroit, Michigan. Chevrolet has announced that Camaro will go into production in 2009. — Reuters

EARLIER STORIES
 
The two sides of a new two-rupee coin that will be shortly circulated by the Reserve Bank of India
The two sides of a new two-rupee coin that will be shortly circulated by the Reserve Bank of India. — PTI

India, Mauritius discuss trade
New Delhi, January 5
Trade Ministers of India and Mauritius today discussed the Comprehensive Economic Cooperation Partnership Agreement (CECPA) and means to end the deadlock at the WTO, while skirting the contentious Taxation Agreement.

Three car Cos raise prices
New Delhi, January 5
Auto majors Honda Siel Cars India (HSCI) and Tata Motors have hiked the price of its sedans. While Honda has hiked the price of its sedans by up to Rs 12,801, Tata Motors has increased by up to Rs 15,000, the prices of its popular sports utility vehicle Safari and multi-utility vehicle Sumo.

Chairman of Vivada Inland Waterways Ltd M.V. Nath, Chief Conservator of Forests of West Bengal Arin Ghosh and Director of VIWL S.K. Chakraborty display a passenger boat model in Kolkata on Friday. This boat will carry tourists from Kolkata to Sunderbans
Chairman of Vivada Inland Waterways Ltd M.V. Nath, Chief Conservator of Forests of West Bengal Arin Ghosh and Director of VIWL S.K. Chakraborty display a passenger boat model in Kolkata on Friday. This boat will carry tourists from Kolkata to Sunderbans. — PTI photo

Biocon JV
Mumbai, January 5
Integrated biotechnology firm Biocon said today it had entered into a joint venture with Neopharma, an Abu Dhabi-based pharmaceutical company, to manufacture and market a range of bio-pharmaceuticals for the Gulf Cooperation Council (GCC) countries.

Inflation on expected lines: RBI
Mumbai, January 5
RBI Governor Y.V. Reddy said today the apex bank was comfortable with the levels of inflation and it could be in the region of 5 and 5.5 per cent through the current financial year.

RBI refuses FII status to FDI in real estate
New Delhi, January 5
With a view to checking asset bubble in the booming realty stocks, the RBI has refused to grant FII status to foreign direct investment received through private placement of equity by real estate companies.

Boeing regains top spot
New York, January 5
US aviation giant Boeing Co has secured 1,044 net orders for new aircraft in 2006, regaining the top spot from European arch-rival Airbus.

Gold loses Rs 45
Mumbai, January 5
A mixed trend was seen in the precious metals today with silver going up by Rs 30 per kg and gold losing its shine by Rs 45 per 10 gm on the Bombay bullion exchange.

DVC, CIL plan JV for coal mining
Kolkata, January 5
The Damodar Valley Corporation (DVC) and Coal India Ltd (CIL) have decided to form a joint venture for coal mining activities and procuring domestic and overseas coal blocks.

Tata Tea picks up 6.8 pc in Tata Coffee
Mumbai, January 5
Tata Tea has picked up an additional 6.81 per cent stake in group company Tata Coffee through an open market transaction.

Video
Ratan Tata meets Prime Minister.
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Sugar export ban may be lifted
Tribune News Service

New Delhi, January 5
The lifting of ban on sugar exports is likely to be discussed in the next Cabinet meeting. "The issue (of lifting the ban) will be taken up in the next Cabinet meeting," Agriculture and Food Minister Sharad Pawar said here on the sidelines of a conference on bio-diesel.

With the production of sugar expected to be around 240 lakh tonnes and the total availability, including carry-over stock, estimated to be 270 lakh tonnes, Agriculture Minister Sharad Pawar said today the government was looking at ways to utilise or dispose of the surplus quantity. The country's annual sugar consumption is about 185 lakh tonnes.

The government would look at ways to utilise or dispose of the surplus stocks to keep its prices from falling.

The government was considering two or three alternatives to dispose of the sugar stock so that farmers were not discouraged, as the prices of the sweetener would fall in a situation when production overtook demand, he said.

Mr Pawar, however, agreed that it would not be easy to export the commodity given the competitive international market, where the sugar prices were very low.

But Mr Pawar also ruled out any export subsidy for sugar exporters to help them take on competition.

The Director-General of Foreign Trade yesterday notified the partial lifting of ban on sugar exports by allowing only advance licence holders to export the commodity.

On India's ethanol production, Mr Pawar said it was time India followed the Brazilian model where ethanol productionwas stepped up whenever petroleum prices were high. Conversely, when the petroleum prices are seen to dwindle, the country produced more sugar, he said.

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Ministry seeks infrastructure status for 
oil exploration
Tribune News Service

New Delhi, January 5
While the country is planning to double the capacity of its proposed strategic crude oil reserves to 10 million tonnes, the Petroleum Ministry has demanded oil and gas exploration business and pipelines (E&P) be granted infrastructure status to encourage exploration in unexplored basins, entailing a 10-year tax holiday to companies.

"We will be in a position to complete 5 million tonnes storage in 36 months from April 1, 2007, contrary to the earlier planned 48 months," Petroleum Secretary M. S. Srinivasan said at the CII Distinguished Lecture Series here.

He said the private sector would be roped to help bring in the additional 5 million tonnes.

The government last year approved the setting up of a reserve worth 5 million tonnes, sufficient to meet 15 days’ demand. The reserves will be used as a hedge against volatility in international crude oil markets and meet domestic demand in case of short-term supply disruptions.

He said, “Only 31 per cent of India's sedimentary basins have been explored till date. We have set an ambitious target of reaching 60 per cent by the end of 11th Plan period (2012)."

Mr Srinivasan said India would not follow the Russian model of 'resource nationalisation' as confining oil and gas reserves to public sector can breed inefficiencies through sub-optimal utilisation of resources.

In most of the Gulf nations, state-run firms own and operate oil and gas fields. Russia, which had allowed global energy giants to look for oil and gas, too, has lately been 'seizing' control of its vast fuel reserves.

National oil companies globally breed inefficiencies (rather) we want more (private and foreign) investment and to open up the sector, he said.

He came down heavily on Indian public sector oil firms for not doing enough for the energy security of the country. 

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Essar consent only for selling equity to 
Indian Co: Hutch

Hong Kong/New Delhi, January 5
Hutchison Telecom said today the Indian partner’s consent for the sale of equity in mobile joint venture Hutch-Essar was needed only if it was to certain telecom players in India and not for any deal with others.

In the midst of reports of differences between the two partners on the issue of right of first refusal (RoFR), the comment by HTIL assumes significance and may impact aspiring Indian companies, including Anil Ambani Group firm Reliance Communications.

A spokesperson for HTIL, which holds majority 67 per cent stake in Hutch-Essar, said: “RoFR exists in the limited case of a sale to certain Indian telecom companies. There is no RoFR over any other buyer”. As per the shareholding agreement, the partners get a chance to buyout the other by matching the highest bid under the clause of RoFR.

However, the scope of RoFR is itself under dispute and Essar’s top officials had visited HTIL headquarters in Hong Kong earlier this week to resolve the issue.
The statement by HTIL coincides with the India visit of officials of UK telecom giant Vodafone, the first entity to make public its intention to acquire HEL.

Asked about the HTIL statement, an Essar spokesperson said: “We do not wish to comment on the shareholders’ agreement”. HTIL did not elaborate on RoFR and declined to comment on the discussions with the Essar Vice-Chairman Ravi Ruia on Wednesday, but the position taken by it may lead to a legal tangle and possibly delay the process of sale of the Hong Kong-based company's stake in HEL, sources said. — PTI

Shareholder urges Vodafone to drop plans

London, January 5
A shareholder of Vodafone Group has urged the company to abandon its plans to acquire India’s Hutch Essar, saying the British telecom giant could overpay for the deal, The Times reported today.

The report said State Street, which holds about 1.7 per cent stake in Vodafone, had said the firm risked repeating past mistakes of overpaying in an overheated situation.

The report said Vodafone had yet to explain to its shareholders how a bid for Hutchison Essar would fit those criteria. — PTI

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Videocon-Daewoo deal falters, fresh bids 
in the offing

New Delhi, January 5
Videocon-led consortium's much-hyped $730 million deal to acquire Daewoo Electronics has fallen through, with creditors to the ailing Korean firm rejecting a fresh offer that reduced the transaction size by 10 per cent.

Woori Bank, the largest creditor to Daewoo, said the bank along with other creditors had decided to abandon the plan to sell the company to the Videocon-led consortium due to differences over pricing, according to the Xinhua Finance news agency.

"We creditors have found that the revised offer by Videocon is still unacceptable and thus we are in the process of notifying the Indian company that the memorandum of understanding signed earlier is dropped and it has lost the status as a preferred bidder," the Woori Bank spokesperson said in Seoul.

The official said the process of selling Daewoo would start afresh although the creditors have left open the possibility of more talks with Videocon. Officials of Videocon declined to comment but sources said the company was expected to take part in the fresh bids.

The consortium comprising India's Videocon and US equity firm Ripplewood had initially asked for a 13 per cent cut in the deal value after conducting due diligence, and later revised it to 10 per cent after strong opposition from the 40-odd creditors to Daewoo Electronics. — PTI

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OVL eyes stake in 2 Caspian blocks 

New Delhi, January 5
ONGC Videsh Ltd (OVL) will buy up to a 33 per cent stake in two Caspian sea blocks offshore of Turkmenistan for Rs 150-200 crore.

"We have concluded a deal with Denmark's Maersk Oil and German oil and gas firm Wintershall for taking up to a 33 per cent stake in Block 11 and 12 in offshore Turkmenistan," OVL Managing Director R.S. Butola said here late last evening.

Maersk Oil, with an 80 per cent holding, is the operator of the blocks, which cover about 5,663 sq km while Wintershall, a unit of the BASF chemicals group, owns the remaining 20 per cent stake.

Mr Butola said OVL was likely to sign a deal with Maersk Oil and Wintershall within a month.

"We are waiting for the Turkmenistan Government's approval. Once that is obtained we will sign a production-sharing contract," he said. — PTI

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Liquid fuel and gas from coal feasible: Panel

New Delhi, January 5
Prime Minister Manmohan Singh today directed an inter-ministerial group in the Planning Commission to study the feasibility of converting coal into liquid fuel and gas, on a specific suggestion from the Investment Commission.

The commission, chaired by Mr Ratan Tata, in a presentation to the Prime Minister said that coal to liquids (CTL) was feasible in India and should become an integral part of India's strategy for oil security.

Mr Manmohan Singh suggested the preparation of a time-bound action plan in this regard to ensure the nation's oil security.

The Investment Commission pointed out that about five CTL projects could double the country's proven oil reserves and the liquid fuel produced would not only be petrol but also naphtha and LNG, according to an official statement here.

Arguing that the country would need to import over 90 per cent of its oil needs in the future and that new discoveries were unlikely to reduce oil imports, the commission suggested that CTL projects were imperative to ensure oil security.

It pointed out that low-grade coal in India was not a constraint in CTL projects and the output would be ultra clean. The project needed captive coal mines with reserves of 1.3 billion tonnes with open cast mining of pit-head coal. — PTI 

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India, Mauritius discuss trade

New Delhi, January 5
Trade Ministers of India and Mauritius today discussed the Comprehensive Economic Cooperation Partnership Agreement (CECPA) and means to end the deadlock at the WTO, while skirting the contentious Taxation Agreement.

“We discussed the CECPA and bilateral cooperation in trade and commerce. The issues concerning Double Taxation Avoidance Agreement (DTAA), however, did not figure in the talks,” Mauritian Minister of Foreign Affairs and International Trade Madan Murlidhar Dulloo said after a meeting with Commerce Minister Kamal Nath.

Both countries have formed an empowered team for negotiating the CECPA, following the recommendations of the joint study group. Many rounds of talks have already been held so far by the empowered team.

Mr Dulloo said as the issues on the DTAA were being taken care of by a technical group, it did not figure in the talks.

The discussion also focused on breaking the impasse in the Doha round of negotiations at the WTO.

“Apart from trade, we also discussed how to unlock the WTO impasse,” he added.
Trade ministers of key players at the WTO are likely to hold informal consultations at Davos by the end of this month to find a way forward for the Doha round, Mr Dulloo added.

Before the Davos meet, trade ministers of the African Union would hold discussions on multilateral trade talks. The key trading bloc African, Caribbean and Pacific (ACP), of which Mauritius is a member, would also meet to discuss the WTO.

Meetings of major developing countries in the run-up to talks at Davos are significant as their stand would determine, to a large extent, if the talks could be revived. — PTI

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Three car Cos raise prices

New Delhi, January 5
Auto majors Honda Siel Cars India (HSCI) and Tata Motors have hiked the price of its sedans.

While Honda has hiked the price of its sedans by up to Rs 12,801, Tata Motors has increased by up to Rs 15,000, the prices of its popular sports utility vehicle Safari and multi-utility vehicle Sumo.

HSCI said the price increased on its sedan models City and Civic, to be effective from tomorrow, would be in the range of 1 to 1.2 per cent. While the City variants would see an increase in price between Rs 5,241 and Rs 8,481, variants of the other model Civic would be costlier by Rs 12,801.

Tata Motors, meanwhile, said the Safari would be dearer by Rs 10,000-15,000, while the average hike in price of Sumo across variants was Rs 5,000. — PTI

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Biocon JV

Mumbai, January 5
Integrated biotechnology firm Biocon said today it had entered into a joint venture with Neopharma, an Abu Dhabi-based pharmaceutical company, to manufacture and market a range of bio-pharmaceuticals for the Gulf Cooperation Council (GCC) countries.

"The GCC region is an important market for Biocon and the joint venture with Neopharma is an important milestone for Biocon’s global foray. Neopharma has established a world-class manufacturing facility for finished formulations,” Biocon Chairman and Managing Director Kiran Mazumdar-Shaw said. — PTI

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Inflation on expected lines: RBI
Tribune News Service

Mumbai, January 5
RBI Governor Y.V. Reddy said today the apex bank was comfortable with the levels of inflation and it could be in the region of 5 and 5.5 per cent through the current financial year.

“Inflation is by and large on expected lines and (economic) growth has been stronger. As of now we stick to the inflation range of 5.0-5.5 percent for end-March,” Mr Reddy said.

He added that the volatility in call money markets last week was due to a “rebalancing of portfolios” by some banks due to the increase in the cash reserve ratio (CRR).

“For a large number of large players it was a fairly non-disruptive adjustment in rebalancing, and so as you would have noticed the liquidity conditions are not the volatile element that was seen some time ago,” he said.

Goes up to 5.48 pc

New Delhi, January 5
Inflation surged to 5.48 per cent during the week ended December 23, just short of the upper threshold of the RBI’s projections for this fiscal, due to a rise in the prices of some essential manufactured products, food items and minerals. Inflation stood at 5.43 per cent in the previous week and 4.62 per cent in the corresponding period of the previous year.

Inflation at 5.48 per cent is this fiscal's highest, according to provisional estimates. However, as per the revised estimates inflation had already touched 5.61 per cent during the week ended October 21. — PTI

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RBI refuses FII status to FDI in real estate

New Delhi, January 5
With a view to checking asset bubble in the booming realty stocks, the RBI has refused to grant FII status to foreign direct investment received through private placement of equity by real estate companies.

According to sources, the RBI has taken a view that no relaxation can be given for FDI brought in through private placement by companies, whose projects are not in compliance with the guidelines of Department of Industrial Policy and Promotion (DIPP).

Leading real estate players, which want to encash on the investors’ increasing appetite for realty sector stocks, have been seeking FII status for their pre-offer placement as many of their existing projects are not meeting tough FDI norms.

With RBI taking a tough stand, the DIPP has sought views of the Finance Ministry on the market sensitive subject. Contrary to reports, the government has no intention to relax FDI norms for the sector, senior officials said.

No realty firm can have FDI unless all its projects meet the guidelines. This is coming in the way of big players leveraging their existing projects for foreign investment, industry sources said.

The RBI has taken a view that private placement cannot be treated at par with the portfolio investment since the former involves discretion of the promoters of a company, the sources said.

The RBI has argued that the Foreign Exchange Management Act (FEMA) needs to be amended if FDI in real estate has to be given the status of portfolio investment.

Of late, the central bank has been tightening lending guidelines for the banks for the overheated real estate sector. — PTI

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Boeing regains top spot

New York, January 5
US aviation giant Boeing Co has secured 1,044 net orders for new aircraft in 2006, regaining the top spot from European arch-rival Airbus.

The figure was up from 1,002 in 2005, and was dominated by an order for 82 Boeing 737s from low-cost US carrier Southwest Airlines.

Boeing also sold 157 of its new 787 “Dreamliner” long-haul jets last year, including 45 to Australia’s Qantas. Dreamliner, the fastest-selling new plane in history, is scheduled to enter into service in 2008.

Airbus, having been the best-selling aircraft maker since 2001, lagged Boeing throughout last year. According to its forecasts, the European company won around 800 net orders in 2006. — AFP

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Gold loses Rs 45

Mumbai, January 5
A mixed trend was seen in the precious metals today with silver going up by Rs 30 per kg and gold losing its shine by Rs 45 per 10 gm on the Bombay bullion exchange.

Silver fineness opened steady at Rs 19,180 per kg on moderate demand. Later, it improved on better buying support and closed at Rs 19,210 per kg, with a gain of Rs 30 per kg.

In London, the white metal was quoted high at 12.70/12.72 per troy ounce.

However, standard gold (99.5) and pure gold (99.9) opened weak at Rs 9,000 and Rs 9,045, respectively, on poor demand. The yellow metal went up slightly and closed at Rs 9,005 and Rs 9,055, respectively, with a loss of Rs 45 each from its previous closing.

Following are the spot silver and gold closing prices: Silver (per kg) .999 grade: Rs 19,210 (19,180) Gold (per 10 gm): Standard mint 99.5 purity: Rs 9,005 (9,050) Pure Gold 99.9 purity: Rs 9,055 (9,100). — UNI 

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DVC, CIL plan JV for coal mining

Kolkata, January 5
The Damodar Valley Corporation (DVC) and Coal India Ltd (CIL) have decided to form a joint venture for coal mining activities and procuring domestic and overseas coal blocks.

“Talks have concluded at the highest ministerial level for the JV. Now, the proposal will be placed before Board of the DVC and CIL,” DVC Chairman Asim Kumar Burman said.

“Besides keeping the option for coal blocks in India and overseas, the company may also take up activities for CIL’s unutilised underground coal blocks,” Mr Burman said, adding that financial and other finer details would be finalised after the Boards cleared the proposal. The DVC was keen on a majority stake in the venture.

The JV would facilitate assured coal supply to meet its expansion plans. The DVC is adding 1,000 MW by March this year and 7,000 MW during the 11th five-year Plan period.

The power utility’s coal requirement will rise from 11 million tonnes to 50 million tonnes by 2010 to fuel new capacity.

Currently, the DVC mines 4.8 lakh tonne of coal from its captive mine at Bermo in West Bengal. — PTI

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Tata Tea picks up 6.8 pc in Tata Coffee

Mumbai, January 5
Tata Tea has picked up an additional 6.81 per cent stake in group company Tata Coffee through an open market transaction. Tata Coffee said Tata Tea had acquired around 44.2 lakh shares of the company through a deal made yesterday. Based on the January 4 closing price of Rs 304.15, Tata Tea could have bought the shares for Rs 134 crore.

With the latest tranche, Tata Tea has hiked its shareholding to 57.48 per cent, representing nearly 1.07 crore shares of Tata Coffee. — PTI

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