Wednesday, December 5, 2001, Chandigarh, India






National Capital Region--Delhi

THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

An Enron employee sits with her belongings outside the Houston energy company's building on Monday after the shattered company laid off about 4,000 employees as part of a cost-cutting move in the wake of its bankruptcy filing.Enron sacks 4,000 employees
Houston, December 4
Enron corp has arranged up to $ 1.5 billion in financing to keep operating as it reorganises under bankruptcy protection, the company told a bankruptcy court judge.

An Enron employee sits with her belongings outside the Houston energy company's building on Monday after the shattered company laid off about 4,000 employees as part of a cost-cutting move in the wake of its bankruptcy filing. — Reuters photo

  • Firm offers to buy Enron

No move to regulate interest rate: Sinha
New Delhi, December 4
The Union Government today ruled out reverting back to the regulated interest rate regime to provide concessions to certain segments of the industry.

34 FDI proposals cleared
New Delhi, December 4
The $ 500 million ADR/GDR proposal of Sterling Infotech is among the 34 foreign direct investment proposals cleared by the Commerce and Industry Ministry today.

Bharti to offer ESOP at 50 pc discount
New Delhi, December 4
About 4,000 employees of Bharti Televentures will be offered employees stock option (ESOP) at 50 per cent discount from the share price after its initial public offer.

  • To buy stake in Telia



EARLIER STORIES
 

Revenue mop-up may fall short of target
New Delhi, December 4
Revenue Secretary S. Narayan said today that revenue collections could fall short of the budgeted target this year even as the government has set a target of doubling the number of direct tax assessees within a four-year period.
In Video: Richard Hass, Director, Policy Planning, US Department of State, addressed the India Economic Summit in New Delhi on Tuesday. (28k, 56k)

  • Power reforms

Webdunia.com launches quiz contest
New Delhi, December 4
India’s first multilingual online quiz competition hosted by Mr Derek O’Brien was launched today by Webdunia.com.

ANALYST’S DIARY

Dr Reddy’s loses, Andrx gains
I
n a big disappointment for Dr Reddy’s the US FDA has intimated to the company that it has lost its 180 days generic marketing exclusivity for Omeprazole. It may be called that Dr Reddy’s claimed to be first to file Para IV certification for Omeprazole 40-mg capsules and hence there were huge expectations from generic marketing exclusivity on the same.

ROUND-UP

Wipro inks pact with Santera Systems
Bangalore, December 4
Wipro Technologies has signed a contract with Texas-based Santera Systems, a leading provider of switching equipment for the global communications market, for setting up a global development centre to develop next-generation telecom equipment for Santera.

  • Infosys looks for acquisition
  • Ford cuts jobs in cost-saving move
  • Kodak, Sanyo reach pact
  • Tornado for Car InfotainmentTop








 

Enron sacks 4,000 employees

Houston, December 4
Enron corp has arranged up to $ 1.5 billion in financing to keep operating as it reorganises under bankruptcy protection, the company told a bankruptcy court judge.

The announcement came yesterday, hours after the troubled energy marketing company laid off 4,000 workers — or 20 per cent of its work force. Enron sent the rest of its staff at its Houston headquarters home for the rest of the day.

Under terms of the agreement with lenders J.P. Morgan Chase and Citigroup, Enron will receive $ 250 million immediately. Another $ 250 million will be available when the company provides the lenders with a “satisfactory business plan,” Enron said in a statement.

The remaining $ 1 billion will be used in part to pay debt on Enron’s Transwestern Pipeline. To get that funding, Enron must add the pipeline to a list of subsidiaries named in the company’s bankruptcy filing, Enron lawyer Martin Bienenstock said in court.

The company currently has $ 500 million in cash, but normally operates with about $ 2.5 billion on hand, Bienenstock said.

The loans are syndicated — meaning they will be shared among a large group of banks — and secured by Enron’s assets.

“With this financing in place, Enron can continue to do business and move forward to implement the first steps of its reorganisation,” Enron Chairman and Chief Executive Kenneth L. Lay said.

Firm offers to buy Enron

Standard Power and Light, a privately held energy developer based in Illinois, is offering to acquire at least a majority stake of Enron, according to documents released today.

In a filing with the US Securities and Exchange Commission, Standard Power and Light President and Chief Executive Richard Ryan said: “we intend on acquiring at least the majority of the shares of Enron, selling off all division of the business except for the energy related companies and putting this company back on its feet.”

Ryan said once the company has been stripped to its core energy business, “the balance of the debt, both on balance sheet and off balance sheet, can be adequately managed and ultimately retired through a long term reorganisation.”

The company did not say how it will raise the cash to purchase Enron, but said the operations of the energy business alone are sufficient to repay debt obligation to creditors. AP, AFP
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No move to regulate interest rate: Sinha
Tribune News Service

New Delhi, December 4
The Union Government today ruled out reverting back to the regulated interest rate regime to provide concessions to certain segments of the industry.

Replying to questions during the question hour in the Rajya Sabha, Finance Minister Yashwant Sinha said: “Interest rate has been de-regulated. There is no intention to bring regulation back as far as interest rate is concerned.”

“It is left to the lending agencies to judge the worth of its clients and judge the interest rate accordingly,” he said.

The Finance Minister, however, said sick industries and potentially viable but sick industries were provided loans at below the prime lending rate (PLR) levels.

Mr Sinha said the government had taken several remedial measures to ward off the effects of global slowdown which had also helped in insulating the economy. He said good agriculture this year had improved the prospects of growth.

In reply to another question, Mr Sinha said India was insulated from the effects of global economic slowdown because of the measures taken in advance and better performance of agriculture this year would provide the necessary fillip to the economy.

“We have taken remedial measures as the government was aware of the slowdown. We softened interest rates and reduced taxes across the board,” he said.

Attributing the slowdown in the country's economy to external environment like the East Asian crisis, collapse of technology stocks in the USA and sharp rise in international oil prices, he said slowdown in the agriculture during the past two years also contributed to the decline in the GDP considerably.

Govt to revive sick SFCs: In an effort to strengthen the small-scale sector, the government would provide recapitalisation to revive the sick state finance corporations (SFCs), the Finance Minister indicated.

Replying to supplementaries during the question hour, Mr Sinha said: “Suggestions have been made for recapitalisation to revive the SFCs. We are discussing this with the state governments. We hope to be able to resolve this problem very soon.”

The Finance Minister denied that the NDA government had only taken cosmetic measures for development of the small-scale sector.
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34 FDI proposals cleared

New Delhi, December 4
The $ 500 million ADR/GDR proposal of Sterling Infotech is among the 34 foreign direct investment proposals cleared by the Commerce and Industry Ministry today.

Sterling’s proposal for floating 45.60 per cent of its equity in the overseas markets to raise up to Rs 2350 crore ($ 500 million) for setting up a eight-fibre pair fully protected undersea cable system has now been forwarded to the to the Cabinet Committee on Economic

Affairs (CCEA) for consideration and approval, an official release said.

A Rs 350 crore proposal of the Indian arm of Japanese company Yamaha Motors for issue of 14 per cent of the redeemable preference shares was among the other 33 FDI proposals cleared.

The proposals were approved by the Murasoli Maran on the basis of recommendations made by the FIPB, it said.

The Ministry cleared a proposal of Mphasis Europe and Middle East to increase foreign equity holding to 100 per cent from 95 per cent.

The other proposals approved included the Caparo group of London and Skoda Auto’s proposal with no fresh inflow of funds involved.

Caterpillar Power Ventures International Mauritius got the nod for increasing foreign equity up to 56.9 per cent from 35.41 per cent.

California-based LPG and VNG kits manufacturer Impco Technologies has been allowed to increase its stake to 40 per cent in manufacturing activities and 60 per cent for trading activities in two different entities. PTI
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Bharti to offer ESOP at 50 pc discount

New Delhi, December 4
About 4,000 employees of Bharti Televentures will be offered employees stock option (ESOP) at 50 per cent discount from the share price after its initial public offer.

“We have decided to give our about 4000 employees, who have brought Bharti where it is today, the shares at 50 per cent discount while the employees joining the company now will be offered such shares later,” Sunil Bharti Mittal said here today.

A number of shares to be offered to each employees would be worked out later depending upon the years of services they have put in.

Asked what kind of premium the company was expecting, Mittal said the market was extremely good as there was no telecom IPO in the pipeline. He, however, refused to give any indication on the price front.

Bharti has various projects worth Rs 5,200 crore in progress, Mittal said, adding that at the peak the company would require this much fund.

With a comfortable debt-equity ratio of just 0.36:1, Mittal said raising the fund would not be a problem for the company. The company has also secured some debt, he added.

Bharti is diluting 10 per cent of the equity in the primary market constituting 18.5 crore shares.

The investment of Rs 5,200 crore to be pumped into various projects in progress would be spread over a period of more than two years.

Bharti would start delivering services in all circles by the end of current financial year except in the case of Mumbai.

On the issue of removing FDI in the telecom sector, Mittal said looking at the amount of funds required by India, the government must remove the 49 per cent cap on FDI limit.

To buy stake in Telia

Bharti Televentures is gearing up to acquire 26 per cent stake held by Telia, Sweden’s telecom giant, in Bharti Mobile.

Sunil Mittal said the group would also acquire a 5 per cent stake held by India’s DSS Enterprises in another group firm, Bharti Mobinet, which offers mobile services in Chennai, before the end of March next.

The two deals under discussion if completed would give Bharti Televentures total ownership of its various operating companies. PTI
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Revenue mop-up may fall short of target
Tribune News Service

New Delhi, December 4
Revenue Secretary S. Narayan said today that revenue collections could fall short of the budgeted target this year even as the government has set a target of doubling the number of direct tax assessees within a four-year period.

“So far as direct tax collections concerned we are almost equal to last year’s levels. However, Customs collections are down by 14 per cent during April to November period as compared to the corresponding period last year”, Mr Narayan told newspersons in the sidelines of special session during the ongoing India Economic Summit organised by the World Economic Forum and CII) here.

Although excise collections are better than last year’s rate of 1.93 per cent, “ even doubling of that figure may not be sufficient”.

On the whole, he said net tax collections was less by Rs 400 crore during the period as compared to the last year, the Revenue Secretary said.

The government, however, was hopeful that direct tax collections will pick up - especially corporate tax collections.

“Corporate tax collections have increased from a negative 52 per cent in July to negative 26 per cent in August”, he said.

Regarding customs he said “ we cannot do anything about it, especially in the context of the of international price situation in crude oil”. On increasing the number of direct tax assessees, he said the government was looking at increasing the number of assessees to anywhere between 5.5 to 6 crore by 2005.

“On a proportionate basis we are looking at an average annual addition of one crore assessees by 2005”, Mr Narayan said.

Power reforms

Power Minister Suresh Prabhu said a holistic approach will be adopted for reviving the power sector.

The new approach will focus on transmission and distribution in addition to generation to make the power sector commercially viable, the Minister said while speaking at a special plenary session of the India Economic Summit.

Mr Prabhu said the new generation plants would not need a licence to produce power and the private producers can sell the power directly to bulk consumers, which will take care of any bank ability issues.
Top


 

Webdunia.com launches quiz contest

New Delhi, December 4
India’s first multilingual online quiz competition hosted by Mr Derek O’Brien was launched today by Webdunia.com.

The Webdunia.com Multilingual Online Quiz will enable users from different parts of the country to participate in a quiz in their own mother tongue, website CEO Vinay Chhajlani told reporters.

Initially, the competition will be in six languages - Hindi, Marathi, Gujarati, Tamil, Malayalam and English. Within three months, five other languages - Bengali, Telugu, Assamese, Punjabi and Oriya - will be added.

The quiz sites are www.webdunia.com (Hindi), www.webulagam.com (Tamil), www.weblokam.com (Malayalam) and www.webprapancham.com (Telugu).

The daily one-minute quiz and the weekly and special half-hour quizzes will allow users to earn points for participating and winning, which can be redeemed for attractive prizes. The online initiative will announce a national winner daily and over 20 winners weekly. UNI
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ANALYST’S DIARY

by Ashok Kumar

Dr Reddy’s loses, Andrx gains

In a big disappointment for Dr Reddy’s the US FDA has intimated to the company that it has lost its 180 days generic marketing exclusivity for Omeprazole. It may be called that Dr Reddy’s claimed to be first to file Para IV certification for Omeprazole 40-mg capsules and hence there were huge expectations from generic marketing exclusivity on the same.

Omeprazole could have contributed around $ 16 million, or nearly Rs 80 crore to Dr Reddy’s sales during FY 2002-03. On the other hand, the US FDA has approved Andrx application to market generic Omeprazole in the US market.

Andrx also gains from withdrawal of tentative approval from Dr Reddy’s. Andrx would also receive marketing exclusivity for 40-mg capsules (which was expected for Dr Reddy’s). The 180-day exclusivity gives drug companies a huge marketing advantage since they can price the drug at 35 to 60 per cent discount to the branded products. After the period ends, however, prices crash by as much as 80 per cent or more. This loss will, therefore, mean that Dr Reddy’s can only enter the market after the period, with consequent slimming of margins and consequently its bottomline will take a hit. Nevertheless, I will still place a bet or two on Dr Reddy continuing to be an outperformer in the year ahead.

L&T was wobbly on news that Grasim paid Rs 306.60 a share, a 47.1 per cent premium for a 10 per cent stake acquisition. For the L&T scrip, the worry is that the cement division demerger, one of the triggers for the stock, is now very unlikely. The uncertainty of whether the 10 per cent is good enough for Grasim to influential player also impacted the market sentiment .

Reliance Industries was up on expectation. Its profit for the October-December quarter will be boosted substantially by the sale. Other cement shares rose broadly on expectations the sale could trigger a new round of consolidation in the cement sector. The market drove down the Grasim scrip on the belief that an outflow of Rs 770 crore would result in higher leverage and affect the company’s profitability. But one has to look at the deal from a one-year perspective, when the gains will actually be reflected. In the central region markets, the two companies will control nearly a 60 per cent share. So even a few rupees increase per bag will have a multiplier effect. L&T, like ACC, is not managed by a single promoter and is widely held by financial institutions and the public.

Therefore, even a 10 per cent stake should give the company enough leverage to influence decisions, as has Gujarat Ambuja’s 14.4 per cent in ACC. That means the deal has narrowed down the market to two big players — the ACC Gujarat Ambuja and the L&T - Grasim combine. Finally, a possible merger of the cement division with Grasim may be considered over a long-term perspective. Once again, I would not close my bets at these counters as yet.
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ROUND-UP

Wipro inks pact with Santera Systems

Bangalore, December 4
Wipro Technologies has signed a contract with Texas-based Santera Systems, a leading provider of switching equipment for the global communications market, for setting up a global development centre to develop next-generation telecom equipment for Santera.

Wipro has set up a centre that will work along with a Santera engineering team for joint product development and feature enhancement and customisation of Santeraone, a carrier-grade voice and data switching solution. PTI

Infosys looks for acquisition

NEW DELHI: IT company Infosys Technologies today said it is looking for the acquisition of companies in the USA, Europe or Japan, which are into consulting in niche areas or those specialising in package implementation.

“We are looking for the acquisition of companies which have a visibility, can offer us growth opportunities, and compliment our strengths,” Infosys Chief N.R. Narayanamurthy told reporters here. PTI

Ford cuts jobs in cost-saving move

DETROIT: Ford Motor Co said on Monday that it was cutting some benefits for white-collar employees and laying off hundreds of hourly workers in moves that could save it hundreds of millions of dollars a year.

The world’s No. 2 automaker — reeling from its worst financial crisis in nearly a decade — said the blue-collar job cuts, totaling about 600, would come from eliminating one of two production shifts at its vehicle assembly plant in Edison, New Jersey. Reuters

Kodak, Sanyo reach pact

TOKYO: US photographic equipment giant Eastman Kodak Co and Japan’s Sanyo Electric Co Ltd have reached an agreement to jointly develop a next-generation display device, a report said today.

Kodak and Sanyo will set up a joint venture this month to produce organic electro-luminescent (EL) panels touted as a potential replacement for liquid crystal display (LCD), the business daily Nihon Keizai Shimbun said. Organic EL panels will be used for mobile phones and digital cameras. AFP

Tornado for Car Infotainment

BANGALORE: Wind River Systems Inc, a provider of software and services for connected smart devices, has introduced Tornado for Car Infotainment, a complete development platform for creating car infotainment and telematic devices such as in car navigation systems, global positioning systems, car entertainment systems, and wireless automotive devices.

Tornado for Car Infotainment provides a pre-integrated software development solution that combined Wind River’s leading embedded software with the latest automotive connectivity and wireless networking protocols, according to a company statement issued here today. UNI

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BIZ BRIEFS

PNB loans
Ludhiana, December 4
A retail lending function and customer meet was organised by the Salem Tabri branch of Punjab National Bank in association with the Rajpura Road, Haibowal Kalan and Basti Jodhewal branches here today. According to a press note of the bank, loans amounting to Rs 1.93 crore were distributed under various retail lending schemes. TNS

Bank advances
Kathua, December 4
The banks in the district have advanced loans amounting to Rs 1310.26 lakh under various self-employment schemes during the first six months of the current financial year. This was stated at the District Consultative Committee meeting of the Lead Bank scheme here today. The District Development Commissioner, Mr B.D. Sharma, presided. OC

Awarded
Yamuna Nagar, December 4
Mr Ramesh Kumar Goyal, Managing Director of Roshan Industries, has been honoured with Udyog Patra award. He was given the award by Dr Murli Manohar Joshi. OC

Hyundai sales
Chennai, December 4
Hyundai Motor India has sold 7,139 cars in November this year. Commenting on the sale, HMIL Managing Director Y.S. Kim said “the sale was in spite of the market experiencing a general slowdown. It can be attributed to its total quality. UNI

Crisil rating
Mumbai, December 4
Crisil has downgraded ratings of Rs 2.6 billion non-concertible debenture issues of Tata Finance from “A” to “BBB”. Similarly, the agency has downgraded the rating of TFL’s fixed deposit programme from “FA” to “FA-” and the “P2+” rating assigned to Rs 1 billion commercial paper programme to “P3+”. UNI

Intas Pharma
New Delhi, December 4
Intas Pharmaceuticals announced a cut in price for Lipicor, a high blood cholesterol drug. The new prices of Lipicor 10 to cost Rs 6.25 per tablet, down from Rs 14.90/tablet. And Lipicor 20 will be at Rs 11.90 per tablet, down from Rs 24.90 per tablet. TNS

Cine workers
New Delhi, December 4
Parliament today approved a Bill to cover about 63,000 workers under various welfare schemes including a health scheme for them and their families. TNS

Caderal Servers
Chandigarh, December 4
The LIC has installed more than 6,000 Caderal Unix Ware 7 servers to manage its records and operations across the country, said Mr Ken Bergenthal, Asia Pacific Managing Director, Caldera, here today. He said the Caldera servers were being used in more than 2,000 branch offices of the LIC across the country. TNS

Kotak Mahindra
Mumbai, December 4
Kotak Mahindra Mutual Fund (KMMF) has declared a dividend of Rs 0.0130 per unit under the K-liquid scheme. The record date for dividend was December 3, 2001 and the cum dividend NAVs for the scheme was Rs 10.0144. UNI

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