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Management tussle affects growth of Punjab Tractors
New Delhi, February 1
Despite revival of the tractor market after successive good monsoons, Punjab Tractors Ltd., a medium tractor manufacturer from Mohali, seems to have failed to reap the dividends, perhaps, due to the tussle in the management at the top level.

Cabinet defers decision on OVL bid in Nigeria
Kozhikode airport gets international status
New Delhi, February 1
The Union Cabinet today deferred a decision on allowing ONGC Videsh Ltd (OVL) to re-enter the race for two exploration blocks in Nigeria that it earlier lost to a Korean firm despite being the highest bidder while granting Kozhikode Airport in Kerala the status of an international airport.

ONGC rating by Moody’s
Moody’s rating has assigned the highest-ever credit rating to the ONGC with “Baa1” for indicating foreign currency debt rating and A2 for the local currency issuer rating. The ratings have been released by Moody’s today in response to the ONGC’s proposal of October, 2005.

Ashwani Kumar Economic corridor in Punjab his priority
Chandigarh, February 1
The setting up of a fruit processing unit in Gurdaspur and an economic corridor for furthering Indo-Pak trade via Wagah are the immediate priorities of the new Union Minister of State for Industries, Mr Ashwani Kumar.

STCI acquires UTI Securities
Mumbai, February 1
The Securities Trading Corporation of India, a primary dealer and subsidiary of public sector Bank of India, today outbid its rivals in acquiring UTI Securities, an undertaking of Unit Trust of India, for a consideration of Rs 265 crore. In the final bidding, STCI outsmarted its two prominent rivals Bank of Baroda and the Standard & Chartered Bank.



A painting entitled, Homme a la Pipe, by Spanish artist Pablo Picasso is seen at the Sotheby’s auction house in London on Wednesday. The painting is expected to fetch between £2.8 million and £3.8 million (Euro 4.1 million and 5.6 million) at the auction, which would be on from Sunday to Tuesday. — AFP

EARLIER STORIES

 
Nissan Motor Co Chief Operating Officer Toshiyuki Shiga poses with a new compact car, Moco, in Tokyo on Wednesday. The four-seater passenger car offers eight choices of body colour and has a fuel efficiency of 21 km per litre.
Nissan Motor Co Chief Operating Officer Toshiyuki Shiga poses with a new compact car, Moco, in Tokyo on Wednesday. The four-seater passenger car offers eight choices of body colour and has a fuel efficiency of 21 km per litre. — AP/PTI

Aviva buys 51 pc stake in Lankan firm
New Delhi, February 1
After its successful stint in India, British insurer Aviva Plc has increased its footprint in the sub-continent by acquiring Sri Lanka’s Eagle Insurance Ltd for £15 million.

Luxembourg, France agree to oppose Mittal’s bid
Paris, February 1
Luxembourg Prime Minister Jean-Claude Juncker said today that France and Luxembourg were “on the same wavelength” regarding a hostile takeover bid by Mittal Steel for Arcelor and had “agreed” on their response.

Yellow metal trades at Rs 8,210
New Delhi, February 1
Yellow metal prices maintained their upward march on the bullion market today on steady buying by retailers and set a new record of Rs 8,210 per 10 grams.

IDBI, HDFC Bank hike lending rates
Mumbai/New Delhi, February 1
Taking a cue from HDFC Bank, IDBI today hiked retail lending rates by 0.25 per cent to offset rising cost of deposits, but public sector banks like State Bank of India have decided to wait and watch for now.

Ambassador Diesel Turbo for Punjab in pipeline
Ludhiana, February 1
Riding high on the growing demand for Sports Utility Vehicle in the country, Hindustan Motors Limited has decided to treble the production of Mitsubishi Pajero in two phases.

Mahavir Spinning to become Vardhman Textiles
Ludhiana, February 1
Vardhman Group, one of country’s largest textile groups, intends to change the name of its company from Mahavir Spinning Mills Limited to Vardhman Textiles Limited in the coming financial year.



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Management tussle affects growth of Punjab Tractors
Manoj Kumar
Tribune News Service

New Delhi, February 1
Despite revival of the tractor market after successive good monsoons, Punjab Tractors Ltd., a medium tractor manufacturer from Mohali, seems to have failed to reap the dividends, perhaps, due to the tussle in the management at the top level.

After the disinvestment of the Punjab government’s 23.49 per cent stake in the company to the private equity firm CDC Capital Partners for Rs 218.39 crore in July 2003, the top management headed by Vice Chairman-cum-Managing Director Yash Mahajan has remained unchanged.

But industry experts said due to clash of interest among some stakeholders and lack of long-term commitment by private equity firms, the company has lost its direction resulting in slower than expected growth.

“While all the players like M&M, Sonalika and even public sector tractor manufacturer HMT are diversifying into allied fields, Punjab Tractors have even sold its share in the Swaraj Mazda, a successful joint venture that was manufacturing LCVs with rising demand”, said an industry analyst.

Private equity firm Actis, which presently holds about 29 per cent stake in the company, along with 15 per cent held by LIC and 11 per cent by the Delhi-based Burman family, which owns the Dabur Group of companies, is at loggerheads with the present management.

Company sources said the Board of Directors of the company, which met here yesterday to pass the quarterly results, did not discuss “any issue related to change in the management, except clearing the names for some vacancies”.

Mr Donald Peck, Managing Partner of Actis, who had resigned from the board in June last year, has rejoined the board of Punjab Tractors.

According to industry sources, Actis has been disturbed over the decision of the management to sell off Punjab Tractors’ stake in Swaraj Mazda to Sumitomo Corporation last year for about Rs 60 crore. Subsequently, it is pressing for a change in the top management.

Mr Mahajan has been at the helm of affairs for the past many years along with other directors of company. Though he could not be contacted, his close aides told The Tribune that “talk of change in management was only a speculation and the company was doing very well. The issue of management was not discussed in the board at all”.

A senior official of the company, however, admitted that due to the recent assembly elections in Bihar, panchayat elections in UP and problems in farm credit in MP, the sales of tractors had been adversely affected, resulting in marginal fall in the net profit in the third quarter to Rs 20.80 crore this year as against Rs 21 crore in the corresponding period last fiscal.

At present, the company has about 13 per cent share in domestic market, and earned about Rs 40 crore from exports during the first nine months of the fiscal. However, industry experts said, with the launch of new models by HMT and Mahindra & Mahindra in the below-Rs 2 lakh segment, Punjab Tractors is fast losing its image in the market that would adversely affect its share in the near future.

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Cabinet defers decision on OVL bid in Nigeria
Kozhikode airport gets international status
Tribune News Service

New Delhi, February 1
The Union Cabinet today deferred a decision on allowing ONGC Videsh Ltd (OVL) to re-enter the race for two exploration blocks in Nigeria that it earlier lost to a Korean firm despite being the highest bidder while granting Kozhikode Airport in Kerala the status of an international airport.

“The issue did not come up for discussion and it has been deferred,” Information and Broadcasting Minister Priya Ranjan Dasmunshi said here.

The Indian firm got the opportunity to get back the blocks after the Korean National Oil Corp (KNOC) delayed submission of bank guarantees for payment of signature bonus. OVL, which was the top bidder for both blocks but had to give these away to KNOC as the latter was given the first right of refusal by the Nigerian Government, offered signature bonus of $310 million and work commitment of $525.5 million in OPL 323.

By granting Kozhikode international airport status, Kerala will have three international airports, the others being Thiruvananthapuram and Kochi.

The only airport in Kerala, which is not international, is the one at Kannur.

The Cabinet decided to retain 20 per cent of the funds meant for the Accelerated Rural Water Supply Programme (ARWSP) in the Tenth Plan (2002-07). However, the ceiling could be exceeded in exceptional cases where focussed funding was required to tackle severe cases of contamination of water.

India and the Philippines would strengthen the existing friendly relations and promote cooperation in tourism for the next five years through an agreement approved by the Cabinet today. According to the agreement, the two countries shall create favourable conditions for the development of long-term cooperation in tourism for mutual benefit.

Aiming at enhancing employment opportunities in the rural sector, the Cabinet today approved amendments to the Khadi and Village Industries Commission Act for modernising its organisational structure and operating procedures. The KVIC would be called the National Khadi and Village Industries Commission after Parliamentary approval is given to the relevant Bill.

The Cabinet Committee on Economic Affairs today gave its approval for additional Kasturba Gandhi Balika Vidayala (residential schools) for girls belonging to the SC/ST, OBC and minority communities.

The facility is extended to these communities in difficult areas at upper primary level. These schools will be set up by utilising the savings accruing under the scheme within the total allocation of Rs 489 crore.

The CCEA also gave its approval for the merger of the KGBV scheme with the programme of Sarva Shiksha Abhiyan from the 11th Plan.

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ONGC rating by Moody’s

Moody’s rating has assigned the highest-ever credit rating to the ONGC with “Baa1” for indicating foreign currency debt rating and A2 for the local currency issuer rating. The ratings have been released by Moody’s today in response to the ONGC’s proposal of October, 2005. The remarkable feature is that the ratings not only pierce the sovereign credit rating of India; these are the highest-ever credit ratings assigned by Moody’s to any Indian corporate.

While the indicative foreign currency debt rating is two notches higher than the sovereign foreign currency rating for India, the local currency issuer rating is six notches above the sovereign local currency rating. The credit rating exercise was initiated by the ONGC to facilitate borrowing in domestic as well as overseas markets to fund its growth plans. — UNI

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Economic corridor in Punjab his priority
Prabhjot Singh
Tribune News Service

Chandigarh, February 1
The setting up of a fruit processing unit in Gurdaspur and an economic corridor for furthering Indo-Pak trade via Wagah are the immediate priorities of the new Union Minister of State for Industries, Mr Ashwani Kumar.

In an exclusive interview with The Tribune, Mr Ashwani Kumar, who represents Punjab in the Rajya Sabha, says that though his ministry faces a challenge to establish a firm and secure policy for laying the foundation for integrated development of industry in the country as a whole, some areas, like the border districts of Punjab, need a special major industrial unit for accelerating the pace of growth and development there.

“Punjab has a long way to go in terms of rapid industrialisation. The agricultural economy of the state has already reached saturation and the only way to generate gainful employment for the youth of the state to restore its industrial economy which had suffered during terrorism,” says Mr Ashwani Kumar.

He also advocates upgradation of the traditional industry of Punjab such as the foundry industry in Batala, hosiery, textile, bicycle and auto parts in Ludhiana and Amritsar and sports good industry in Jalandhar.

“I shall visit each of three regions — Majha, Doaba and Malwa — in coming weekends to assess what can be done to facilitate rapid industrialisation of the state,” Mr Ashwani Kumar said.

He is convinced that Punjab needs to promote further agro and food-based industry, besides mechanising dairy farming. The setting up of special economic zones and IT parks should be the additional focus. “My endeavour will be to secure a major industrial project for Punjab, especially in the Majha belt, which continues to remain industrially backward. I would also try for a fruit processing unit in Gurdaspur. I am confident that in months ahead, we would be able to make meaningful initiative in these areas,” Mr Ashwani Kumar said.

Is your elevation as a Union Minister an indication of you being named a candidate from Gurdaspur in the next general election ?

“I cannot answer this question at this stage. But if the party high command considers me worthy to contest the elections, I shall be honoured from a constituency which was served very well by my late father Mr Prabodh Chandra,” said Mr Ashwani Kumar.

Special packages need relook

New Delhi: Earlier, after taking over as the minister of state for Industry in the Union Ministry of Commerce and Industry here, he said that industry in Punjab had been hit due to the special packages given to the neighbouring states of J&K, Himachal and Uttaranchal.

“We are concerned about the adverse impact on the Punjab industry of the tax concessions to the industry in Himachal Pradesh, Uttaranchal and J&K. We will press the Finance Ministry to enhance financial support for strengthening infrastructure in industrial clusters, especially Batala, Ludhiana and Amritsar in Punjab,” said Mr Ashwani Kumar.

Claiming that he was not against any tax concessions to these hill states, he said, “there is a general consensus that 10- year tax breaks have adequately helped industrialisation in these states. But it is also a fact that it has adversely affected the industry in Punjab and other neighbouring states.”

Since the tax concessions, he said, were coming to an end in 2007 ,“ I think time has come to have a re-look on this issue,” said Mr Ashwani Kumar. “I have been assured by Civil Aviation Minister Praful Patel to open an airport in Pathankot for improving connectivity in the region,” he said. — TNS

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STCI acquires UTI Securities

Mumbai, February 1
The Securities Trading Corporation of India (STCI), a primary dealer and subsidiary of public sector Bank of India (BoI), today outbid its rivals in acquiring UTI Securities, an undertaking of Unit Trust of India (UTI), for a consideration of Rs 265 crore.

In the final bidding, STCI outsmarted its two prominent rivals Bank of Baroda and the Standard & Chartered Bank.

When contacted, STCI Managing Director G Narayan said that UTI Securities would maintain its trademark name for the next two years as per terms and conditions mentioned in the bid terms.

Similarly, Managing Director Rama Mohan Rao will continue to head the organisation at least for the next one year.

Mr Narayan said that “there will not be any interference in the professional activities of UTI Securities.”

UTI Securities, which has specialised business portfolio in broking, merchant banking and investment banking has a net worth of Rs 45 crore with 220 staff and 43 outlets (20 branches and 23 franchises) spread across the country.

He said there would not be any change in the current business model of UTI Securities. However, the board would have to be reconstituted following the hundred per cent acquisition by STCI.

Mr Narayan would also be a member of the Board among others to represent STCI.

On capital infusion, Mr Narayan said: “We will have to look into this aspect and capital infusion will not be a problem if required.”

In the past, a number of entities in the financial sector had shown interest in UTI Securities including big names such as SBI Caps, Reliance Capital and UTI Bank. — UNI

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Aviva buys 51 pc stake in Lankan firm

New Delhi, February 1
After its successful stint in India, British insurer Aviva Plc has increased its footprint in the sub-continent by acquiring Sri Lanka’s Eagle Insurance Ltd for £15 million.

Aviva has acquired 51 per cent stake for £15 million (Rs 117 crore) in Lanka’s third largest insurance company Eagle and also entered into a bancassurance tie with the country’s biggest NDB Bank.

“This strengthens our position in the Indian sub-continent.

We will bring our bancassurance experience from India to become the pioneer for bancassurance in Sri Lanka,” Aviva Plc Executive Director Philip Scott said in a statement.

Aviva has identified Asia as the “high growth market”, he said referring to the company’s entry into India in 2002 and emerge as the fastest growing life insurer.

When contacted, Aviva India CEO Stuart Purdsy told PTI: “The acquisition will bring significant synergy to our international business. It shows our long term commitment to the Indian sub-continent.”

“Aviva has grown rapidly in India by combining its global expertise with local talent. We are now looking to replicate that in Sri Lanka,” Mr Purdy said. — PTI

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Luxembourg, France agree to oppose Mittal’s bid

Paris, February 1
Luxembourg Prime Minister Jean-Claude Juncker said today that France and Luxembourg were “on the same wavelength” regarding a hostile takeover bid by Mittal Steel for Arcelor and had “agreed” on their response.

Speaking after a meeting with French Prime Minister Dominique de Villepin, Mr Juncker said: “We are on the same wavelength regarding the necessary response following the hostile takeover bid of Mittal on Arcelor”.

Juncker, who is to meet French President Jacques Chirac late today, has already expressed his opposition to the $22.7-billion bid by Mittal for Arcelor. After a meeting yesterday with majority shareholder and founder of Mittal Steel, Lakshmi Mittal, Mr Juncker had told the Luxembourg Parliament that the businessman had failed to provide “plausible explanations nor a clear industrial concept”.

SEOUL: Nippon Steel, and South Korea’s Posco may help Arcelor fend off Mittal Steel’s takeover bid. Posco’s Chief Executive Lee Ku Taek and JFE Steel Corp.

President Hajime Bada are scheduled to attend an International Iron and Steel Institute meeting in Paris on Thursday. Arcelor is also planning to meet Nippon Steel on Thursday, Chief Executive Guy Dolle said. Arcelor and Nippon Steel banding together may block the transaction and stop Mittal from getting bigger. — AFP, Bloomberg

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Yellow metal trades at Rs 8,210

New Delhi, February 1
Yellow metal prices maintained their upward march on the bullion market today on steady buying by retailers and set a new record of Rs 8,210 per 10 grams.

Gold prices strengthened in domestic market on retail customers and jewellers’ buying to meet the ongoing wedding demand, which also discounted reports of a fall in the Asian markets.

In overseas markets, gold fell $ 1.31 to $ 567.59 an ounce.

Standard gold and ornaments gained another Rs 10 each at Rs 8,210 and Rs 8,060 per 10 grams, respectively, on increased demand from retailers. Sovereign followed suit and quoted higher by Rs 25 at Rs 6,300 per piece of eight gram. — PTI

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IDBI, HDFC Bank hike lending rates

Mumbai/New Delhi, February 1
Taking a cue from HDFC Bank, IDBI today hiked retail lending rates by 0.25 per cent to offset rising cost of deposits, but public sector banks like State Bank of India have decided to wait and watch for now.

Announcing the hike, IDBI Chairman V.P. Shetty said this was effected following the increase in deposit rates and to reduce the gap in yield and cost.

“It is a realignment done due to the rising cost of deposits,” he said, admitting pressure on net interest margin.

HDFC Bank, too, has raised home loan rates by 0.5 per cent across the board with effect from today. It has also increased deposit rates by 0.25-0.5 per cent, a bank official said.

As a result, fixed rate for loans of Rs 5 lakh and above would go up to 9 per cent, while in case of floating rates, it would go up to 8.25 per cent.

India’s top two banks State Bank of India and ICICI Bank are also closely watching the developments and are expected to announce their stance on lending rates by this week-end.

An ICICI Bank official said the bank would take a call after watching the impact on cost of funds.

However, the country’s second largest PSU bank Punjab National Bank (PNB) has ruled out any change in home and car loan rates till March, while the Oriental Bank of Commerce (OBC) is yet to take a view.

“We are in no way inclined to change our prime lending rate or interest rate in any other segment,” PNB chairman S.C. Gupta said.

Kolkata-based UCO Bank, too, is undecided on hiking rates.

The pressure on banks to increase lending rates is rising due to increase in cost of funds, as deposit rates are moving up, besides the recent increase in short term rates by the Reserve Bank (repo and reverse repo). — PTI

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Ambassador Diesel Turbo for Punjab in pipeline

Ludhiana, February 1
Riding high on the growing demand for Sports Utility Vehicle (SUV) in the country, Hindustan Motors Limited has decided to treble the production of Mitsubishi Pajero in two phases.

“We are expecting that the demand for SUVs is going to rise substantially in the country. Therefore, in order to cater to increasing demand, we have decided to increase the production of our SUV Pajero presently from 40 vehicles per month to 120 vehicles per month in next fiscal,” Hindustan Motors Managing Director R Santhanam said here. However, he refused to divulge the details of investment to be put in for enhancing the production.

Hindustan Motors, a flagship company of C.K. Birla Group, is also quite bullish over the demand for its passenger vehicle ‘Ambassador’ in Punjab market.

The company is in the process of launching Ambassador ‘Diesel Turbo’ exclusively in the state.

“We will soon be launching Diesel Turbo version of Ambassador for Punjab only,” the MD said. — PTI

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Mahavir Spinning to become Vardhman Textiles

Ludhiana, February 1
Vardhman Group, one of country’s largest textile groups, intends to change the name of its company from Mahavir Spinning Mills Limited to Vardhman Textiles Limited in the coming financial year. “We have intentions to change the name of our company Mahavir Spinning Mills Limited to Vardhman Textiles Limited in the next fiscal. Our company has turned into an integrated textile facility while the name signifies only one part of our whole operations,” Vardhman Group Chief Financial Officer Neeraj Jain said here.

The Ludhiana-based Vardhman Group is currently in process of investing Rs 1,600 crore for setting up new plant in Madhya Pradesh and expanding its production capacity in its existing plant in Baddi over the next two years. — PTI

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BRIEFLY

Aluminium prices hiked
New Delhi, February 1
One of the country’s biggest aluminium smelter Hindalco today raised the prices of the metal by Rs 6,000 or 5.3 per cent per tonne. “There is no specific reason behind raising the prices. It is fluctuation on the London Metal Exchange (LME), which galvanised us to take this move,” a Hindalco spokesperson said from Mumbai. — PTI

Federal Bank
New Delhi, February 1
Federal Bank Ltd, became the third Indian company to join the professional securities market of London Stock Exchange. The Federal Bank raised a total of $72 million in an offering of 18 lakh Global Depository Receipts (GDRs) with each GDR representing one underlying share, a company press note said. PSM is the London Stock Exchange’s market for wholesale securities. — PTI

JCT moves into black
Chandigarh, February 1
JCT Limited earned 27 per cent higher pre tax profit of Rs 3.24 crore during the third quarter of the financial year. The company also reported pre tax profit of Rs 10.16 crore during all three quarters of this financial year, as compared to a net loss of RS 4. 50 crore in the corresponding period last year. However, the gross sales turnover and net sales turnover is lower at Rs 140. 22 crore and Rs 131. 48 crore, as compared to Rs 164. 07 crore and Rs 153. 32 crore last year. — TNS

Ind-Swift profit up 55 per cent
Chandigarh, February 1
Pharma major, Ind-Swift Limited has registered 55 per cent increase in profit after tax to Rs 62. 11 million from Rs 40. 18 million, during the third quarter of the financial year 2005-06. The turnover during the quarter, ending December 31, 2005, rose by 20 per cent to Rs 768. 65 million. The net profit for the third quarter of the financial year , included an amount of Rs 105. 07 million arising from sale of shares. — TNS

Satnam Overseas gains Rs 55 m
Chandigarh, February 1
The leading global food company has recorded a 16 per cent increase in its net profit to Rs 55 million, during the third quarter, from Rs 47. 4 million in the corresponding period last year. In the first nine months, the branded turn over was 59. 28 per cent in comparison to Rs 54. 61 per cent last year. The net ;profit margins have increased from RS 134 million last year to Rs 167 million now. — TNS

Simbhaoli Sugar Mills
Chandigarh, February 1
The Ghaziabad based sugar Mills net profit has increased 252 per cent , with net sales recording a healthy 33 per cent growth. The gross turnover recorded by the company during nine month period touched Rs 4367 million. — TNS

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