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THE TRIBUNE SPECIALS
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B U S I N E S S

Eicher, Volvo form JV
Swedish Co to pump in $350 million

Volvo will also help Eicher Motors in exporting its commercial vehicles in emerging markets of Asia, Africa and Latin America New Delhi, December 10
Commercial vehicle manufacturer Eicher Motors Ltd (EML) and Swedish truck major AB Volvo have agreed to form a joint venture with an equity value of $768 million.
Volvo will also help Eicher Motors in exporting its commercial vehicles in emerging markets of Asia, Africa and Latin America

Govt to offer 57 oil, gas blocks under
NELP VII 

New Delhi, December 10
Top global oil and exploration companies, including steel tycoon Lakshmi Mittal are expected to bid for the 57 oil and gas blocks, the largest ever that India would put on auction under the New Exploration and Licensing Policy (NELP) on December 13. Petroleum and natural gas minister Murli Deora today announced that the government will announce NELP VII auction on December 13.

Govt hints  at fuel  price hike
New Delhi, December 10
The Group of Ministers (GoM) constituted by the Prime Minister last month to evolve a broad consensus over the controversial issue of raising petrol and diesel prices in the wake of the hardening trend of global crude oil prices will meet here on December 14 to review the situation.

India Inc’s M&A bill crosses $50 b
New Delhi, December 10
Merger and acquisitions (M&A) are set to become one of the most important trends of 2007 for India Inc, with the total deal value crossing $50-billion mark with one more month still to go.

Airtel offers Rs 2,650 cr for all-India spectrum
New Delhi, December 10
In a surprise move, India’s biggest GSM operator, Bharti Airtel, today offered Rs 2,650 crore for all-India frequency as an initial bid that can be increased further.


A woman walks past the UBS office at the Bahnhofstrasse in Zurich on Monday. Swiss bank UBS unveiled $10 billion in shock subprime writedowns
A woman walks past the UBS office at the Bahnhofstrasse in Zurich on Monday. Swiss bank UBS unveiled $10 billion in shock subprime writedowns on Monday and said it had obtained an emergency capital injection from a Singapore government entity and an unnamed West Asian investor. —Reuters

EARLIER STORIES

 

Tata among world’s ‘Most Important People’
New York, December 10

It is turning out to be a dream year for Indian conglomerate Tatas — BusinessWeek has termed its Rs 1-lakh car as one of the trendsetters of 2007, while naming Ratan Tata among the world's "Most Important People" of the year. The much-talked cheapest car finds a place in the list of "Most Important Trends for 2007" alongside the emergence of India and China as the world's new superpowers.

Ericsson refuses to accept BSNL tender 
New Delhi, December 10
The expansion plans of BSNL may come under pressure as the Swedish telecom giant Ericsson (lowest bidder) has refused to accept the full tender of 22.5 million GSM lines awarded to it.
Lafarge buys Orascom Cement
Bruno Lafont, CEO of construction materials giant Lafarge, addresses a press conference in Paris
Bruno Lafont, CEO of construction materials giant Lafarge, addresses a press conference in Paris on Monday. Lafarge said it has bought Egyptian group Orascom Cement for $12.9 billion. — AFP

RBI warns against fund offers
on e-mail 

Mumbai, December 10
The Reserve Bank of India (RBI) has advised the public not to succumb to the temptation of fictitious offers of large funds through e-mails from unknown entities.

Tax rebate on NRO fixed deposits
Mumbai, December 10
The non-resident Indians (NRIs) living in the US, UK, Canada and Singapore can now avail the benefit of a lesser tax deduction on their non-resident fixed deposit with ICICI Bank, a top bank official said here today.

Bharat Papers to set up unit  at Kathua
New Delhi, December 10
Taking advantage of the tax sops available in Jammu and Kashmir, the Ludhiana-based Bharat Papers Ltd is setting up a world-class paperboard manufacturing unit in Kathua with a capacity of 220 TPD.

Troy Franklin (L), regional general manager of Gloria Jean's Coffees, Ravi Saxena, managing director of Citymax India and Tony White (R), regional development manager of Gloria Jean's Coffees, at the launch of brand 'Gloria Jean's Coffee' in New Delhi
Troy Franklin (L), regional general manager of Gloria Jean's Coffees, Ravi Saxena, managing director of Citymax India and Tony White (R), regional development manager of Gloria Jean's Coffees, at the launch of brand 'Gloria Jean's Coffee' in New Delhi on Monday. Citymax India will invest around Rs 40 crore to roll out 90 outlets throughout India in the next four years. Tribune photo: Manas Ranjan Bhui

Essar eyes 50 pc stake in Kenyan refinery
London, December 10
Indian conglomerate Essar group is understood to have initiated discussions for acquiring 50 per cent stake in a Kenyan refinery from international oil players as part of its move for a global footprint.

Siemens-RITES pact
New Delhi, December 10
Austria-based Siemens Transportation System has entered into a joint venture with consultancy firm RITES to manufacture high-end railway wagons in India entailing an investment of about 30 million euros. The Austrian firm would have a 74 per cent stake in the proposed JV, while the remainder would be with RITES. — PTI

Ispat capex plan
Mumbai, December 10
Ispat Industries, one of the leading integrated steel makers and the largest private sector producer of hot rolled coils in India, plans an investment of over Rs 10,000 crore in expanding its steel-making capacity. "As part of the first-phase expansion, the company would raise steel-making capacity of its Dolvi plant in Maharashtra to 5 million tonnes from 3 million tonnes in 18-months period," Ispat Industries VP Atul Kumar said on the sidelines of the Manufacturing Summit 2007 here. — PTI

 

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Eicher, Volvo form JV
Swedish Co to pump in $350 million

New Delhi, December 10
Commercial vehicle manufacturer Eicher Motors Ltd (EML) and Swedish truck major AB Volvo have agreed to form a joint venture with an equity value of $768 million.

The two partners have signed a letter of intent to this effect here today and expects the JV to start operations by July next year. The Indian partner will hold a 54.4 per cent stake in the JV, while Volvo will own 45.6 per cent.

It will focus mainly on distribution of commercial vehicles in India as well as overseas markets, where the partners have interest like research and development and manufacturing. Besides, the partners are also mulling to get into financial services business through the JV.

"The partnership gives us the opportunity to share each other's strengths. While we can offer our low-cost design and engineering capability, sales and service network in India, Volvo can offer Eicher the technology and access to global markets," Eicher Motor managing director and CEO Siddhartha Lal told reporters here.

He said once the JV was formalised, EML's commercial vehicle business along with related components, design and engineering service businesses would be transferred to the new company that will be a step down subsidiary. EML is making an equity contribution of $418 million.

AB Volvo, which will be investing $350 million into the JV, will also pick up a 8.1 per cent stake in EML through purchase from its promoters. The Swedish firm will, however, keep its existing buses business in India separate.

"Our bus business in India is with a separate partner (Jaico) and this would remain so. Our Bangalore facility will continue to produce Volvo buses and trucks, while Eicher will roll out products from its facility in Pithampur," AB Volvo executive vice-president Jorma Halonen said.

Volvo could, however, look for manufacturing of components from Eicher's Pithampur plant, Halonen added.

The JV will have close to 150 dealerships in India, of which 10 are currently Volvo's. The Swedish company is aiming to increase its presence in the country through the partnership.

Eicher is aiming for greater export of its light, medium and heavy duty trucks and buses overseas.The two companies have, however, ruled out joint branding of vehicles.— PTI

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Govt to offer 57 oil, gas blocks under NELP VII 
Tribune News Service

New Delhi, December 10
Top global oil and exploration companies, including steel tycoon Lakshmi Mittal are expected to bid for the 57 oil and gas blocks, the largest ever that India would put on auction under the New Exploration and Licensing Policy (NELP) on December 13.

Petroleum and natural gas minister Murli Deora today announced that the government will announce NELP VII auction on December 13.

Of the 57 blocks to be offered, 19 deepwater blocks off west and east coasts would be included in the auction, along with 9 shallow water blocks and 29 onland.

Most of the deepwater blocks would be off the west coast, unlike in previous rounds where the east dominated, sources said, adding that one deepwater block would be offered in the Andamans Islands.

Bids are due on April 11, 2008 and the awards would be decided by June.

While Kuwait Petroleum Corporation (KPC), the National Oil Company of Kuwait evinced its interest in the NELP bidding, Reliance Industries and ONGC are holding talks with US major Chevron Corporation to jointly bid for oil and gas exploration blocks,.

Since India introduced the new licensing policy in 1999, it has so far awarded 162 blocks. Of these, 74 belong to ONGC and Reliance Industries has bagged 51-52 blocks.

The minster said first auction roadshow would be held in Mumbai on January 8, while overseas events would begin from end-January, when Deora along with ministry officials would visit a number of places, including Houston, Calgary, London and Perth to invite the attention of global players in the oil and gas blocks in the country.

The blocks identified for Nelp-VII are located in the Rajasthan basin, Cambay basin, Himalayan Foreland and Punjab basin, Ganga basin, Kutch basin, Saurasthra basin, Vindhyan basin, Mumbai Offshore basin, Kerala- Konkan basin, Purnea basin, Bengal basin. Mahanadi basin, Krishna-Godavari basin, South Rewa basin, Palar basin, Assam-Arakan basin, Deccan Syneclise, Cuddapah basin and Andaman basin.

NELP VII has been delayed a number of times. It was originally to be launched in April this year. But controversy over pricing of gas from Reliance Industries' NELP I block in the K-G basin and the global shortage of rigs had delayed it. 

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Govt hints  at fuel  price hike
Tribune News Service

New Delhi, December 10
The Group of Ministers (GoM) constituted by the Prime Minister last month to evolve a broad consensus over the controversial issue of raising petrol and diesel prices in the wake of the hardening trend of global crude oil prices will meet here on December 14 to review the situation.

"The petroleum ministry will put up before the GoM the latest update on accumulating under recoveries of oil marketing companies," petroleum secretary M.S. Srinivasan observed after inaugurating a conference of the Oil Industry Safety Directorate here today.

Srinivasan hinted that the government is considering a combination of fuel price increase and duty cuts to oust the impact of soaring crude oil prices. The reported under recoveries of the state-owned oil marketing companies is expected to breach Rs 700 billion in the current fiscal due to burgeoning crude prices. 

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India Inc’s M&A bill crosses $50 b

New Delhi, December 10
Merger and acquisitions (M&A) are set to become one of the most important trends of 2007 for India Inc, with the total deal value crossing $50-billion mark with one more month still to go.

According to data compiled by international consultancy major Grant Thornton, India Inc recorded M&A deals worth $940 million in November, taking the total for first 11 months of 2007 to $50.79 billion.

A total of 58 M&A deals were announced in November against 51 deals amounting to $610 million in the previous month, according to Grant Thornton. There was a distinct foreign flavour in the overall league table which includes domestic as well as cross-border deals, the data showed.

There were 26 domestic deals, where in both the acquirer and target company were Indian, with an announced value of $110 million, while the month saw 32 cross-border deals valued nearly eight-times at $830 million.

Out of the 32 deals, 22 were outbound wherein Indian companies acquired businesses outside India with a value of $690 million and 10 were inbound with an announced value of $130 million.

The total number of private equity deals announced during the month of November stood at 38 with an announced value of $2,300 million against 43 deals amounting to $1,810 million in the month of October.

The total number of PE deals during the first 11 months of this year stood at 374, with an announced value of $15,920 million.

The most significant deals in November were DLF Ltd's acquisition of Aman Resorts for $250 million, Plethico Pharmaceutical's acquisition of Natrol for $171.89 million.

Bajaj Auto's acquisition of 14.50 per cent stake in KTM Power Sports AG of Austria for $81.40 million was another other major deal of November.

Most significant PE deal was the $800 million investment by ICICI Venture Funds Management Company in Jaypee Infratech, a subsidiary of the Jaypee Group and Merrill Lynch & Co's $377-million investment in seven residential housing projects of DLF Ltd. — PTI 

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Airtel offers Rs 2,650 cr for all-India spectrum
Tribune News Service

New Delhi, December 10
In a surprise move, India’s biggest GSM operator, Bharti Airtel, today offered Rs 2,650 crore for all-India frequency as an initial bid that can be increased further.

Tata Tele moves TDSAT

Tata Teleservices today filed a petition in telecom tribunal TDSAT seeking a direction to the DoT to get back the excess spectrum held by GSM operators beyond the contracted 6.2 MHz.

The company also sought a level -playing field with GSM players on spectrum allocation, which is 2:1 in favour of GSM operators, stated the petition filed through counsel Ramji Srinivas.— PTI

The company said this is a confirmed offer and it reserves the "right to increase this bid in the event of an auction" for such pan-India spectrum.

The company, in a letter to telecom secretary D.S. Mathur, said, "it seems that a satisfactory outcome of the process underway seems unlikely and the issue is headed for a possible long litigation."

"The decision to allocate GSM spectrum to CDMA operators seems to be the additional amount that is being charged, we are left with no option but to follow the same practice, albeit at a more realistic amount than what has been currently proposed," company's joint managing director Akhil Gupta said.

The offer of Rs 2,650 crore takes into account that Bharti Airtel would be given no worse off terms and conditions that are being proposed for dual allocation to CDMA operators in licence fee and other matters, he said.

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Tata among world’s ‘Most Important People’

New York, December 10
It is turning out to be a dream year for Indian conglomerate Tatas — BusinessWeek has termed its Rs 1-lakh car as one of the trendsetters of 2007, while naming Ratan Tata among the world's "Most Important People" of the year.

The much-talked cheapest car finds a place in the list of "Most Important Trends for 2007" alongside the emergence of India and China as the world's new superpowers.

In the BusinessWeek list of "Most Important People of 2007," Tata finds a place alongside 23 other international names such as Apple Computer CEO Steve Jobs, US Federal Reserve chairman Ben Bernanke, media mogul Rupert Murdoch and French president Nicholas Sarkozy.

Celebrity singer Britney Spears and Mexican billioner Carlos Slim are also on the list. Tata has found this place for steering his group firms to the global league with billion-dollar acquisitions and innovative business plans.

Tata was the only Indian name in the BusinessWeek list of most important people as well as the last month's Fortune list. — PTI

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Ericsson refuses to accept BSNL tender 

New Delhi, December 10
The expansion plans of BSNL may come under pressure as the Swedish telecom giant Ericsson (lowest bidder) has refused to accept the full tender of 22.5 million GSM lines awarded to it.

Ericsson, which was earlier awarded 60 per cent of the total contract of BSNL, was also offered the remaining share after Nokia Siemens Networks (NSN) refused to accept its share of 40 per cent of the 22.5-million lines contract due to price differences.

When contacted, Ericsson vice- president (marketing and strategy) P Balaji confirmed the development.

Ericsson had quoted about $107 per line in the tender, while NSN quote was about $167. This new development may force BSNL to look for alternatives such as floating a fresh tender for nine million GSM lines. Ericsson has already started implementing its contract for about 13.5 million lines and BSNL may get capacity addition in next 2-3 months.

Earlier last month, BSNL CMD Kuldeep Goyal had said that the company was exploring three alternatives — award whole contract to Ericsson, talking to BSNL's existing vendors for add-on capacity and finally floating a fresh tender.

The telecom major has been losing its market share and subscriber addition has been falling due to capacity crunch.

It has a capacity of providing five million lines, which would be exhausted in the next 2-3 months. — PTI 

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RBI warns against fund offers on e-mail 

Mumbai, December 10
The Reserve Bank of India (RBI) has advised the public not to succumb to the temptation of fictitious offers of large funds through e-mails from unknown entities.

"Members of public should also not make any remittance towards participation in such schemes/offers from unknown entities," the central bank said while clarifying that sending money abroad to participate in lottery or similar schemes is not permitted under Foreign Exchange Management Act (FEMA).

The RBI has issued the warning to caution individuals who initially receive tempting offers of large funds on various pretexts from unknown overseas entities through e-mails and letters and are later requested to remit a small amount as commission for transfer of money.

The RBI clarified that under FEMA restrictions on transfer of funds also apply to lottery-like schemes functioning in different names such as money circulation scheme or remittances for the purpose of securing prize money/awards etc.

Describing the usual modus operandi of such operators, the RBI said that once the contact is established, the offer is followed by a request seeking details of bank account of the individuals and a demand for some initial deposit/ commission for transfer of money.

The central bank, it said, has been receiving references from individuals in the past seeking approvals for effecting remittances in foreign currency towards commission/fees for receiving prizes won in overseas lottery schemes.

The central bank has also asked the people not to be swayed by copies of certificates/deposit schemes, purported to have been issued by the RBI, which some operators produce to substantiate their claims. — PTI 

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Tax rebate on NRO fixed deposits

Mumbai, December 10
The non-resident Indians (NRIs) living in the US, UK, Canada and Singapore can now avail the benefit of a lesser tax deduction on their non-resident fixed deposit with ICICI Bank, a top bank official said here today.

The NRO FD Plus offers the benefit of concessional rate of tax deducted at source (TDS) under the Double Taxation Avoidance Agreement (DTAA) of India with these countries, ICICI Bank general manager and head NRI services Manish Mishra told reporters here.

"The NRI depositors will just have to submit a declaration form with a proof that they are residents of the US, the UK, Canada or Singapore to avail the benefit," he said.

The four countries account for roughly 50 per cent of the bank's NRI customer base, Mishra said.

A normal NRO FD is subject to a tax of 30.9-33.9 per cent but if DTAA benefit is availed, the deposit is subject to a TDS of only 15 per cent giving a better post tax yield, he added.— PTI

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Bharat Papers to set up unit  at Kathua
Tribune News Service

New Delhi, December 10
Taking advantage of the tax sops available in Jammu and Kashmir, the Ludhiana-based Bharat Papers Ltd is setting up a world-class paperboard manufacturing unit in Kathua with a capacity of 220 TPD.

“The plant in Kathua, spread in an area of 55 acres will be fully operational by June 2008 and would employ about 700 persons,” Bharat Papers vice-chairman B.K. Aggarwal told The Tribune here today.

The entire plant is being sourced from and installed by Hansol EME of Korea, he said.

The BSF group, one of the pioneers in modern and innovative packaging for growing FMCG products, had a turnover of around Rs 300 crore in 2006-07.

“Once the Kathua plant is operational, it would help us to expand our business in domestic as well as international market,” he said adding his company would in near future go for IPO.

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Essar eyes 50 pc stake in Kenyan refinery

London, December 10
Indian conglomerate Essar group is understood to have initiated discussions for acquiring 50 per cent stake in a Kenyan refinery from international oil players as part of its move for a global footprint.

The refinery in Mombasa, in which the government of Kenya owns a 50 per cent stake, has an annual production capacity of about four million tonnes.

According to sources close to the development, Essar is looking to buy out the remaining 50 per cent stake held by three global energy giants — Chevron, Royal Dutch and British Petroleum — in Kenyan Refinery and Petroleum Ltd.

Essar is looking at this potential deal, the announcement for which is expected shortly, in pursuance with its worldwide expansion plans and it would further expand its presence in the African sub-continent.

The group already has three exploration and production blocks in Madagascar and one additional block in Nigeria. — PTI

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BRIEFLY

Bharti Retail
New Delhi, December 10
Bharti Retail, a unit of Bharti Enterprises, will kick off its operations in March next year by setting set up its first small format retail store in North India while the cash and carry business in association with Wal-Mart will commence in the third quarter of next year. This was disclosed by Bharti Enterprises managing director Rajan Bharti Mittal on the sidelines of a Ficci event.— PTI

Tata Group JV
New Delhi, December 10

Tata Group and state-run Engineers India Ltd (EIL) will form a joint venture for doing engineering consultancy and construction projects in India and abroad. "We have signed a memorandum of understanding with Tata Projects Ltd for floating a 50:50 joint venture company for undertaking engineering, procurement and construction (EPC) contracts," EIL CMD Mukesh Rohatgi told reporters here. The MoU is pending with the petroleum ministry for approval, he said.— PTI

Vodafone pact
Bangalore, December 10

Vodafone Essar will outsource all its IT services to IBM India in a deal designed to boost efficiency and further enhance its service to customers, IBM said today. Under the deal, IBM India will assume responsibility for the management of all Vodafone Essar's IT operations with the exception of network service platforms, spanning both hardware and software.— PTI

Autoline stake
Mumbai, December 10
Foreign fund house Merrill Lynch Capital today said it has offloaded its stake in auto ancillary company Autoline Industries, bringing it down to 2.66 per cent, at about Rs 1.65 crore. Merrill Lynch Capital Mkt Espana SA SV has sold 95,000 shares amounting to 0.92 per cent in the firm on December 6, through open market transaction, Autoline said in a disclosure to the BSE.— PTI

Patel Engg
Mumbai, December 10
Construction and engineering firm Patel Engineering today said it will raise up to $500 million through the issue of securities in the international markets. The shareholders of the company through postal ballot would consider raising $500 million dollar the issue of Global Depository Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs) and other equity related instruments subject to necessary provisions and approvals.— PTI

VSNL plan
Mumbai, December 10
Videsh Sanchar Nigam Ltd (VSNL), a part of Tata group, today said it will merge its wholly-owned subsidiary VSNL Broadband Ltd, with itself. The board of directors of the company has approved the proposed merger of its wholly-owned subsidiary, VSNL Broadband, with itself, VSNL said in a filing to the BSE.— PTI

Orbit Corp
Mumbai, December 10
Real estate developer Orbit Corporation today said it has received the Bombay High Court approval for merger of its three subsidiary companies with itself. The Bombay High Court has approved the scheme of amalgamation of Orbit Constructions & Realtors, Orbit Buildcon & Realty and Orbit Housing with itself, the company said in a filing to the BSE. The entire business and undertakings as also all the assets and liabilities of the said subsidiary companies stands transferred to and vested with Orbit Corporation, with effect from April 1 this year. — PTI

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