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Re breaches 51-mark
Mumbai, February 27
The Rupee today recorded an all- time low at 51.15
against the US dollar at the closing session with a loss
of 70 paise on heavy dollar demand from importers
and weak economic growth data, that spurred selling
in domestic shares.

US boosts stake in Citigroup
New York/Washington, February 27
The US government will boost its stake in Citigroup Inc to as much as 36 per cent, bolstering the banking giant's capital base in one of the most dramatic efforts yet to prop up the ailing banking industry.

RIL to consider merger with RPL
Mumbai, February 27
A proposal to merge Reliance Petroleum Ltd (RPL) with Reliance Industries Ltd (RIL) will be considered by their respective boards on March 2, both companies said in filings to the stock exchanges.




EARLIER STORIES

THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS


Govt approves development fee at Mumbai airport
New Delhi, February 27
Air passengers should now get prepared to pay for using the Mumbai airport as well. The Centre on Friday approved the levy of development fee (DF) by Mumbai International Airport Ltd (MIAL) at the CSI Airport, Mumbai.

President and CEO, Honda India, Shinji Aoyama (L), and operating officer for Southwest Asia, Masahiro Takedagawa pose at the launch of Honda CB1000R and CBR1000RR Fireblade in New Delhi on Friday.
President and CEO, Honda India, Shinji Aoyama (L), and operating officer for Southwest Asia, Masahiro Takedagawa pose at the launch of Honda CB1000R and CBR1000RR Fireblade in New Delhi on Friday. CBR1000RR Fireblade is priced at Rs 12.5 lakh and CB1000R at Rs 9.5 lakh. Tribune photo: Mukesh Aggarwal

Power generation with sugar mills
Haryana seeks Rs 250-cr loan
Chandigarh, February 27
The Haryana government is seeking a loan of about Rs 250 crore from a Japan-based bank for starting co-generation of power in 10 cooperative sugar mills of the state.

Honda suspends work on
2nd plant

New Delhi, February 27
Hit hard by the slowdown in the auto market in the country, Honda Siel Cars India (HSCI) has decided to not only increase the prices of some its models but has also indefinitely put on hold opening of its Rs 1,000-crore second plant.

BSNL launches 3G services in 11 cities
New Delhi, February 27
Even as the Department of Telecom (DoT) has been trying hard to tackle various issues facing the auction of the 3G spectrum space for private telecom operators in the country, the state-run operator BSNL today launched the third generation (3G) services in 11 cities around the country.

Tata Steel Q3 profit dips 44 per cent
Mumbai, February 27
Tata Steel today said its consolidated net profit dipped by 44 per cent to Rs 732.21 crore in the October-December quarter, but held itself from slipping into negative terrain despite a slump in demand.

ONGC mulls IPO for Dahej plant
New Delhi, February 27
ONGC is planning an initial public offering of its subsidiary, which is building the Rs 12,440 crore petrochemical plant at Dahej in 2011, even as it agreed to give the state gas utility GAIL India a 19 per cent stake in the mega project.

 





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Re breaches 51-mark

Mumbai, February 27
The Rupee today recorded an all- time low at 51.15 against the US dollar at the closing session with a loss of 70 paise on heavy dollar demand from importers and weak economic growth data, that spurred selling in domestic shares.

The partially convertible rupee opened at 50.62 per dollar and later touched a low at 51.

It fluctuated in a wide range between 50.55 and 51.17 in intra-day trade.

The rupee continued to trade at over 50 against the dollar for the second day in a row.

Dealers said concerns about foreign funds withdrawing money from Indian markets besides month-end dollar from oil companies is putting pressure on the local unit.

However, state-run banks were seen selling dollars at around 50.72 to prevent the rupee from slipping further, clearly a case of RBI intervention.

The Reserve Bank of India (RBI) today fixed the reference rate at Rs 50.73 per US Dollar, 32 paise up against its yesterday's rate of Rs 50.41 per USD.

The reference rate for Euro rose by 54 paise at Rs 64.57 per unit from its previous rate of Rs 64.03 per unit, a RBI release said.

Meanwhile, the six-month and annualised forward dollar premiums were at softer levels at 1.87 (2.00) per cent and 1.65 (1.70) per unit respectively.

The rupee ended at an all-time low at 64.62/64 (64.36/38) per unit against the Euro and against Pound Sterling at 72.55/57 (71.88/90) per unit and at 52.30/32 (51.40/42) per hundred units against the Japanese Yen, brokers added.

In the overseas market, the dollar gained against its major rival euro but slipped against Asian competitor yen.

The rupee yesterday only set a fresh low record of 50.46 on sudden surge in demand for dollar.

The previous low record of the domestic currency was recorded on last December 2 when it touched the intra-day high of 50.60.

Including today's fall of 66 paise, the rupee had slumped by a whopping 151 paise or 3.04 per cent in the straight past five sessions.

Continued selling by Foreign Institutional Investors (FIIs) in equity markets also weighed against the rupee.

They pulled out nearly $1.6 billion in the current calendar year so far, dealers
said. Weakness in equity markets also put pressure on domestic unit, they added.
— Agencies

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US boosts stake in Citigroup

New York/Washington, February 27
The US government will boost its stake in Citigroup Inc to as much as 36 per cent, bolstering the banking giant's capital base in one of the most dramatic efforts yet to prop up the ailing banking industry.

The government will swap up to $25 billion of its preferred shares into common stock, dramatically diluting existing shareholders. Citigroup will stop paying dividends on its preferred and common stock, and promised to shake up its board of directors.

The announcement on Friday does not immediately inject more money into Citigroup, but gives chief executive Vikram Pandit more time to shrink the third-largest US bank, sell unwanted assets and restore investor confidence. It also gives the government a far greater say in Citigroup's affairs, short of outright nationalisation.

"The government is the new boss," said Mike Holland, the founder of money manager Holland & Co in New York.

"Every major decision is something that is not going to come out of Park Avenue, but is going to come from Washington D.C."

Separately, Citigroup said it recorded more than $8.9 billion of charges in the
most recent quarter to write down goodwill and its Nikko Asset Management
business in Japan.

The charges boost the fourth-quarter loss to above $17 billion, and Citigroup's full-year loss to $27.7 billion.

"This capital should take confidence issues off the table even in a stressed environment," Pandit said in a conference call. In premarket trading, Citigroup shares were down 96 cents at $1.50.

Standard & Poor's 500 stock index futures fell 2.4 per cent after the US Commerce Department issued a revised estimate showing gross domestic product falling at an annualized 6.2 per cent in the fourth quarter, a much steeper drop than analysts expected. — Reuters

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RIL to consider merger with RPL
Shiv Kumar
Tribune News Service

Mumbai, February 27
A proposal to merge Reliance Petroleum Ltd (RPL) with Reliance Industries Ltd (RIL) will be considered by their respective boards on March 2, both companies said in filings to the stock exchanges.

RIL owns 70.83 per cent in RPL and another 5 per cent in the company is held by Chevron. According to RIL officials, the proposed merger would be effective retrospectively from April 1, 2001.

Following the merger of RPL with itself, RIL is likely to issue 34 crore additional equity shares worth Rs Rs 11,000 crore to the shareholders of the former.

The ratio of shares to be issued is likely to be pegged at between 17 and 24 RPL shares for one RIL share.

According to analysts, RIL shareholders are likely to benefit in a number of ways. RPL's assets have been pegged at nearly double the value at which RIL proposes to buy it out. However, no confirmation is available on this from the company.

Since the merger is likely to be with retrospective effect from April 1, 2001 when work on the new Jamnagar refinery commenced, losses incurred by RPL are likely to be taken into the books of RIL thereby allowing the parent company to offset profits against these losses.

RIL's profits are expected to surge by nearly Rs 1,500 crore in FY 10 when the new refinery commences operation. The company is also likely to save on tax incurred in selling oil to RPL.

The government seems to have blessed this merger with Petroleum Minister Murli Deora stating that the SEZ benefits due to RPL may be availed of by RIL.

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Govt approves development fee at Mumbai airport
Vibha Sharma
Tribune News Service

New Delhi, February 27
Air passengers should now get prepared to pay for using the Mumbai airport as well. The Centre on Friday approved the levy of development fee (DF) by Mumbai International Airport Ltd (MIAL) at the CSI Airport, Mumbai.

The DF for Mumbai will be Rs 100 for departing domestic passenger and Rs 600 for departing international passenger with effect from April 1.

The DF has been imposed purely on an ad hoc basis, for a period of 48 months and would be inclusive of all applicable taxes, officials said.

Passengers using the Indira Gandhi International Airport have already been paying DF to Delhi International Airport Limited (DIAL) since March 1.

While departing international passengers pay Rs 1300, the DF for domestic passenger is Rs 200 over and above their ticket costs.

Civil Aviation Minister Praful Patel had indicated that airport DF could become the norm of the day and may be imposed even at airports being modernised by state-owned Airports Authority of India.

Justifying the imposition of such fees, Patel said massive aviation infrastructure required in India could not be created on such a scale without contribution from passengers and other stakeholders.

Equating the development fees with toll taxes on roads and highways, the minister said the large scale in which infrastructure was required to be developed envisaged huge costs.

Which means that in times to come air passengers may have to pay DF while using AAI airports like Kolkata, Chennai, Goa, Ahmedabad and Thiruvananthapuram.

However, all issues would be looked into later by the Airport Economic Regulatory Authority, which was approved by Parliament and was likely to be set up soon.

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Power generation with sugar mills
Haryana seeks Rs 250-cr loan
Ruchika M. Khanna
Tribune News Service

Chandigarh, February 27
The Haryana government is seeking a loan of about Rs 250 crore from a Japan-based bank for starting co-generation of power in 10 cooperative sugar mills of the state.

The state government would bear 20-30 per cent of the total cost of the project. The state government has approached the Union Ministry of Economic Affairs to get the loan from an independent international agency.

A Japan-based bank has reportedly shown keen interest in offering a soft loan to the state government at two per cent rate of interest.

Talking to TNS here yesterday, financial commissioner, cooperatives, Manik Sonawane, said the total investment for starting co-generation of power in all 10 cooperative sugar mills in the state was around Rs 350 crore.

“The state government will fund 20-30 per cent of the total cost for starting co-generation. Other than the power to be used by the sugar mills, we propose to have 100 mega watts (MW) of exportable power, which will be sold to Haryana Vidyut Prasaran Nigam,” he said.

Sonawane said co-generation will start at two sugar mills at Shahabad and
Rohtak this year.

“We will start co-generation of 25 MW of exportable power in Rohtak by next month and in Shahabad (16 MW of exportable power) by November,” he said.

The financial commissioner said there was a sharp decline in sugarcane cultivation
in Haryana this year, but most of the projects for starting power co-generation
were on track.

The sugarcane production in the state is down by at least 40 per cent this year. It is learnt that the area under sugarcane has reduced from 1.40 lakh hectares last year to almost 90,000 hectares this year.

With the farmers getting better returns from wheat and paddy, sugarcane farmers have started shifting to these crops.

He, however, said the state government had increased the State Advised Price (SAP) of cane by Rs 35 per quintal this year and by another Rs 15 per quintal next year, so as to bring more area under cane production next year.

“This would help us start cogeneration in all the sugar mills," he said. He also said that incidental cogeneration was already being done by three mills at Gohana, Sonepat and Meham.

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Honda suspends work on 2nd plant
Tribune News Service

New Delhi, February 27
Hit hard by the slowdown in the auto market in the country, Honda Siel Cars India (HSCI) has decided to not only increase the prices of some its models but has also indefinitely put on hold opening of its Rs 1,000-crore second plant.

Talking to reporters here, HSCI president and CEO Masahiro Takedagawa said,
"We have not fixed any timeline for opening the second plant. It has been put on
hold indefinitely".

He also said the prices of some of the models, especially the CR-V might be increased by as much as 30 per cent as the devaluation of the rupee was impacting the import of the CKD kits for the vehicle. The increase for some of the other models might also follow but not to that level.

"Our Greater Noida facility has a production capacity of one lakh units, but this fiscal we expect to sell only about 55,000 units. After utilising the full capacity of this plant, we will start the second plant," he added.

Incidentally, the company has cut its production to 200 cars a day in a single shift since the beginning of this year from the earlier capacity of 400 units a day in two shifts. As a result, the company has also laid off almost 1,000 temporary workers.

"As we cut our production by half, so we have not renewed the contract of our temporary workers since August last year, but we have not let go our permanent staff," Takedagawa said.

In December 2008, HSCI had announced its plans to defer capacity expansion at its second Indian plant at Tapukara in Rajasthan in view of the current economic slowdown, which has also impacted the automobile industry. Initially, the plant was scheduled to start operations from the fourth quarter of 2009.

Takedagawa also said, "Devaluation of rupee is impacting our business, because a significant portion of our components are imported from Japan and Thailand. This impact is about 30-35 per cent in case of CR-V".

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BSNL launches 3G services in 11 cities
Tribune News Service

New Delhi, February 27
Even as the Department of Telecom (DoT) has been trying hard to tackle various issues facing the auction of the 3G spectrum space for private telecom operators in the country, the state-run operator BSNL today launched the third generation (3G) services in 11 cities around the country.

Following the initial launch, it also plans to expand services to other areas in the country. The launch from the BSNL came even as the country’s largest private telecom operator Bharti Airtel said the government should set a "reasonable" base price for the pending auction of third generation wireless spectrum to ensure a decent number of bids.

Launching the services, BSNL said in a statement that it had invested Rs 2,700 crore on rolling out 3G services and would cover all district headquarters and important commercial towns.

3G services give users a chance to enjoy fast Internet access, games and a host of multimedia content from maps to music on their cellphones.

Meanwhile, Bharti Airtel chairman Sunil Bharti Mittal told a TV news channel, "From my point of view, put a reasonable base price and then float the bidding. Don't make it too high".

"Most of the existing players would like 3G to come through... let the price be discovered in the market," he said.

DoT will hold an auction of 3G spectrum later this year, but state-run firms have already been given one slot in each service area, and will have to match the highest bid from private operators.

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Tata Steel Q3 profit dips 44 per cent

Mumbai, February 27
Tata Steel today said its consolidated net profit dipped by 44 per cent to Rs 732.21 crore in the October-December quarter, but held itself from slipping into negative terrain despite a slump in demand.

In the corresponding period of the last fiscal, the company had a net profit of Rs 1,311.76 crore.

The company's total income in the third quarter of the current fiscal increased to Rs 33,222.59 crore from Rs 32,074.34 crore, the company said. — PTI

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ONGC mulls IPO for Dahej plant

New Delhi, February 27
ONGC is planning an initial public offering of its subsidiary, which is building the Rs 12,440 crore petrochemical plant at Dahej in 2011, even as it agreed to give the state gas utility GAIL India a 19 per cent stake in the mega project.

The public sector major is considering selling up to 25 per cent of the equity shares in ONGC Petro-additions Ltd (OPaL), the special purpose vehicle formed for setting up the petrochemical complex at Dahej SEZ, a senior company official said.

"The IPO will happen at least one and half years from now when there is visible activity on ground," he said. — PTI

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