SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

ONGC wants to exit Cairn's Rajasthan oilfields
New Delhi, May 7
Oil and Natural Gas Corporation (ONGC) wants to exit Cairn India's prolific Rajasthan oilfields as it has found the project economically unviable due to the government levies that it will have to bear.

Adlabs enters media outsourcing business
New Delhi, May 7
Anil Ambani-promoted Adlabs Films today said it was looking at tapping the $400-million market for digital content restoration through its new media BPO venture and is planning to foray into North America and Europe among others.

Obama’s Strictures
Indian cos need not worry: Wipro
Bangalore, May 7
Wipro chairman Azim Premji today said US President Barack Obama’s tax reform proposals were not “as serious an issue as media was making it out to be”.




EARLIER STORIES



A shopper smiles as she stands in front of a display featuring the computer game character Pokemon, at a shop in Tokyo on Thursday.
A shopper smiles as she stands in front of a display featuring the computer game character Pokemon, at a shop in Tokyo on Thursday. Nintendo bucked the economic gloom with record profits for the year to March, saying the video game industry was proving to be relatively recession-proof. — AFP photo

Japanese auto giant Toyota unveils its new convertible coupe 'Lexus IS 250C', equipped with a 2.5-litre V6 engine on Thursday.
Japanese auto giant Toyota unveils its new convertible coupe 'Lexus IS 250C', equipped with a 2.5-litre V6 engine on Thursday. The IS 250C has a lightweight aluminum alloy top, enabling the roof to be opened or closed in 20 seconds. Toyota will start exporting this model abroad this month. — AFP photo

General Motors posts $10-b loss
Detroit, May 7
General Motors Corp said it had burned through $10.2 billion in the first quarter, operating under a federal bailout, as auto sales fell across the globe and it scrambled to cut costs.

Eyes stake in Fiat
New York, May 7
Beleaguered General Motors is looking for stake in Italian car maker Fiat in exchange for the auto giant's Latin American and European operations, says a media report.

JLR’s fate uncertain
Talks with govt close to collapse
London, May 7
The fate of Indian conglomerate Tata group-owned Jaguar Land Rover (JLR) is uncertain as talks with the UK government over a financial support package has virtually failed, media reports say.

Recession hits M’rashtra
revenue collection

Mumbai, May 7
In one of the first signs that the slowdown
in the economy has begun to hit home in
India, the Maharashtra state government
has informed that its revenue collection for
2008-09 has missed the target by a huge
amount of Rs 2,000 crore.

Jet launches no-frills service
Mumbai, May 7
In a bid to cash in on summer vacation rush,
Jet Airways will launch new no-frills service
— Jet Airways Konnect, from tomorrow and
will provide 10-15 per cent cheaper airfare
on the service.

Tarun Katial Big 92.7 FM to expand reach in rural areas
Chandigarh, May 7
The global economic slowdown may have stalled overseas expansion plans for Big 92.7 FM, but the private radio channel will widen its base in the country’s hinterland.                                                         
Tarun Katial

 





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ONGC wants to exit Cairn's Rajasthan oilfields

New Delhi, May 7
Oil and Natural Gas Corporation (ONGC) wants to exit Cairn India's prolific Rajasthan oilfields as it has found the project economically unviable due to the government levies that it will have to bear.

As per licence conditions for the Rajasthan block, ONGC has the right to take 30 per cent in any discovery without any cost but the state-run firm has to pay not only its share of royalty but also the 70 per cent share of the operator.

ONGC last month wrote to the Petroleum Ministry saying it wants to "relinquish" its 30 per cent interest in the block RJ-ON-90/1 unless the government reimburses the royalty it has to pay on behalf of Cairn, a senior company official said.

"Royalty of 20 per cent has to be paid to the government on the price Rajasthan crude may get. At $40 a barrel, the royalty for 6 million tons a year of average output works out to $352 million (Rs 1,760 crore)," he said.

ONGC has to bear 30 per cent of the $2.4 billion cost of developing the fields and pay more than three times its share of $105 million royalty.

Also Cairn wants ONGC to pay even its share of Rs 2,500 per tonne cess levied on crude oil (Rs 1,500 crore annually).

"The project with these levies does not make economic sense to us," he said, adding ONGC wants Cairn to reimburse all the investment it has put in with a reasonable rate of return.

If the company relinquishes its share, Cairn's shareholding will rise from 70 per cent to 100 per cent.

The board of ONGC has held back clearance to the revised development cost of the Rajasthan fields proposed by Cairn, the official said.

"Our board wants more information from Cairn on doubling development cost to $2.4 billion," he said, adding that this cost was excluding the $900 million cost for laying a pipeline from Barmer district in Rajasthan to the Gujarat coast for transporting the crude to users.

A Group of Ministers and a Committee of Secretaries had 11 years ago recommended that ONGC should be reimbursed the royalty it has to bear for the operator but the recommendation is yet to be accepted.

"We have told them (the government) that either reimburse us the royalty or free us from the field," he said. On cess, ONGC feels both partners have to bear it in proportion to their shareholding.

Its stand has been backed by the Law Ministry as well as by the Petroleum Ministry but Cairn insists that it has no liability for paying any of these statutory levies.

"If ONGC is to bear the cess, we will have to pay an additional Rs 1,500 crore per annum," the official said.

Cairn is almost ready to start producing crude oil from the Rajasthan field. The output may start by this month end and is slated to reach a peak of 8.75 million tonnes by 2011. — PTI

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Adlabs enters media outsourcing business

New Delhi, May 7
Anil Ambani-promoted Adlabs Films today said it was looking at tapping the $400-million market for digital content restoration through its new media BPO venture and is planning to foray into North America and Europe among others.

"With new platforms like mobiles, online and HD, the demand for content restoration has picked up... Major portion of the demand is coming from North America, Europe, the Middle East and South East Asia," Adlabs Films CEO Anil Arjun told PTI.

The 300-employee BPO division, which became operational four months ago and will add another 900 employees this year, is looking at major opportunities in North America and Europe.

Digital content restoration refers to digitisation of analogue content and archiving.

A majority of the projects for the company would come from these overseas
markets, he added.

Arjun, however, declined to comment on the investments planned or revenue
targets. — PTI

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Obama’s Strictures
Indian cos need not worry: Wipro
Shubhadeep Choudhury
Tribune News Service

Bangalore, May 7
Wipro chairman Azim Premji today said US President Barack Obama’s tax reform proposals were not “as serious an issue as media was making it out to be”.

Talking to reporters here on the sidelines of the inauguration ceremony of Wipro’s state-of-the-art laboratory for testing and certification of various products, Premji, however, added that Obama’s latest statement against outsourcing by US companies was not in conformity with the position taken by the USA in the G-20 summit in London last month.

“The tax reform policy requires a lot of judgment and I hope the US President will do so”, Premji said.

Girish Paranjpe, joint CEO and member of the Wipro board of directors, said since the US tax laws were not applicable in India, the Indian companies need not worry too much about fallout of the policies proposed by Obama.

Asked about the exact nature of the reform envisaged by Obama — whether the US President was talking about taxing offshore investments made by the US companies or he wanted to abolish the tax rebate given to US companies in the US on their foreign earnings — Paranjpe said the picture was still not clear.

“US tax laws are very complex”, he said. Paranjpe said the panic that had gripped the industry in the wake of Obama’s statement on Monday was abating as it was gradually emerging that the proposed reforms were directed at American companies.

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General Motors posts $10-b loss

Detroit, May 7
General Motors Corp said it had burned through $10.2 billion in the first quarter, operating under a federal bailout, as auto sales fell across the globe and it scrambled to cut costs.

The automaker on Thursday posted a quarterly net loss of $6 billion, compared with a loss of $3.3 billion a year earlier.

Revenue dropped by almost half to $22.4 billion as sales plunged in North America and fell in Europe, Asia and Latin America.

Excluding $73 million of one-time net charges, GM posted a loss of $9.66 per share. That was within the wide range of analysts' expectations but narrower than the average forecast of a loss per share of $11.05 as tracked by Reuters Estimates.

GM is facing a government-imposed June 1 deadline to reach agreements to overhaul its operations and cut more than $40 billion in debt.

The company has taken $15.4 billion in emergency loans from the US Treasury to
date. — Reuters

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Eyes stake in Fiat

New York, May 7
Beleaguered General Motors is looking for stake in Italian car maker Fiat in exchange for the auto giant's Latin American and European operations, says a media report.

"Four years after paying $2 billion to extricate itself from a partnership with Fiat, General Motors is seeking a stake in the Italian automaker in exchange for its Latin American and European operations," The New York Times has reported.

The daily said GM is eager to cede control of its money-losing Opel unit in Germany.

"But Fiat has also expressed interest in GM's other European operations as well as its historically profitable Latin American business, though the possible terms of such a deal have not been discussed publicly," the report published online noted.

According to the publication, despite the precarious financial situation, GM now feels it has a bargaining chip with its Latin American unit, and is negotiating with Fiat over what it might get in return.

Fiat's chief executive Sergio Marchionne has indicated a willingness to give up less than 10 per cent of Fiat to GM, it added.

"But GM executives are holding out for at least 30 per cent of the Fiat Auto Group," the daily said quoting two people close to the negotiations.

Further, attributing to the two people, the New York Times said they were not authorised to comment publicly because the discussions are fluid. — PTI

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JLR’s fate uncertain
Talks with govt close to collapse

London, May 7
The fate of Indian conglomerate Tata group-owned Jaguar Land Rover (JLR) is uncertain as talks with the UK government over a financial support package has virtually failed, media reports say.

"The future of Jaguar Land Rover, the largest UK-based car maker, is under threat as talks with the government about a financial support package were on the brink of collapse last night," according to the Telegraph.

Meanwhile, another daily the Financial Times (FT) said, "The government was last night accused of trying covertly to nationalise Jaguar Land Rover after it emerged that ministers had demanded the right to choose a chairman and veto redundancies at the troubled carmaker during bailout negotiations."

FT further said that "the demands, which were part of a deal under which Jaguar would have received £175 million in government loan guarantees, were rejected by the group's Indian owner, Tata".

Quoting Howard Wheeldon, an analyst at BGC Partners, FT said the proposals were "backdoor nationalisation", while the Telegraph carried Wheeldon as saying: "This latest government failure to support the future of the UK economy is an absolute disgrace — tantamount to throwing the best of the highly valuable British luxury car industry and export potential into a den of wolves." — PTI

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Recession hits M’rashtra revenue collection
Tribune News Service

Mumbai, May 7
In one of the first signs that the slowdown in the economy has begun to hit home in India, the Maharashtra state government has informed that its revenue collection for 2008-09 has missed the target by a huge amount of Rs 2,000 crore.

Much of this drop, state government officials say, has been due to the virtual halt in real estate transactions through most of the last financial year.

"Drop in stamp duty collection and registration charges accounts for deficit of as Rs 1,600 crore," says Finance Secretary Vidyadhar Kanade.

The state government had a revenue target of Rs 85,000 crore in the last financial
year. The state government had set a target of Rs 9,600 crore by way of stamp
duty collection.

However, in 2007-08 when the markets were undergoing a boom, the Maharashtra government actually exceeded its stamp duty and registration fee collection target by more than Rs 600 crore.

Overall, the Maharashtra government has indicated that revenue collected in 2008- 09 actually increased over the previous year despite falling short of the target.

Actual collection amounted to Rs 82,869 crore in FY 09 as against Rs Rs 79,958 crore in the year before.

However, the state government's finances are in a mess as its expenditure has increased far higher than expected.

Pay hikes for state government employees has inflicted additional burden of Rs 700 crore per month on the exchequer while another Rs 6,208 crore would have to be borne under the debt waiver scheme for farmers in the state, according to a presentation made by the Maharashtra government.

Maharashtra, which goes to the polls later this year, will have a full budget next month after the Union budget is presented by the new government.

Maharashtra's finance minister Dilip Walse-Patil indicated a host of populist schemes would be on the anvil as the ruling coalition struggles to hold power in Maharashtra.

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Jet launches no-frills service

Mumbai, May 7
In a bid to cash in on summer vacation rush, Jet Airways will launch new no-frills service — Jet Airways Konnect, from tomorrow and will provide 10-15 per cent cheaper airfare on the service.

"We are beginning operations of Jet Airways Konnect, our new all-economy, no-frills service, from tomorrow. The airfare will be 10-15 per cent lower on the new service compared to fares charged for our economy class," Jet Airways chief commercial officer Sudhir Raghavan told reporters here.

"There will be 58 flights on a daily basis across 19 routes," he said. The airline will connect Mumbai with Bhopal, Udaipur and Ahmedabad, Chennai with Coimbatore, Madurai and Kochi and Bangalore with Pune and Mangalore. — PTI

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Big 92.7 FM to expand reach in rural areas
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 7
The global economic slowdown may have stalled overseas expansion plans for Big 92.7 FM, but the private radio channel will widen its base in the country’s hinterland.

The FM service, a part of Reliance ADAG’s Big Entertainment, now proposes to expand its listener as well as advertiser base in the tier-II and tier-III cities.

Talking to TNS here today, Tarun Katial, chief operating officer (COO) of Big 92.7 FM, said as a strategy for growth, they are not only changing the content of their programmes to suit the sensibilities of people in the semi-urban and rural areas, but are also tapping advertisers who would like to reach out to the rural consumers.

Katial said while the recession had started showing in the urban areas, thanks to good agricultural production, the rural economy was still buoyant.

“Thus, we are focusing on reaching out to rural listeners. Though we have not been allotted any new frequency, our current frequencies allow us to cover large parts of rural areas around the 45 cities that Big 92.7 FM has a radio station,” he said.

He said though last year was one of the best years for the FM radio channel in terms of revenue generation, this year would be a year of transformation.

“We will be evenly focusing on all segments of listeners and building advertiser base other than the advertisers in metro cities,” he said.

“We are tapping seed manufacturers, farm equipment manufacturers, fast-moving consumer durables manufacturers and local traders in each city, who have customers in semi-urban and rural areas. In terms of content, we are trying to include weather updates and news related to agriculture for rural listeners, besides changing the dialect to regional languages so as to shed our image of being too city centric,” he added.

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BRIEFLY


This file photo shows Barclays Bank building in London.
This file photo shows Barclays Bank building in London. Barclays said on Thursday its net profit rose 12 per cent in first quarter to £826 million, boosted by part-purchase of failed US investment giant Lehman Brothers. — AFP photo

ECB cuts key rate to 1%
London:
Slashing the key rates for the seventh time in as many months, the European Central Bank (ECB) on Thursday reduced the interest rate by 0.25 per cent to 1 per cent. The ECB, which sets the rates for the 16 nations sharing the euro currency, is exploring ways to cope with the global financial crisis, which has pushed many European countries deep into recession. — PTI

DLF buys back 76.4 cr shares
New Delhi:
Realty major DLF on Thursday said it has bought back about 76.4 lakh shares, less than one per cent of the company's total outstanding shares, as part of an offer launched seven months back to arrest the slide in share price. Interestingly, the shares purchased during the buyback period, which started on October 17 last year and ended on Wednesday, accounts for just 12.79 per cent of what the company intended to buy. — PTI

Max New York’s ‘Smart Xpress’
Chandigarh:
Max New York Life Insurance has announced the launch of a unit-linked insurance plan called “Smart Xpress”. The product assures a guaranteed return on NAV, as the money would be invested mainly in government securities, which are risk- free. The policy holders will also have the option of switching over from government treasury bills to equity market. — TNS

Re recovers 35 paise
Mumbai:
The Indian rupee recovered Wednesday’s losses and was up by 35 paise to close at a two and a half month high of 49.26/27 against the dollar in line with a smart rebound in local equity markets amid sustained capital inflows. — PTI

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