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Industrial output skids to 2.3%
New Delhi, May 12
Weak health of the Indian industry is showing once again and has resulted in industrial production declining to nearly half to 2.3 per cent in March 2009, as compared to 5.5 per cent during the corresponding month in 2008.

10,000 jobs may face heat of Corus’ plant closure: Report
London, May 12
Nearly 10,000 jobs are under threat as Tata Steel's European arm Corus is mulling closing of one of its mills in England after a group of buyers terminated a contract to buy the unit's 80 per cent produce for 10 years.
“Not only did the consortium's decision spell the end for an estimated 3,000 steel workers in the area, but a further 7,000 jobs in the supply train are also threatened,” the Daily Mail newspaper reported in its online edition.

Daiichi in red due to Ranbaxy deal
Tokyo/New Delhi, May 12
Japanese drug maker Daiichi Sankyo today reported a loss of $3.45 billion during the financial year 2008-09, and said it was on account of a steep fall in share prices of Ranbaxy, which it acquired last year.



EARLIER STORIES




Chairman of the board of directors and CEO Lakshmi Mittal presides over a shareholders’ meeting of steel group ArcelorMittal in Luxembourg on Tuesday. —
Chairman of the board of directors and CEO Lakshmi Mittal presides over a shareholders’ meeting of steel group ArcelorMittal in Luxembourg on Tuesday. — Reuters

Tata Steel to prepay debt of Rs 1,500 cr for Corus
Mumbai, May 12
As part of efforts to de-leverage debt incurred by the company's European operations, Tata Steel will prepay more than £200 million (Rs 1,500 crore) of its non-recourse debt. The payment will be made by Tata Steel UK, a wholly-owned subsidiary of the company, a statement released here said.

Bulls strike back
Mumbai, May 12
Despite faltering IIP numbers, the Sensex surged 475 points in the latter part of the day to close at 12,158 points. After registering losses in the early part of the day, the Sensex bounced back from 11,625 to come within distance of 12,200 before slipping lower.

Millers, paddy growers up in arms against govt
Chandigarh, May 12
Rice millers and paddy growers are up in arms against the government for indirectly aiding the fall in prices of levy rice in the domestic market, and then exporting this to other countries by making a neat profit.

UTI MF to sell 26 pc stake
New Delhi, May 12
The country’s oldest fund house, UTI Asset Management Company (AMC), today said it would divest 26 per cent stake to a strategic partner by August this year. “It (process of stake sale) is on the track. We are awaiting clearance from the stakeholders,” UTI AMC chairman and managing director UK Sinha said.

BSNL petition on access deficit dismissed
New Delhi, May 12
Telecom tribunal TDSAT has dismissed Bharat Sanchar Nigam Ltd (BSNL's) all three petitions challenging the regulatory body Telecom regulatory Authority of India (TRAI) order removing the access deficit charge (ADC) for the private telecom companies.

RIL, Essar, IOC in race for Ratnagiri LNG terminal
New Delhi, May 12
Reliance Industries, Essar Oil and Indian Oil are among the six firms, which have expressed interest in taking on lease Ratnagiri LNG terminal adjacent to the Dabhol power plant, even as the commissioning of the import facility has been put off by six months to October.

Oil Cos to get Rs 10,300-cr bonds
New Delhi, May 12
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are likely to get Rs 10,300 crore worth of oil bonds this week to make up for the losses they incurred on selling fuel below cost last fiscal.

 





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Industrial output skids to 2.3%
Bhagyashree Pande
Tribune News Service

New Delhi, May 12
Weak health of the Indian industry is showing once again and has resulted in industrial production declining to nearly half to 2.3 per cent in March 2009, as compared to 5.5 per cent during the corresponding month in 2008.

Manufacturing industry, which comprises 80 per cent of the index, has been badly hit and has dipped to -3.3 per cent in March 2009 as against last year. The only sector that has seen activity and has kept the index going is consumption of consumer durables like washing machine, television and refrigerators recorded a growth of 8.3 per cent but consumer non-durables like soap, hair oil have registered a -3.6 per cent in March 2009 over corresponding month last year.

As regards fiscal year 2008-09, manufacturing sector growth decelerated to 2.3 per cent from 9 per cent in the previous fiscal.

Economists say growth target of 6.5 per cent looks dismal given that major sectors like steel, cement showing a degrowth, add to this construction numbers in the core sector are also not looking robust.

Industries manufacturing beverages, tobacco and related products have shown the highest growth of 15.1 per cent, followed by 8.3 per cent growth in basic chemicals and chemical products (except products of petroleum and coal), transport equipment and parts and related industry has grown by 7 per cent.

Harsh Pati Singhania, FICCI president, said the fall in the IIP showed that the economy was yet to get out of the slowdown mode. What is the reason of concern is that some of the basic and core industries such as metal products, basic metal and alloys have shown deep deceleration. This reflects a serious demand slowdown, sluggishness in investment activity and a continuous fall in exports, he added.

On the other hand, food products have shown degrowth of 35.8 per cent labour-intensive sector of textiles manufacturing have shown a slowdown of -10.3 per cent.

The mining sector grasped to keep above ground and grew by 0.4 per cent during March 2009 as compared to an increase of 4.9 per cent in March 2008.

Only power generation has risen by 6.3 per cent during the month, compared to 3.7 per cent during the corresponding period in 2008.

According to industry chamber ASSOCHAM, industrial production will continue to contract at least for another 2-3 months though signs of recovery have started discreetly surfacing but their results will be visible by June.

FICCI believes that a distinct break cannot come about without a spurt in investments and a radical improvement in the investment environment. For example, lending rates continue to remain fairly high and act as a disincentive for fresh investments and fructification of planned projects, Singhania said.

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10,000 jobs may face heat of Corus’ plant closure: Report

London, May 12
Nearly 10,000 jobs are under threat as Tata Steel's European arm Corus is mulling closing of one of its mills in England after a group of buyers terminated a contract to buy the unit's 80 per cent produce for 10 years.

“Not only did the consortium's decision spell the end for an estimated 3,000 steel workers in the area, but a further 7,000 jobs in the supply train are also threatened,” the Daily Mail newspaper reported in its online edition.

Corus spokesperson did not respond to an email query sent at the time of releasing the story.

However, a senior company official said direct and indirect job losses were imminent with closure of industrial operations.

As the consortium of buyers, comprising Italy-based Marcegaglia, Korean firm Dongkuk Steel and others like Duferco Participations and Alvory SA, has backtracked from the offtake deal, Corus is looking at legal options to avert the closure of its Teesside Cast Product unit in Northeastern England.

‘Microsoft may lay off more, if warranted’

MUMBAI: Software giant Microsoft, which has announced cutting 5,000 jobs including 55 in India, today said it might look at more layoffs if the economic downturn dramatically worsens again.

“Presuming the economy hopefully stays as bad as it is and doesn't get dramatically worse, we will finish our plan, but if it gets dramatically worse again, we will look at things again,” Microsoft Corporation CEO Steve Ballmer said.

In the second round of job cuts affected on May 5, the software major said it would lay off 3,000 employees. In January, Microsoft had laid off 1,350-1,400 people, largely in the US.

The Bill Gates-led firm said it would make strategic investments, which were best, suited to the current economic environment.

French workers asked to move to India or face sack

LONDON: Workers of a recession-hit textile company in south-west France have been asked to shift to India to work in its factory in Bangalore for a pittance or face a sack, a media report has said.

Nine employees at Carreman textiles plant in Castres, south-west France, were told that they could continue working for the firm only if they relocated to Bangalore and accepted a meager monthly salary of £48 per month, The Daily Telegraph said in a report.

Under the proposal, condemned as “scandalous” by unions, the workers would be required to have eight-hour days, six days a week — instead of the current five.

A representative of the workers union said the offer was tantamount to "dressing up a straight dismissal". — PTI

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Daiichi in red due to Ranbaxy deal

Tokyo/New Delhi, May 12
Japanese drug maker Daiichi Sankyo today reported a loss of $3.45 billion during the financial year 2008-09, and said it was on account of a steep fall in share prices of Ranbaxy, which it acquired last year.

The company said it has booked “extraordinary losses due to one-time write-down of goodwill” worth $3.59 billion on Ranbaxy shares, which have dipped more than two-thirds since the deal was signed in June last year.

Daiichi Sankyo, the third-largest drug maker in Japan, last year acquired controlling stake of around 64 per cent in Ranbaxy Laboratories for around Rs 22,000 crore.

“The group posted a net loss of 335.8 billion yen (compared with net income of $1 billion in the previous year) as the result of recording 351.3 billion yen in extraordinary losses due to one-time write-down of goodwill pertaining to the investment in Ranbaxy,” Daiichi Sankyo said.

However, the Japanese company said it expected to return to black in the current year and end the fiscal with a profit of $409 million.

The company's sales in India and its neighbouring region during FY'08-09 grew by 69.4 per cent at $450 million. Ranbaxy alone contributed $215 million in the overall sales of the company. — PTI 

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Tata Steel to prepay debt of Rs 1,500 cr for Corus
Tribune News Service

Mumbai, May 12
As part of efforts to de-leverage debt incurred by the company's European operations, Tata Steel will prepay more than £200 million (Rs 1,500 crore) of its non-recourse debt. The payment will be made by Tata Steel UK, a wholly-owned subsidiary of the company, a statement released here said.

The company said it had held meetings with financiers who had funded the company's purchase of Corus as part of the debt restructuring deal. Tata Steel said its UK subsidiary had met all its covenant obligations till date. The company has pre-paid all loans till December this year.

It is required to pay back $795 million to lenders during the last quarter of the current financial year and $1.3 billion in the next financial year. However Tata Steel says it is well funded to meet its debt requirements.

Tata Steel said its restructuring of operations would help it reduce costs and let it emerge stronger with improved profitability in the future. The company, however, warned that the company would have to struggle with short term fall in earnings over the next few quarters.

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Bulls strike back
Tribune News Service

Mumbai, May 12
Despite faltering IIP numbers, the Sensex surged 475 points in the latter part of the day to close at 12,158 points. After registering losses in the early part of the day, the Sensex bounced back from 11,625 to come within distance of 12,200 before slipping lower.

All the 30 stocks in the Sensex pack, except HUL, surged today. The biggest gainer was HDFC which shot up 7.7 per cent Rs 1,841. Other gainers included Wipro, ICICI Bank and Bharti Airtel which gained more than 6.2 per cent each. RIL was another player today closing 5.3 per cent higher.

However today's rally was not so widespread with the midcap and smallcap indices registering modest gains of 0.94 per cent and 1.32 per cent respectively.

Among sectoral indices, technology and banking stocks were the major gainers with the BSE IT index closing 5.2 per cent higher. Wipro, Infosys and Mphasis were the big gainers closing 5 per cent higher. The BSE bankex was up 4.8 per cent while the oil & gas index closed 3.9 per cent higher.

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Millers, paddy growers up in arms against govt
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 12
Rice millers and paddy growers are up in arms against the government for indirectly aiding the fall in prices of levy rice in the domestic market, and then exporting this to other countries by making a neat profit.

It is alleged that the private firms authorised by government agencies like State Trading Corporation (STC), MMTC and PEC are now buying non-basmati rice from open market at around $300 a tonne, but exporting this to countries like Ghana at the rate of $500 a tonne. So, while the paddy grower and rice millers continue to suffer losses, the government is making a profit of over 60 per cent on each tonne of non-basmati rice export.

It may be noted that the government had banned rice exports early last year to stave off shortages at home, but partially eased the curbs as output and government stocks grew. The government has now allowed exports of non-basmati rice, but only on government-to-government accounts.

However, over the past two months, the price of levy rice (non-basmati rice) has fallen from Rs 1,531 per quintal to Rs 1,150- Rs 1,200 per quintal. This fall in prices is a result of a decision taken by the central procurement agency, the Food Corporation of India, against any further lifting of levy rice as it has exhausted its storage capacity.

Since the millers are forced to dispose off their rice stocks at rates lower than the government prescribed rate, they have also stopped paying the minimum support price of Rs 930 per quintal to paddy farmers. These farmers, especially in the states of Madhya Pradesh, Chattisgarh and Andhra Pradesh, are being paid just Rs 750- Rs 800 per quintal for paddy by the rice millers.

“The Indian rice is of a better quality than the rice from Thailand and Vietnam, which have 25 per cent broken grains (brokens) and are selling at $400 a tonne. But Indian levy rice with just 16 per cent brokens is ready for export will not be more than $30 per quintal or $300 per tonne. By selling at $500 per quintal, the government is making a profit, albeit at the cost of paddy farmers and rice millers,” said a leading rice exporter from North India.

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UTI MF to sell 26 pc stake

New Delhi, May 12
The country’s oldest fund house, UTI Asset Management Company (AMC), today said it would divest 26 per cent stake to a strategic partner by August this year. “It (process of stake sale) is on the track. We are awaiting clearance from the stakeholders,” UTI AMC chairman and managing director UK Sinha said.

Sinha, who has been adjudged as the most influential asset manager in Asia by the Asian Investor, said it would be inappropriate to name shortlisted entities but it would be suffice to say there were three shortlisted parties.

UTI Mutual Fund is promoted by four sponsors - State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation - holding 25 per cent each.

The sponsors would divest a portion of their stake that would go to the strategic partner, he said, adding that post divestment, all four investors would dilute stake proportionately to allot 26 per cent to the strategic partner.

The decision to divest 26 per cent stake to the strategic partner comes a few months after UTI Asset Management Company deferred its initial public offering owing to uncertain market conditions. — PTI

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BSNL petition on access deficit dismissed
Tribune News Service

New Delhi, May 12
Telecom tribunal TDSAT has dismissed Bharat Sanchar Nigam Ltd (BSNL's) all three petitions challenging the regulatory body Telecom regulatory Authority of India (TRAI) order removing the access deficit charge (ADC) for the private telecom companies.

In line with its laid down road map, the TRAI had abolished the ADC with effect from April 1, 2008. ADC is the amount payable by private telecom operators to (BSNL) for sustaining their remote and rural wireline network.

Upholding the TRAI order, TDSAT said: “BSNL has no right for ADC and TRAI was right in calculating the depleting ADC regime.”

In its petition, BSNL has submitted that the withdrawal of ADC was reducing its revenue and it would be difficult to meet the expenses of unprofitable, below-cost fixed-line and mobile services in rural areas.

It had sought compensation in lieu of the abolishing of the ADC by which the private operators gained around Rs 800 crore. During the last fiscal, the total ADC accruing to BSNL would have been around Rs 2,000 crore, of which about Rs 1,100 crore would have come through its wireless services.

TRAI had also said the private operators must pass on the benefit accruing from the abolishing of the ADC to the consumers, especially in the rural and remote sectors.

TRAI had said although it was difficult to establish a direct and transparent nexus between the savings on account of ADC and reduction of tariff, yet it was expecting that the operators shall utilise whatever savings accrued from the process for the overall growth of the telecom sector, especially for rural areas that were still awaiting concrete steps from the operators.

While abolishing ADC, which was introduced in January 2003, TRAI had also recommended to the Department of Telecommunications that from April 1, 2008, the government should grant Rs 2,000 crore per annum to BSNL from the universal service obligation fund.

ADC had two components. One, the service providers paid 0.75 per cent of their adjusted gross revenue to BSNL and the second, international long distance service providers paid Re 1 per minute on international incoming calls to BSNL. 

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RIL, Essar, IOC in race for Ratnagiri LNG terminal

New Delhi, May 12
Reliance Industries, Essar Oil and Indian Oil are among the six firms, which have expressed interest in taking on lease Ratnagiri LNG terminal adjacent to the Dabhol power plant, even as the commissioning of the import facility has been put off by six months to October.

Besides, other companies interested in hiring the five -million-ton-a-year capacity liquefied natural gas (LNG) import facility on tolling basis include NTPC and GMR Group.

“We will decide on giving the LNG terminal on tolling basis in one or two months...maybe by July,” said AK Ahuja, managing director, Ratnagiri Gas and Power Pvt Ltd (RGPPL) - the company that operates the nation's biggest gas-fired power plant and the adjacent LNG import facility.

RGPPL does not need the terminal as the government has already allocated natural gas from RIL’s Bay of Bengal KG-D6 fields to fire the 2,150-MW power plant.

“Since there is no breakwater, only one million ton capacity will be available for leasing in 2009-10,” he said.

RGPPL would earn Rs 140 crore annually in tolling fee, which is likely to be around $0.60 per million British thermal unit of import fuel.

Dabhol would be India's third LNG terminal after Petronet LNG Ltd’s Dahej facility in Gujarat and Royal Dutch Shell’s Hazira plant, also in the same state.

RGPPL was set up as a joint venture led by state-run gas utility GAIL and power producer NTPC. — PTI

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Oil Cos to get Rs 10,300-cr bonds

New Delhi, May 12
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are likely to get Rs 10,300 crore worth of oil bonds this week to make up for the losses they incurred on selling fuel below cost last fiscal.

“We have arrived at final under-recovery (revenue loss) figures (for petrol, diesel, domestic LPG and kerosene sold in 2008-09). The Finance Ministry is likely to issue in a day or two oil bonds to make up for the uncovered portion of these,” a Petroleum Ministry official said.

IOC, BPCL and HPCL incurred revenue loss of Rs 1,03,292 crore on sale of auto and cooking fuels in 2008-09. Of this, Rs 32,000 crore was met by upstream firms like Oil and Natural Gas Corp by way of discount on crude oil they sell to the three firms. The government had previously given the three retailers about Rs 61,800 crore worth of oil bonds. — PTI

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BRIEFLY

Chawla, Brahma appointed secys
New Delhi:
Economic affairs secretary Ashok Chawla has been appointed as finance secretary in the Ministry of Finance with effect from today. The post of finance secretary fell vacant following retirement of Arun Ramanathan, who was also secretary of financial services. Chawla is a Gujarat cadre IAS officer of the 1973 batch. He has also worked as secretary in the Ministry of Civil Aviation. Meanwhile, H S Brahma today assumed charge as secretary in the Ministry of Power. He was earlier special secretary, National Disaster Management Authority, in the Ministry of Home Affairs, an official statement said today. — PTI

Oil above $60
LONDON:
Oil prices rose sharply on Tuesday with the New York contract hitting a six-month high above $60 as the US currency tumbled against other leading units, traders said. New York's main futures contract, light sweet crude for delivery in June, jumped to $60.08 per barrel before slipping back to $59.59 on yesterday's close. — AFP

Bajaj Allianz Life plan
MUMBAI
: Bajaj Allianz Life Insurance on Tuesday said it had launched a ULIP plan offering a balance of protection and investment. “UnitGain Protection Plus will give more benefits if one remains invested with us for a longer term by way of higher allocation on renewal premium and guaranteed additions,” Bajaj Allianz Life CEO said. — PTI

KEC Intl bags Rs 111-cr orders
MUMBAI
: Power equipment maker KEC International on Tuesday said it had bagged three orders worth Rs 111 crore from different companies for power transmission related works. KEC has bagged three orders totalling Rs 111 crore in West Asia and Australia, besides India, it said. — PTI

Re regains 20 paise
MUMBAI
: Positive cues from local equity markets helped the Indian rupee to recover by 20 paise to close at 49.30/31 against the dollar, breaking two session of decline. A weak dollar overseas against its major rivals also boosted rupee sentiment. — PTI

Consolidated Construction
MUMBAI:
Real estate developer Consolidated Construction Consortium on Tuesday said it had bagged orders worth Rs 306.74 crore to date in 2009-10, from different vendors for various construction-related activities. The company said it had received orders worth Rs 306.74 crore to date during this financial year. — PTI

Atlas Jewellery Group
KOCHI
: The Gulf-based NRK Atlas Jewellery Group is foraying into real estate sector and plans to invest about Rs 1,000 crore in Kerala in the next two to three years. The group has planned three projects — two in Kochi and one in Kozhikode. — PTI

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