SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Bharti redials MTN for merger talks
New Delhi, May 25
Exactly a year after pulling out of talks for purchasing controlling stakes in telecom giant MTN over the "convoluted" new structure presented by the management of the South African company, Bharti Airtel has again started talks with it for acquiring 49 per cent shareholding.

A flag with the logo of US car maker General Motors flutters in front of the plant of car maker Opel on Monday in Bochum, western Germany.
A flag with the logo of US car maker General Motors flutters in front of the plant of car maker Opel on Monday in Bochum, western Germany. The German government said it aims to reach a decision by mid-week on which bidder it prefers for General Motors' Opel unit, as the clock ticks down to bankruptcy at the once-mighty US giant. — AFP photo

Pranab discusses contours of Budget
New Delhi, May 25
Finance Minister Pranab
Mukherjee today shared with
top officials his concerns over
matters afflicting nation's
finances immediately after
taking charge of the ministry
and said his top-most priority
is to bring the economy back
to high growth path.

ONGC to lose Rs 14k
cr in Cairn’s block

New Delhi, May 25
ONGC today said that it
would lose about Rs 14,000
crore if it was forced to continue in Cairn India's prolific Rajasthan oilfields as it would have to pay for all of the government levies.










EARLIER STORIES



A man delivers goods while riding a scooter past a neighborhood promotional billboard showing landmark scenes of Beiijng on Monday.
A man delivers goods while riding a scooter past a neighborhood promotional billboard showing landmark scenes of Beiijng on Monday. China is planning a stimulus package worth $440 billion to expand its renewable energy use, state media said on Monday, as it aims to rely more on cleaner ways to power its growth. — AFP photo

IPI Pipeline: Pak, Iran ink deal
Islamabad, May 25
Pakistan yesterday said India could join the multi-million Iran-Pakistan gas pipeline even at a later stage, as it sealed a deal with Tehran.

India still undecided

36 US banks go belly up this year
New York, May 25
There seems to be no respite for the American banking industry as 36 banks have collapsed so far this year.

RBI to auction state development loans today
Chandigarh, May 25
Four state governments have announced the sale of their 10-year state development loans for an aggregate amount of Rs 4,500 crore, through a yield-based auction using multiple price auction method.

 





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Bharti redials MTN for merger talks
Girja Shankar Kaura
Tribune News Service

New Delhi, May 25
Exactly a year after pulling out of talks for purchasing controlling stakes in telecom giant MTN over the "convoluted" new structure presented by the management of the South African company, Bharti Airtel has again started talks with it for acquiring 49 per cent shareholding.

The company spokesman said here today that Bharti Airtel has renewed its effort for a significant partnership with MTN Group Limited (MTN) and is exploring a potential transaction whereby, pursuant to a scheme of arrangement, Bharti would acquire a 49 per cent shareholding in MTN.

In turn, MTN and its shareholders would acquire an approximate 36 per cent economic interest in Bharti, of which 25 per cent would be held by MTN with the remainder held directly by MTN shareholders.

This will be the second time that Bharti, which earlier this month touched the 100-million mark in customers, would enter into exclusive talks with MTN.

The two have agreed to discuss the potential transaction exclusively with one another till July 31.

A Bharti-MTN tie-up will allow the Indian telecom operator access into many markets where the South African giant already has its footprint.

Incidentally, Singapore Telecommunications (SingTel), a major existing shareholder of Bharti, will continue to be a strategic partner and significant shareholder after the implementation of the potential transaction.

The talks were said to be in early stages as yet, but reports suggested that it could prove more fruitful this time with the MTN management looking for an early buyout.

On May 24 last year, Bharti had pulled out of talks with MTN after getting irked over the "convoluted" new structure presented by the management of the South African telecom company.

Bharti had been in exploratory talks with MTN over the possible buying of majority stake or merging of the two companies.

Over the new strategic alliance between the two emerging markets telecom giants, Sunil Bharti Mittal, CMD of Bharti, said, “We are delighted at the prospects of developing a partnership with MTN to create an emerging market telecom power house. Both companies would stand to gain significant benefits from sharing each other’s best practices, in addition to savings emanating from enhanced scale.”

“We see real power in the combination and we will work hard to unleash it for all our shareholders. This opportunity also represents a first-of-its-kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation,” he added.

The coming together of the two companies would have the potential of putting together a telecom entity which would be the fourth largest in the world after AT&T, China Mobile and Vodafone.

The broader strategic objective would be to achieve a full merger of MTN and Bharti as soon as it is practicable to create a leading emerging market telecom operator which would have combined revenues of over $20 billion and a combined customer base of over 200 million.

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Pranab discusses contours of Budget

New Delhi, May 25
Finance Minister Pranab Mukherjee today shared with top officials his concerns over matters afflicting nation's finances immediately after taking charge of the ministry and said his top-most priority is to bring the economy back to high growth path.

Sharing his thoughts about how he would like the economic process to be shaped, Mukherjee gave the officials directions, presumably on how he would want the Union Budget for 2009-10 to be prepared.

"Immediately after assuming charge, Mukherjee had a series of meetings with all senior officials of the ministry and reviewed the status of various programmes and issues relating to all departments of the ministry. Issues relating to the forthcoming Budget were discussed at the meetings," an official present during the meeting said.

Mukherjee, however, did not take any question on the economy or the issues relating to the Finance Ministry after his meeting with the officials.

Soon after he was given the charge of the ministry, which he was looking after even before the elections, Mukherjee had told reporters, "Indian economy is resilient, strong and we shall have to build up and come back to the growth track as early as possible. We will be able to, I hope, present the Budget in due time so that uncertainties can be avoided and time of spending can be renewed."

With the Cabinet already taking note of impending urgency to pass the Budget by July 31 so as to avert the need for yet another vote-on-account, the task for Mukherjee is cut out and he told his officials that there are fiscal concerns.

In such a scenario, the ministry sources indicated, that it would be difficult to come out with another stimulus package, as being demanded by the industry, to revive the economy, particularly in the backdrop of negative growth in industrial output and exports. — PTI

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ONGC to lose Rs 14k cr in Cairn’s block

New Delhi, May 25
ONGC today said that it would lose about Rs 14,000 crore if it was forced to continue in Cairn India's prolific Rajasthan oilfields as it would have to pay for all of the government levies.

The government has appointed ONGC as the licencee for Cairn's RJ-ON-09/1 block, making it liable to pay royalty to the state government and cess to the Centre on entire oil and gas production irrespective of whether it holds any stake in the field or not. As a consolation, the state-run firm was given a choice of taking 30 per cent stake once oil or gas was found.

ONGC took 30 per cent in Mangala, Bhagyam and Aishwariya fields in the block but it now wants to exit as the obligation to pay all the levies had made the project economically unviable, a top company official said.

"If crude oil is sold at $60 a barrel price, ONGC will have to pay $7.44 in cess (at the rate of Rs 2,500 per tonne), $36 in royalty (for its and Cairn's share) and $10.34 per barrel in profit petroleum, leaving $6.22. Out of this, ONGC will have to pay for operating and capital expenditure and sales tax on its 30 per cent share," he said.

At $70 a barrel sale price, the realisation after paying for cess, royalty and profit petroleum was just $5.78, he said.

"The project offers us negative return and over the life of the field we will end up losing Rs 14,000 crore."

The official said exiting the Rajasthan block would not end its woes as it would not be absolved from its obligation to pay government levies on the crude oil produced.

"We want the government to compensate us for the levies we will pay on behalf of Cairn," he said.

The government had promised to take care of statutory levies on oil and gas
production when it awarded blocks like RJ-ON-90/1 in Rajasthan more than a
decade ago. — PTI

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IPI Pipeline: Pak, Iran ink deal

India still undecided

New Delhi: India is still undecided on joining the ambitious IPI gas pipeline project despite Tehran and Islamabad inking a bilateral deal. "We have not pulled out of the project. We have certain concerns which need to be addressed before we can join the project," a senior Petroleum Ministry official said.

"We are committed to continue to dialogue (with Iran and Pakistan) on the pipeline project," Petroleum Secretary R S Pandey said without elaborating.

Another official said New Delhi had not yet closed pricing and transit issues with Iran and Pakistan and would not sign a pipeline agreement until its concerns safe passage of gas through Pakistan is addressed.

Islamabad, May 25
Pakistan yesterday said India could join the multi-million Iran-Pakistan gas pipeline even at a later stage, as it sealed a deal with Tehran.

President Asif Ali Zardari and his Iranian counterpart Mahmood Ahmadinejad signed an inter-governmental framework declaration to support within framework of their respective laws and regulations, the gas deal signed by the oil ministries of the respective countries.

The Foreign Ministry spokesman Abdul Basit said India had reservations over the gas pipeline but there is a provision that India can join it later.

The deal known as "peace pipeline" was signed on the sidelines of the current tripartite summit of Pakistan, Afghanistan and Iran on elimination of terrorism, drug and human trafficking, held here in Iran's capital Tehran yesterday.

The 2,100-km long pipeline is to transfer Iranian gas to Pakistan. It is predicted that some 1,100 km of pipelines would be laid in Iran’s territory and 1,000 km in Pakistan.

The project is to transfer some 750 million cubic feet of gas per day. Construction of the pipeline is to be completed in five years.

Pakistani, Iranian and Afghan President have also agreed on proper measures for the dignified return of the Afghan refugees in Pakistan and Iran, he said. Afghanistan President Hamid Karzai is also attending the summit.

Basit welcomed the outcome of the Tehran trilateral summit and said the meeting was agreed on mechanism for cooperation in the security, energy and rail links.

The spokesman said the 260-km part of the pipeline to Pakistan would be laid in around four years. He added that 23 million cubic feet gas would be provided daily for 25 years.

Basit said the agreement could be extended for five years with mutual understanding of the two countries.

An official statement said the Gas Sale Purchase Agreement (GSPA) was signed by the MD National Iranian Oil Company (NIOC) and MD Inter-state Gas System for export of Iranian Natural gas to Pakistan at the border of Iran - Pakistan for the purpose of domestic consumption in Pakistan.

The conference, hosted by President Mahmoud Ahmadinejad and attended by President Asif Ali Zardari and President Hamid Karzai, was successful and that its decisions will be implemented, Basit informed. — PTI

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36 US banks go belly up this year

New York, May 25
There seems to be no respite for the American banking industry as 36 banks have collapsed so far this year.

A total of 50 banks have gone belly up since the financial crisis turned worse in September 2008, following the bankruptcy of Lehman Brothers.

The latest names to find a place in the list of failed entities are Citizens National Bank, Macomb, and Strategic Capital Bank, Champaign.

Both were shut down by the authorities on Friday, a day after the nation witnessed one of the biggest bank failures in 2009 — the collapse of Florida-based BankUnited.

The number of bank collapses this year has been much higher than 25 such failures in 2008. This month alone, six entities have been closed down.

Three of them — America West Bank, Citizens Community Bank and Silverton Bank — were shut down on May 1.

According to the Federal Deposit Insurance Corporation (FDIC), which is often appointed as the receiver of failed banks, Citizens National Bank had assets of $437 million and deposits worth $400 million as on May 13.

As of the same date, Strategic Capital Bank's assets and deposits stood at $537 million and $471 million, respectively. — PTI

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RBI to auction state development loans today
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 25
Four state governments have announced the sale of their 10-year state development loans for an aggregate amount of Rs 4,500 crore, through a yield-based auction using multiple price auction method.

The auction will be conducted by the RBI at Mumbai tomorrow, and the results will be declared on the same day. On the block is Rs 1,500 crore each as notified amount by both Uttar Pradesh and Rajasthan, followed by Rs 1,000 crore by Andhra Pradesh and Rs 500 crore notified amount of Rajasthan.

The successful bidders will have to make the payments on May 27 itself at Mumbai and at the respective regional offices of RBI.

The government stocks will bear interest at the rates determined by RBI at the auctions. Interests will be paid on a half-yearly basis (on November 27, 2009 and May 27, 2010).

Last month, Punjab had auctioned its state development loan for Rs 143.05 crore. With Punjab all set to implement its Fifth Pay Commission recommendations next month, the state will again be raising funds for the purpose by auctioning its state development loan next month.

Haryana, too, had managed to raise Rs 1,500 crore through auction of its state development loan in February this year.

Official sources in the RBI informed TNS that these state development loans had
been auctioned by various state governments to raise money for their various
development activities.

Generally, it is banks that bid in the auction of these loans. All banks are supposed to invest a certain prescribed percentage of their funds in government securities.

Therefore, this investment in government stocks will be reckoned as an eligible investment in government securities by banks for the purpose of Statutory Liquidity Ratio (SLR). These stocks will also qualify for ready forward facility.

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BRIEFLY

PNB to open five overseas offices
New Delhi:
The country's second largest PSU lender, Punjab National Bank, on Monday said it is planning to open five overseas offices in the next few months. These include a branch each in Shanghai, Dubai, Norway, a subsidiary in Vancouver, Canada, and a joint venture in Bhutan, PNB general manager Ranjan Dhawan told reporters after announcing a tie-up with Moneygram for remittance business. — PTI

Wal-Mart defers Amritsar launch
New Delhi:
Wal-Mart Stores has defered the launch of its first cash-and-carry store in India, after riots in Punjab following an attack on a Sikh temple in the Austrian capital Vienna on Sunday. "We will come back with the rescheduled date shortly," Bharti Wal-Mart, the joint venture of the American retailer and India's Bharti Enterprises, said on Monday. — Reuters

Tanti family sells 4% Suzlon stake
Mumbai:
The Tanti family, promoters and majority shareholders of wind turbine- maker, Suzlon Energy, has sold about four per cent of its share in the company to fund the purchase of REpower stake from the Martifer Group. Pune-based Suzlon reported a sale of approximately 60 million shares, or about four per cent of the paid-up share capital of the company, a statement issued here said. — PTI

NTPC JV for setting up test lab
Mumbai:
State-run power utility NTPC Ltd on Monday said it has incorporated a new joint venture firm National High-Power Test Laboratory Pvt Ltd for setting up an on-line high-power test laboratory for short- circuit test facility in the country. The JV has been incorporated in association with NHPC, Power Grid Corp of India and Damodar Valley Corp (DVC), NTPC said. — PTI

HDIL to raise Rs 2,846 cr
Mumbai:
Housing Development Infrastructure Ltd (HDIL) on Monday said it would seek shareholders nod for raising $600 million (about Rs 2,846 crore) through issue of shares to qualified institutional buyers. Further, the company would also allot 2.60 crore warrants on preferential basis to Rakesh Kumar Wadhawan, executive chairman and promoter of the company for cash. — PTI

Jet Airways Q4 profit Rs 53 cr
Mumbai:
Jet Airways has clocked a net profit of Rs 53 crore in the fourth quarter of 2008-09. The private air carrier had posted a loss of Rs 221 crore in the year-ago period. For FY'09, the airline clocked a loss of Rs 402 crore, the airline said in a statement to the BSE today. Jet had recorded a loss of Rs 253 crore in the year-ago period. — PTI

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