Carrier Corporation offers to buy out Indian subsidiary
New Delhi: Carrier Corporation of the US has offered to purchase the 49 percent stake in its Indian subsidiary Carrier Aircon India at a price of Rs 100.
The company has submitted an application to the stock exchanges in India, informing them about the decision to buy back the shares and seeking their approval for the same. Carrier Corporation has a 51 per cent stake in Carrier India.
Carrier Corporation subsidiaries are unlisted companies all over the world.
The parent organisation, Carrier Corporation is also unlisted however, United Technologies, which owns Carrier Corporation, is a listed company.
The takeover is probably due to the fact that the US parent sees India as a big potential market and, therefore wants to offer all kinds of support by way of technology as well as product range to ramp up its share in the Indian market.
It has been often seen that unless multinationals have decisive control over their subsidiaries, they shy away from investing in processes, technology and products. Prime examples in the segment are LG, Samsung and Sony.
The Carrier Aircon scrip price, which was hovering around Rs 68, went up to Rs 73.80 at the stock exchanges on Monday following the announcement.
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Escorts announces new initiatives
New Delhi: The Rs 2,500-crore Escorts Group, is completely revamping itself. While exiting from its low margin manufacturing businesses of yore it is now going full steam ahead into businesses like cellular, IT and healthcare.

Not only is the company expanding its cellular operations—it has added four new category B circles to Escotel—it is pumping Rs 195 crore into the expansion of healthcare services and entering into a slew of international collaborations in IT.

For instance the group is exiting the two-wheeler business where, it says, the investments required to recover falling marketshare are prohibitive.It is also exiting from its joint venture with Mahle of Germany in the auto ancillary business, and plans to eventually move out of its joint venture with JC Bramford Excavators of the UK for the manufacture of earthmoving equipment.

Escorts already sold off 24 per cent stake to Yamaha last year. While refusing to quote a price outright for selling the remaining 26 per cent stake, Nanda said he did not expect a high valuation from the second tranche of disinvestment as the joint venture was not doing well.
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Zydus Cadila invests in US start-up
Mumbai: Zydus Cadila Healthcare, the Ahmedabad-based pharmaceuticals company has picked up a small stake of 16 per cent in US-based biopharmaceutical start-up Onconova Therapeutics for $3 million (about Rs 14 crore).
The two companies intend to jointly undertake research in the application of genomics to the study of cancer, Cadila said.

Zydus managing director Pankaj Patel has joined the board of directors of Onconova Therapeutics.
Onconova, a research start-up, is currently developing a new compound called Novonex in the area of anti-cancer or oncology, Cadila said. Onconova will soon initiate clinical trials in the US to determine the safety and efficacy of the compound with a fund infusion from Cadila.
Onconova is founded by NRI scientist E Premkumar Reddy and his associates. Reddy, who is from Hyderabad, is a director of the FELS Institute for Cancer Research and Molecular Biology of the Temple University in Philadelphia and is well-respected in the scientific circle.

With this tieup, Cadila's research efforts could get a leg up as Onconova, according to Cadila, is developing several anti-cancer drugs and novel anti-inflammatory compounds in a class of drugs called Cox 2 inhibitors using genomics.
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Brightstar increases offer price for VST to Rs 118
New Delhi: The fight for VST Industries is now in right earnest. The Dalmia company Brightstar Investments has hiked its offer price by Rs 6 to Rs 118 per share in the open offer for VST Industries even as it continues to bid for 20 per cent additional stake in VST.
This offer is six rupees higher than the original Rs 112 per share offer, and rupees three per share more than the ongoing Rs 115 counter offer by ITC subsidiary Russell Credit.
Brightstar's offer was originally slated to open last month, but had been stalled with Sebi due to the alleged involvement of R S Damani in the recent stockmarket crash.
Also, the ITC subsidiary is in the fray for acquiring 20 per cent stake in VST; London-based British American Tobbaco is the single largest shareholder in both ITC and VST.
If Russel Credit succeeds in picking up 20 per cent stake in VST, BAT will automatically assume control of VST, since the British major already holds 32 per cent stake in the latter.
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Schein Pharma may sell holding in Dr Reddy’s
Hyderabad: Schein Pharmaceuticals, the US-based pharmaceutical company whith headquarters in Florham Park, New Jersey, may sell its 1.89 per cent holding in Dr Reddy’s Labs, following the termination of the strategic alliance agreement with the group.

Schein entered into a strategic alliance with a group company of Dr Reddy’s — Cheminor Drugs — in February 1998, which eventually got merged with Dr Reddy’s in May last year.
The agreement between the two companies was aimed at integrating their formulations operations. Integration was also aimed at product development, synthesis, active pharmaceutical ingredients manufacturing, marketing, sales and distribution.
Now market sources say that Schein Pharma may offload its holding in Dr Reddy’s. It presently holds about 7,20,000 equity shares in Dr Reddy’s. "Schein would make an offer to Dr Reddy’s before offloading the companys’ shares in the market," sources said. Schein’s holding in Dr Reddy’s has come down from 2.3 per cent to 1.89 per cent after the company’s US $ 1.75 million ADS issue.
Schein would also transfer to Dr Reddy’s the ANDAs (abbreviated new drug applications) for two of the products covered by the agreement.
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Indian film producers to get breather
Mumbai: The Reserve Bank of India says that banks can now finance films with a total production cost of less than Rs 10 crore. They can extend loans up to a maximum of 50 per cent of the cost.

This means that effectively, at any point of time, a bank cannot give more than Rs 5 crore for financing a single film. The central bank, however, has allowed both corporate and non-corporate entities in the business to avail institutional funding.
The RBI norms stipulate that the producer will be required to bring in 25 per cent of the project cost as promoters’ contribution and tie-up another 35-40 per cent in the form of advances from distributors.

The bank advance, thus, could be for the balance 35-40 per cent of the project cost. However, at the same time, the regulator has stipulated that banks may disburse loans only after the promoter chips in its contribution in the project.
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OM Kotak insurance comes up with default plan
Mumbai: A unique feature of life insurance policy of OM Kotak Life Insurance Co is its ‘default protection plan. This plans entails that after the first three years, the company will draw from the insured’s accumulated savings to keep the life cover alive even if the insured fails to pay his premium on time.
The insurance plans will be rolled out in Mumbai this week, followed by Delhi and Bangalore in June and Calcutta and Pune in July. The company has currently 150 licensed agents.
O M Kotak will be starting out with three schemes — an endowment insurance plan, a money back policy and a single premium policy. The money-back policy offers a higher assured return for death benefits.
Besides, both the plans offer additional term insurance cover and double benefit for accidental death.
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Now the Aussies come to insure Indians with AMP
Sydney: Australian insurance giant AMP, has tied up with the Chennai-based Sanmar Group to offer its services in India.
The Indo-Australian partnership company would be known as AMP Sanmar Assurance Company. AMP will hold a 26 per cent stake in the joint venture company, which is the maximum allowed by Indian regulation.
AMP has also declared that it has left options open to increase the stake in ASAL "as and when local regulations permit."
Both partners expect to invest a total of approximately Australian $60 million over five years. The majority of this investment would be focused at starting the joint venture and to meet the Indian regulatory requirements.
The Sanmar Group has a significant presence in southern Indian states. It has business ties with multinational corporations like Emerson Electric, FMC, Tyco, Cabot, Bayer and Totalfina Elf Chemicals.
The Australian insurance company has also established a partnership with Japanese company NEC for spreading its wings in the Japanese retail financial market. NEC, which is basically an electronic company, plans to take a 10 per cent equity interest in AMP’s Japanese subsidiary, AMP Japan KK.
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Reliance may get stake in IPCL’s Gandhar, Nagothane units
Mumbai: Reliance (RIL) is understood to be in the process of finalising a deal for the purchase of Indian Petrochemicals’ (IPCL) Gandhar and Nagothane plants.
This follows the decision of the government to sell 25 per cent of its 59.96 per cent stake in IPCL.

Merchant bankers say a due diligence is on from both the sides to arrive at a final valuation.
IPCL and RIL maintained a silence on the issue except to say that the decision has to be taken by the center.
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Mercedes-Benz India targets sale of 1,500 C-Class units in 2001
New Delhi: Mercedes -Benz India Ltd (MBIL) has set itself a sales target of 1,500 cars C class units with turnover expected to touch Rs 380 crore in calendar year 2001against Rs 240 crore in the previous year said MBIL managing director and chief executive officer (CEO) Jurgen Ziegler after the launch of C-Class model here on Monday.
By the fourth quarter of the year MBIL will start introducing new models as part of its CBU programme.

In order to achieve over 60 per cent growth in sales this year, the German auto giant is also planning to import M-Class, CLK, SLK and S-Class (with higher engine lineup) in the near future. MBIL sold 800 units last year. The company is also looking at the range from the Chrysler side — Jeep Cherokee and Voyager — which may be launched at the beginning of next year. The company targets to sell 800 units of the new model, 500 of the E-Class, 100 units of the S-Class and the balance will be CBUs. "We have invested Rs 600 crore in the country so far. Nevertheless, we will import other variants on a limited basis for the niche segment only," Mr Ziegler said.
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Baron may hawk TCL phones soon
Mumbai: After TV sets Baron International Ltd might also sell the TCL brand of telephone sets in India in the next six months through TCL-Baron India Ltd — the 51:49 joint venture with the Chinese white and brown goods major, TCL Holdings Co Ltd.
According to TCL-Baron chief executive officer Sanjay Chemnani, "We should be able to start selling TCL phones in the next six months."
TCL-Baron had committed itself to bringing the entire portfolio of TCL’s products including phones, both mobile and fixed, to India, though mobiles phones seem to be out of the company’s favour at the moment.
TCL-Baron managed to sell only 12,000 of the 1,50,000 units (TCL handsets) envisaged for the year ended March 2001. Company officials said that once the duty rate is slashed from the current 27 per cent to 5 per cent, TCL baron will be among the most aggressive players in the market.
TCL-Baron was formed last year to market TCL branded colour televisions and mobile phones. Since then the company is engaged in the marketing and distribution of 3,50,000 sets of TCL CTVs priced at Rs 10,500. TCL mobile phones are available in the range of Rs 4,000 to Rs 7,000. So far, the company has sold 1,30,000 TCL CTVs targeted at the low-end of the market. Meanwhile, TCL-Baron India has entered into a second agreement to set up its own manufacturing base in India and also to foray into the Indian white and brown goods segment with TCL air conditioners, refrigerators and washing machines. An MoU in this regard, worth $20 million, was signed today.
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New lifestyle drug from Wockhardt
Mumbai: The Mumbai-based Wockhardt has launched a unique new-generation fitness formula, Winofit, through its pharma division.
Winofit, which comes in softgel capsules, is said to help reduce the negative impact of stress created by the pace of modern lifestyle. Stress according to the company manifests into a number of diseases and disorders such as atherosclerosis, diabetes, arthritis, cancer including acceleration of ageing.
The product priced at Rs 45 per 10 capsules, is marketed through a field force of over 400 personnel in the Wockhardt pharma unit. Winofit combines the goodness of omega fatty acids with antioxidant vitamins and micronutrient minerals and is prescribed as a dietary supplement.
According to the Wockhardt chairman, Mr Habil F Khorakiwala, "The overall market potential is huge, at Rs. 833 crore, when we consider the relevant market tapping beyond anti-oxidants.
Besides, the formulation in Winofit provides benefits in maintenance of fitness as well as in preventing or ameliorating age related diseases. Each ingredient has specific benefits and these are very well proven and established, sources said. Winofit is being deatiled to consulting physicians, general practitioners and other specialists in the country.
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IDBI withdraws loans to Essar Power
Mumbai: Essar Power Ltd is in trouble again this time with the Industrial Development Bank of India, which has recalled its loans to the former.

Earlier, ICICI had also issued a letter stating its intention of withdrawing loans to the power company, but withdrew the letter afterwards.

IDBI however seems to be serious and is demanding payment of outstanding dues. Essar has paid Rs 32 crore out of IDBI’s demand for Rs 40 crore as interest overdues and the company is negotiating with the bank to withdraw the recall notice.

Sources in IDBI say that despite earning net profits during the last four years, Essar had defaulted in its repayments and its track record had been "unsatisfactory."

IDBI also claims that the company does not appear to be "sincere" in clearing the overdues and pursuing the restructuring proposal it had submitted sometime back.

Essar meanwhile is disputing the dues. It contended that the lenders have charged an excess of Rs 227 crore by denying the company tax benefit under Section 10(23G) of the Income Tax Act.

The finance bill for 2001-02, however, denied the tax benefit with retrospective effect from 1962-63.

EPL submitted a fresh recast plan in April which envisaged restructuring Rs 1,200 crore worth of debt by floating infrastructure bonds in two tranches of Rs 600 crore each.

The eight-year instrument may carry a coupon rate of 11 per cent. The company has requested the institutions— ICICI, IDBI and IFCI) —to swap the existing debt with the infrastructure bonds.

Essar Power is one of India's first independent power producers and generates 515 mw power. It posted a net profit of Rs 63 crore in fiscal 2000.
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Sun Pharmaceuticals in talks with banks, FIs to support Caraco
Kolkata: Sun Pharmaceuticals, the pharma major, owning the Detroit-based Caraco Pharmaceutical Laboratories, is negotiating with banks and other financial institutions for fresh borrowings to support the cash-strapped US company.

Sun Pharma, which holds a large--almost 47 per cent--stake in Caraco, has already helped the company to get a $5 million term loan from ICICI Bank and a $10 million from Bank of Nova Scotia.

The Rs 600 crore pharma firm stood as the security guarantor for the credit line to support the R&D activities of Caraco, which has made investments for getting US FDA (Food and Drug Agency) approval for its seven ANDA (abbreviated new drug application).

Sun has an investment of $7.5 million towards equity and $5.3 million towards debt in Caraco.

The fresh borrowing may, however, further push Caraco into red as it is already burdened with heavy interest expense.
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