RIL, RPL to up FII stake
Mumbai: The boards of both Reliance Industries and Reliance Petroleum have approved a decision to allow 49 per cent FII stake in the two companies. In Reliance Industries the FII stake currently stands at 24 per cent. The decision will now come up for shareholder approval at the annual general meeting on June 15.

The decision to go in for higher FII stake is seen as a run up to the ADR/GDR issue expected in a month's time. Through the ADR/GDR issue, Reliance Industries would be divesting 13 per cent of its stake in Reliance Petroleum.

This would be the first time that an Indian company would make use of the two way fungibility of shares allowed in the Budget this year. It is believed that this offloading would be done to strategic investors, and hence at around Rs 49 premium to the current market price. Hence it is expected that Reliance would get much more than the Rs 3,024 crore the shares would fetch, at current market prices.
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Reliance reports lower profits
Mumbai: Reliance Industries has reported a 17 per cent drop in its net profit to Rs 540 crore for the fourth quarter ended March 2001 as compared to a profit of Rs 654 crore in the same period last year. Sales too dropped 2 per cent to Rs 6,444 crore (Rs 6,594 crore) for the quarter.

The company attributes change in method of depreciation from straight line to written down method, exchange gains difference on repatriation on foreign exchange and the Gujarat earthquake as the reasons for the lower net profits. Under the straight line method for depreciation calculation, the net profits would have been Rs 163 crores..

On a year on year basis, however, net profits are 10 per cent higher at Rs 2,646 crore from Rs 2,403 crore, while sales went up 38 per cent to Rs 28,008 crore (Rs 20,301 crore). The board has hiked dividend to 42.5 per cent for 2000-01 from 40 per cent last year.
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Michelin calls off tyre project in India
Mumbai: Global tyre maker Michelin has called off plans for a radial tyre making unit in India, thanks to recession in the automobile industry. The plant was to have come up at Talegaon near Pune.

The plan was for a Rs 500 crore project to make 10 lakh tyres per year, which would have created a 1000 jobs. It was to have come up on 35 hectares of MIDC land at Talegaon.

The France based Rs 60,000 crore Michelin group has manufacturing units in 80 countries, an 18 per cent market share in the global radial tyre market, an annual production of 830,000 tyres covering a broad product range. The group also produces inner tubes, wires, wheels and tourist maps and guides.
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JCT restructures for turnaround
New Delhi: Through a mix of debt and business restructuring measures , JCT, the flagship M M Thapar group company has managed to overhaul its Rs 900 crore debt liability. One important part of this exercise was its hiving off of its polyester unit to Reliance, which helped it pay off Rs 450 crores of its debt.

Its debt restructuring measures, as advised by GE Capital, also include concessions and write-offs, with necessary approvals from 43 lenders, and an influx of fresh equity by the Thapars to the tune of Rs 80 crores. This will take the net worth to Rs 200 crores, and bring down the debt to Rs 164 crores, with an annual interest outgo of Rs 25 crores as against the previous Rs 170 crores.

This would enable JCT bring down the number of lenders to 15, post a cash profit of Rs 20 to 25 crore after seven to eight years of losses, on a turnover of around Rs 650 crore, post-polyester unit sell off.

JCT also plans to sell off its Rs 100 crore steel division within the next few months, and focus on its core business of blended fabrics, spun yarn, nylon and polyester yarn so as to regain its former position as a leading textile player.
Along with the debt restructuring, JCT will be implementing a VRS as well as a staff re-locating plan, which will reduce its employee costs.

The company has a combined strength of about 8,000 people in all its centres including cotton textile divisions in Phagwara and Sri Ganganagar, its nylon filament yarn and steel divisions in Hoshiarpur.
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MTNL to deliver basic services in Dhaka
New Delhi: Mahanagar Telephone Nigam Ltd has joined up with London based WorldTel to offer basic telecom services in Dhaka, Bangladesh. Under the project, about 300,000 telephone lines of basic telecom services would be installed in Bangladesh.

This is the first overseas project for MTNL, which now provides cellular and basic telecom service in Delhi and Mumbai. MTNL would install, maintain and operate the network, while WorldTel would bring the necessary investments and management expertise. The two companies are in the process of negotiating the proposed investments and other parameters for the project including revenue-sharing.

The Dhaka project is said to be attractive since the Bangladesh government has already put in place a regulatory body, the Bangladesh Telecommunications Regulatory Body, which would ensure a level-playing field between private operators and the ministry of posts & telecommunications. It has also amended the 114-year-old Telegraph Act, 1885, facilitating fair and equitable competition.
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Boots Piramal to revive Clearasil
New Delhi: Boots Piramal, a marketing joint venture between Boots Healthcare and Nicholas Piramal, is planning to revive Clearasil, formerly a Procter & Gamble India brand. It was sold off to Boots Healthcare International globally last October, for 340 million dollars.

Even before the takeover, P&G had stopped promoting this 50-year old anti-pimple cream as a non-core category brand, and withdrew Clearasil face wash. Boots Piramal wants to bring all these back, and re-launch Clearasil in a big way.

The company has plans to bring in a basket of new products under the Clearasil brand.

Boots Healthcare is also planning to launch prescription drugs including skin care drugs such as Aknemycin and Akneroxid. Some of the products will be imported, while others will be manufactured by Nicholas Piramal.

Boots Piramal markets Boots brands such as Strepsil, Sweetex and Icy as well as two skincare products Lobate and Melalite which are manufactured by Nicholas Piramal.
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Pfizer refused permission on toll manufacturing
New Delhi: The Indian government has yet again refused permission to US pharmaceutical major Pfizer Corporation to enter into toll manufacturing agreements.

Government has cited the drug policy which does not allow companies with more than 74 per cent foreign equity participation to enter into such arrangement with third parties.

The company had made a similar request last year, which had been rejected on the same grounds. The drug policy requires companies which are more than 74 per cent foreign owned to manufacture drugs from the basic stage at its own facility. Thereby, it cannot outsource production to third parties or even to another company where it may be a joint venture partner.

Pfizer Corporation had been granted permission to set up a 100 per cent-owned subsidiary to coexist with an existing subsidiary, Pfizer India, in December 1999. The proposed equity investment in the wholly-owned subsidiary was one million dollars.

The new subsidiary was to have manufactured bulk drugs and formulations such as sulbactum, ampicillin, flucanazole, tinidazole and pyrantel promoate.

The company sought approval from the Indian government to allow it to enter toll manufacturing agreements either by itself, its joint venture company, or through third parties, since there as excess bulk drug capacity in the country.
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ABN to sell Sundaram’s insurance products
Mumbai: ABN Amro Bank will retail the products of Royal Sundaram Alliance Insurance Company in the Indian market.

Under the corporate partnership agreement between the two companies, ABN AMRO will use its network of ten branches to offer the entire range of Royal Sundaram’s personal and commercial insurance policies to the bank’s consumer and corporate customers. These will include motor, travel, home, personal accident and health under personal insurance, and marine, fire, engineering and liability insurance under commercial products.

This is the third marketing tie-up that Royal Sundaram Alliance has entered into, with a bank. Earlier, it had entered into tie-ups with Citibank and Standard Chartered Bank.

As per the guidelines issued by the Insurance Development and Regulatory Authority, a corporate agent can sell policies issued by one general insurance company and one life insurance company.

Once all the regulatory approvals are in place, ABN AMRO Bank will, in a phased manner, launch general insurance products across the country.
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Dabur JV barred from selling Chinese flavoured milk
New Delhi: Dabone International, a 50:50 joint venture between Dabur India and Bongrain International of France, has been banned from marketing flavoured milk and processed cheese in the country.

Dabone was importing flavoured milk from China and processed cheese slices from Australia.

According to the Foreign Investment Promotion Board (FIPB), the approval for the company was given for manufacturing speciality cheese and other milk products that were not reserved for the small scale sector, but Dabone , despite carrying out trading activity in the country for the past two years, not yet set up any manufacturing facility. Hence the rejection of its proposal to test market some of its brands, including Le Bon brand of flavoured milk and cheese in the country.

Besides, it has been reported that the company made the application for approval after the Secretariat for Industrial Assistance (SIA) objected to the company engaging in retail marketing of the products without proper government approvals.
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Mercedes Benz gets approval import completely built car imports
New Delhi: The Foreign Investment Promotion Board has given the go ahead to Mercedes Benz India's (MBIL) proposal to trade in completely built units (CBU) of its passenger cars in India. The approval is subject to the condition that MBIL will not undertake retail trading of these cars.

The company would be importing the cars for onward sale to its wholesale dealers who would in turn sell them to the retail customers.

Hence MBIL's trading would primarily be in the form of wholesale trade with 100 per cent advance payment. The government has permitted FDI in wholesale trading.

It also approved the proposal of Daimler Benz, Germany, to acquire the 14 per cent equity held by Tata Engineering & Locomotive Ltd's so as to take its present holding of 86 per cent to 100 per cent. Thus Tata Engineering's 84 million shares are to be purchased at Rs 10 each.
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Ranbaxy launches new drug delivery system
New Delhi: Ranbaxy Laboratories Ltd unveiled Ofloxacin Once-a-Day, a new drug delivery system. Ofloxacin Once-a-Day, is an anti-infective delivery system that replaces the current twice-a-day dosage regimen with a once-a-day regimen.

The company is also working on the 400, 600 and 800 mg variants of the product which are at the third phase of clinical trials. Ranbaxy started work on the product in January 2000.

It has already filed for a product patent in India and the US. Ofloxacin Once-a-Day will be launched in the domestic market in the fourth quarter of the year. The product will be launched in the US and Europe in the fourth quarter of 2003, by which time it will be available in 40 countries. The market for Ofloxacin is estimated to be 260 million dollars.

The product can be used against infections of the urinary tract, lower respiratory tract and prostatitis.

The key markets are in the US, France, India, Germany, Mexico and China.

Ranbaxy is also in talks with companies for co-marketing or out-licensing Ofloxacin Once-a-Day in the US and Europe. In India, it will market the product on its own.

Earlier, Ranbaxy had come out with Ciprofloxacin Once-a-Day, its first novel drug delivery system product, licensed to Bayer AG of Germany, for which it received landmark payment of five million dollars from Bayer.
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SBI Caps to hire for SBI Life
Mumbai: SBI Life Insurance Company, the new insurance joint venture between public sector State Bank of India and Cardif of France will carry out its initial recruitment through sister company SBI Capital Markets. The operations are scheduled to begin in May this year.

SBI Life has also commissioned Tata Consultancy Services (TCS) to customise the proprietary software of Cardif, its overseas partner.

The public sector bank will hold a controlling 74 per cent stake in the joint venture.

The new venture will have R Krishnamurthy as the managing director and chief executive officer, a nine member board with three representatives from Cardif, while the board will be headed by SBI chairman Janaki Ballabh.

SBI Life Insurance will take on 12 people from the bank. Three to four members on the executive level will be from Cardif, while the remaining will be recruited from the market.

A V Ganapathy, a retired executive director from Life Insurance Corporation of India (LIC) has been appointed as the actuary while K Kannan, a retired Reserve Bank of India official, currently advisor on monetary issues, will be made the chief actuary. Other retired senior officials from the RBI and LIC have joined SBI Life Insurance as consultants to assist in underwriting operations and law matters.

SBI Life Insurance is looking at a staff strength of 70 in the first year of operations.
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