Government gives green signal to RPL’s Rs 5,000-cr GDR issue
New Delhi— Among the 47 FDI proposals involving inflow of foreign investments worth Rs 6,020 crore cleared by commerce and industry minister Murasoli Maran on Monday was Reliance Petroleum’s Rs 5,000-crore GDR issue.

RPL’s proposal involves issue of GDRs against existing shares held by the promoters -— the Ambani family-controlled Reliance Industries -— and non-promoter shareholders.
RIL, which holds about 64 per cent in RPL’s equity share capital of Rs 5,200 crore, proposes to bring down its stake to 51 per cent post-issue of the GDRs. This would involve sale of some 67.60 crore shares to strategic and financial investors overseas.
This is the first case where GDR offering is being made against existing shares. The RPL proposal has been possible following the Union Budget announcement allowing two-way fungibility of listed shares.
Other significant proposals cleared by the minister on the recommendation of the Foreign Investment Promotion Board are that of Mahindra Realty & Infrastructure Developers to induct 20 per cent foreign equity equivalent of Rs 46 crore, General Labels & Labelling of Malaysia to set up a 100 per cent subsidiary with Rs 28 crore investment and Moschip Semiconductor Technology to induct 44.23 per cent foreign equity equivalent to Rs 30.80 crore.
The proposal of ABB Holdings (South Asia) to hike stake in its investment holding company to 100 per cent from 51 per cent for Rs 4.13 crore has also been cleared.
HDFC Bank’s GDR/ADR issue proposes to use the money raised to fund acquisition of other private/public sector banks as part of its aggressive growth plans.
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Reliance, Bharti & BPL in race for 4th cell licence
New Delhi—Till now 13 application forms have been purchased from DoT for bidding for the fourth cellular license. Among the companies which have bought the licenses the major ones are Reliance, Bharti, BPL, the BK Modi Group, Escorts and Birla AT&T. The last date for buying application forms is May 31, while applications can be submitted by June 8.
VSNL and MTNL, the two public sector companies under the Department of Telecommunications, have also bought application forms though DoT may not allow them to bid for the fourth cellular licences.
At present, Bharat Sanchar Nigam, another PSU under DoT, holds the licence to operate cellular services throughout the country except in Delhi and Mumbai, where MTNL is a licence-holder and is operating the services.
The guidelines for fourth cellular licences envisage that the existing licence-holders cannot bid for those areas where they are already operating services.
Moreover, a promoter is not allowed to have stake in more than one bidder-company for the same area. The government is the majority equity-holder in both BSNL and MTNL.
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Bridgestone/Firestone terminates agreement with Ford
Washington—Bridgestone/Firestone terminated a century-long relationship with Ford Motor Co. The ties between the two became strained last year following the recall of millions of Firestone tyres linked to at least 174 traffic deaths in the US.
John Lampe chief executive officer of Bridgestone/Firestone, in a letter to his counterpart in Ford, Jacques Nasser, wrote that business relationships, like personal ones, are built upon trust and mutual respect. Firestone has come to the conclusion that it can no longer supply tyres to Ford since the basic foundation of their relationship had been seriously eroded.
Officials from Ford and Bridgestone/Firestone have exchanged blame for the tyre failures since they came to light last summer. Federal safety investigators have collected hundreds of accident reports linked to blowouts, tread separations and other problems.
Last August, Bridgestone/Firestone recalled 6.5 million ATX, ATX II and Wilderness AT tyres thinking the recall was adequate to cover all defective tyres. However, last week Ford officials met federal investigators to say they were concerned about other Wilderness ATs not included in the recall.
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Sebi wants RBI to fill up vacancies
Mumbai-- Sebi is asking the Reserve Bank of India to fill up key slots left vacant by the exodus of key officials.
Thus under the circumstances, RBI officials in the rank of chief general managers may join Sebi at the executive director level, subject to clearance from the RBI governor’s office. The central bank will soon seek the response of its senior officials on the issue.
After the ministry of finance refused to grant extensions to officers on deputation to Sebi from the Indian Revenue and Indian Administrative Service, senior executive directors like L K Singhvi and O P Gahrotra were not given extension beyond six and five years, respectively. Executive director Ashok Kacker, too, was not given an extension. What makes matters worse for Sebi chairman is the fact that even board member J R Varma is on his way out.
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Intel gets go-ahead to issue redeemable pref shares
New Delhi—Intel Technology India has been given the go-ahead to issue 1 million 1 per cent redeemable preference shares, but has been told that the issue and redemption should be done at par.
The company had sought to issue the 1 million shares of Rs 10 each at a premium of Rs 990 per share and redeem it within a period of 20 years at the same premium. Intel Technology had proposed that these preference shares be non-cumulative for the purpose of dividend payment.
Although the Department of Economic Affairs has given its clearance to the issue of preference shares, it has pointed out that the policy in place did not allow for either issue or redemption of the shares at a premium. Further, the policy requires a lock-in period of five years.
Intel Technology India is a 100 per cent foreign-owned entity with Intel Services as foreign collaborator.
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Vivendi Universal to acquire MP3.Com in $372-m deal
San Diego—Vivendi Universal said that announced that it is acquiring MP3.com the online music provider, in a $372 million cash-and-stock deal.
Vivendi said on Sunday the deal will support its efforts to create an online digital music subscription service
Jean-Marie Messier, chairman and chief executive officer of Vivendi Universal said that MP3.Com would be a great asset to Vivendi in meeting its goal of becoming the leading online music service provider. He also said that MP3.Com's board approved the deal and it expects that more than 50 per cent of the company's shareholders will vote for it.
As part of the envisaged deal MP3.Com shareholders will be paid either $5 for each share they own or receive american depositary receipts worth $5, or a combination of both, Vivendi said.
Details about how the service will work and how much it will cost have not been announced.
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Jindal Power to set up 1,000-mw plant in Chhattisgarh
New Delhi-- Jindal Power Limited is setting up a 1,000 MW power plant with an investment of Rs 4,500 crore at Raigarh in Chattisgarh. Another group company, Jindal Steel and Power is also investing Rs 1,900 crore in various projects like rail and universal beam mill as well an aluminium plant at Raigarh.

Thus Jindal Power has signed a MoU with the state government to this effect.
Jindal said the company would be investing Rs 1,900 crore in setting up various steel projects in the state the break-up of which is Rs 450 crore in rail and universal beam mill with a capacity of 7.5 lakh tonne; aluminium plant with an investment of Rs 400 crore with 50,000 tonne capacity; 110 MW captive power plant with an investment of Rs 400 crore; Rs 150 crore funding in steel melting shop II with a capacity of 7.5 lakh tonne; Rs 50 crore in ferro chrome plant with an investment of Rs 50 crore.
In addition to this, Rs 450 crore would be invested in other projects like DRI plant, mini blast furnace, development of additional coal mines and coal washery.
Speaking on the occasion, Ajit Jogi, chief minister of Chhatisgarh said the state government would offer pit-head land for setting up power generating units to other states for their own use.
Monnet Ispat Limited also signed an MoU with the state government for putting an investment of Rs 1,200 crore for expanding sponge iron capacity, captive power generation and development of coal mines.
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Eicher posts net loss for 2000-01
New Delhi—Eicher has posted a net loss of Rs 51.47 crore for the fiscal ended March 31, 2001 as compared to a net profit of Rs 15.72 crore in the previous fiscal.
Eicher informed the Bombay Stock Exchange (BSE) on Monday that its total income fell by 12.7 per cent at Rs 496.77 crore as against 569.12 crore during 1999-2000.
Sources attributed the loss to expenditure incurred on a VRS of Rs 9.02 crore and an increase in interest expenditure at Rs 23.92 crore during 2000-01 as against Rs 12.65 crore a year ago.
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Balco management to launch VRS
New Delhi—The management of the recently-privatised Bharat Aluminium Company said on Monday it would launch a voluntary retirement scheme in July.
Balco managing director, S C Krishnan said the company would be opening the first tranche of a VRS on July 1, 2001. This comes a fortnight after Balco reached an agreement with unions following a 67-day long strike against the privatisation of the aluminium giant.
Krishnan, said the VRS was likely to be kept open for 15 days though no final decision has been taken on duration of the VRS. All employees of the company will be eligible for the VRS, he said while adding that the compensation package would be at par with that offered by Balco earlier this year.
The employees will be offered two months pay package for every year of service rendered or the salary for the remainder of service left whichever is lesser, he said.

Balco had opened a VRS in January, 2001 where a few hundred employees had opted for the scheme, reducing the organisation's strength to 6,400 employees.
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RIL increases stake in BSES via creeping route
Mumbai—Reliance Industries, RIL, has through a creeping acquisition route hiked its equity stake in power major BSES to 29.68 per cent from 26.68 per cent costing the company about Rs 76 crore.
RIL had come out with an open offer in July 2000 as a result of which its stake had increased by almost 12 per cent.
Over the past eight months RIL has acquired 39.04 lakh BSES shares at an average cost of Rs 195 per share -— a hefty discount of 23 per cent over the enhanced open offer price of Rs 255 a share.
At present, the BSES shares are quoting around Rs 191 per share. Reliance Power Ventures, a wholly owned subsidiary of RIL, through open market purchases, acquired these shares.
BSES distributes power in Mumbai’s western suburbs and operates a 500-mw power plant at Dahanu in Maharashtra. It also has a 51 per cent stake in three electricity distribution companies in Orissa.
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JVSL losses down by 98 crore
Mumbai—Jindal Vijaynagar Steel posted a lower net loss of Rs 49.6 crore for the financial year ending March '01, against a loss of Rs 148 crore in the previous year. The company said this loss was due to a lower net sales realisation.
According to company officials, NSR in March '01 stood at Rs 13,318 per tonne compared to Rs 13,566 in March '00, a drop of Rs 248 per tonne.
The company however registered a rise in its turnover to Rs 1,349 crore compared to Rs 930 crore last year, a growth of 45 per cent, but with steel prices plunging to a low of Rs 10,000 per tonne, the growth in turnover did not improve the company's position. Before the fall, prices of hot-rolled coils stood at Rs 17,500 per tonne.
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Daewoo hit by a hike in duties on finished cars
Mumbai—The Government's recent attack of import duty hike on completely built units from 35 per cent to 60 per cent, has hit Daewoo Motors India's ambitious plans to launch a number of models in the mid-size segment
Daewoo had decided to launch its three premium models -- Magnus, Nubira II and Lanos II -- through import of CKD/SKDs.

This move now may have an adverse effect on the company’s margins as such imports are no longer remained a viable route for introducing new models.
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IFC to take 13.5 percent stake in Orchid Chemicals
New Delhi—The Washington-based International Finance Corporation on Monday announced that it would pick up 13.5 pent stake in Chennai-based pharma company Orchid Chemicals and Pharmaceuticals by subscribing to $20 million foreign currency convertible bonds.
IFC said that the FCCBs would be convertible into equity shares of the company at a future date after which IFC would hold about 13.5 per cent of the company's share capital.
This is its first investment in a pharmaceutical firm in South Asia and the corporation will also give a loan of $10 million to Orchid to part-finance its $116-million expansion and diversification programme.
Some time back Orchid embarked on a mega expansion and diversification programme to transform itself from a bulk drug company into a well integrated, research and technology driven company. As a part of its diversification programme, the pharma company is planning to foray into anti-ulcerants, analgesics and biotech and obtain US food and drug authority and UK medicines control agency certifications.
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Takeover code not breached in Jai Prakash
New Delhi--Merchant-banking firm H B Stock Holdings said it had not breached any provisions of the takeover code and its equity stake in Jai Prakash Industries, JPIL, was well below the 15 per cent mark.
This came after market regulator Sebi issued a letter to the firm, demanding a declaration of its stake in Jai Prakash Industries to know if there was a breach of takeover code.
Company sources in H B Holdings clarified that the latter’s stake in JPIL stood at a little over 12 per cent.
While HB-promoter Harish Bhasin was not available for comments, sources in HB said JPIL had been duly informed when the company, along with its associates and persons acting in concert, breached the 5 per cent level in August 1999.
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Reliance increases stake in L&T
Mumbai--Reliance Industries has raised its stake in Larsen & Toubro from, L&T, by 0.38 per cent to 2.87 per cent as of March 31, 2001, the company disclosed in its 2000-01 annual report. Along with Reliance Industrial Investments & Holdings (RIIH), which holds another 3.74 per cent, the two Reliance group companies now hold at least 6.61 per cent in L&T, up from 4.67 per cent at the end of the 1999-2000 financial year.
The group’s holding could go up once Reliance Capital’s holdings are also included. Last year, the finance arm of the Ambanis had increased its holdings in L&T from a mere 1,050 shares in 1998-99 to 21.78 lakh shares, or 0.87 per cent.
During the last fiscal, RIL’s stake in L&T shot up from 9.52 lakh shares to 71.67 lakh shares, while that of RIIH declined marginally from 1.06 crore shares to 92.91 lakh shares. Reliance, for several years now, has been the second largest shareholder group in L&T.
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RIL plans to raise Rs 1,000 crore through preference shares...floats 3 overseas arms
Mumbai--Reliance Industries (RIL) is planning to raise up to Rs 1,000 crore through issue of redeemable preference shares and will seek shareholders approval for the issue at its annual general meeting.
Company sources said RIL would utilise the funds for general corporate purposes and for any future expansions or acquisitions.
RIL has also proposed to extend its share buy-back programme for one more year. The total amount earmarked for buy-back will remain unchanged at Rs 1,100 crore with a maximum price of Rs 303 per share.
The company is seeking the shareholders' approval for increasing the FII limit and share buy-back programmes.
Reliance Industries (RIL) has floated three overseas subsidiaries-- Reliance Infocom Inc, Reliance Infocom BV and Reliance Technologies.
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Philips to focus on the premium segment in TVs
New Delhi—Philips India Ltd is restructuring its colour television portfolio to market high-end models in a bid to generate high margins instead of targeting high volumes at the mass market. Hence the company has launched a range of 29-inch flat TV models and a projection TV priced higher than Rs 40,000. The products include its pioneering digital natural motion technology.
The high-end category at present generates 25 per cent of the total CTV sales turnover, and is expected to become more popular in a year. During 2000-01, when the entire CTV market grew around 4.5 per cent (unit sale) and 3 per cent (in value-term), the 29-inch CTV segment grew 33.1 per cent in terms of unit sale and 29.9 per cent in value-term. During the same period, Sony achieved a 10.5 per cent growth in terms of value, while Philips registered a decline of 32.4 per cent.
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Hilton plans 10 five-star hotels
New Delhi--Hilton International plans to launch ten five-star hotels in India within the next ten years starting in the cities of New Delhi, Mumbai, Chennai and Bangalore.
The Hilton group is considering various options like giving management to franchisees, equity participation, joint ventures, lease or contracts.
Hilton International Asia Pacific president Koos Klein said the group would pick up at least a 26 per cent stake in a project depending upon its strategic importance and financial returns.
He added the group might look at fully owned hotels in future but as of now, was not looking at 100 per cent equity and declined to elaborate further on the company's investment plans.
The group is in advanced stage of negotiations with various parties in New Delhi, Mumbai and Chennai and the deal is likely to be finalised within the next two months, Klien said.
The company plans to target secondary cities including Agra, Jaipur and Kochi in the second phase.
Earlier, Hilton was running a five-star hotel in New Delhi on a contract which ended in 1998.
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Samsung; extensive investment plans
Seoul--Samsung Electronics has lined up investment plans worth $215 million (approximately Rs 1,000 crore) for setting up white-goods manufacturing facilities in India in four years.
According to SS Park, vice-president (global marketing), Samsung Electronics, the company would begin setting up a white-goods manufacturing facility in India by establishing an air-conditioning plant in July.
The air-conditioner making facility, to be set up in Samsung Electronics India's Noida complex, would be ready for commercial operation by end of the calendar year. The plant would produce high-end products only, leaving the country's low- and medium-end segment untouched to the local producers. The investment cost for the unit has been pegged at Rs 20 crore.
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RPG Cellular raises Rs 200 crore from ICICI, IL&FS, Rabo Bank
Mumbai--RPG Cellular Services (RCGS), has raised a loan of Rs 200 crore from ICICI, IL&FS and Rabo Bank to fund its expansion plans after it failed to find any takers for the 49 per cent of the Chennai license it had put on the block.
RCGS is part of the Rs 6,500 crore RPG group.
While confirming the development, sources in the company said that the loan has been raised to fund RPG Cellular’s expansion plans for the Chennai circle and while Rs 200 crore has been sanctioned, the company will only be using Rs 125 crore at present.
RPG Cellular is also looking out for a strategic partner following the decision of Vodafone to exit India.
The RPG group owns 68 per cent in RPG Cellular, while Air Touch Vodafone and Skycell Mauritius hold around 21 per cent and 11 per cent, respectively.
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AES shuts down unit, demands dues from Gridco
Bhubaneswar—The confrontation between AES Corp of the US and Gridco over settlement of dues has reached a new high with the US utility giant deciding to shut down one of the 2x210 MW units of Orissa Power Generation Corp (OPGC) at Ib Valley on Thursday, demanding clearance of dues.
OPGC, a coal-fired thermal power station, is run by AES Corp.
Gridco has asked the state government to intervene in the matter.
Chairman-cum-managing director Priyabrata Patnaik has pointed out that the shutdown unilaterally violates the power purchase agreement.
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