Enron chief warns India of US sanctions
London-- US energy major Enron Corporation has threatened India with new American sanctions unless the company and its partners recover the full $1 billion in costs incurred in building the Dabhol Power Project in Maharashtra.
Said Enron chairman Kenneth Lay in an interview published in the Financial Times, "There are US laws that could prevent the US government from providing any aid or assistance or other things to India going forward if, in fact, they expropriate property of US companies,"
Enron spokesperson Mark Palmer however said in Huston that Ken did not make any kind of threat and he was responding to a question about what might motivate the Indian government to help break the deadlock.
The threat, according to the leading London-based financial daily, comes at a sensitive time as the Bush administration is trying to improve its long-strained relations with India.
Mr Lay, who is known to have warm relations with the Bush administration, said "if they try to squeeze us down to something less than cost, then it basically becomes an expropriation by the Indian government, and that would send an incredibly damaging signal to the international capital markets and investment community as to making any future investments in India".
Maharashtra State Electricity Board (MSEB) owes the Enron-promoted Dabhol Power Company (DPC) $64 million in unpaid electricity bills for eight months.
DPC, in which Enron has 65 per cent interest, shut down the 740 mw phase-I in May after MSEB refused to buy power saying it was too expensive while construction work on 1,444 mw phase-II has been stopped since.
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Govt asks Dabhol to complete 2nd phase
New Delhi--The government of India has told Dabhol Power Company that it must complete the construction of the second phase of the project. Simultaneously, it has told Indian lenders to this project to furnish details of additional funds that would be required to complete the second phase. The Indian lenders, primarily the state-owned financial institutions, are expected to provide these details to the finance ministry by Monday. According to one estimate, the additional funds requirements could be around Rs 2,200 crore.
Almost 95 per cent of the second phase of the Dabhol project has already been implemented.
The government move on ensuring completion of the second phase of the Dabhol power project is part of an action plan aimed at resolving the controversy over the Enron-promoted company.
In view of the controversy over tariff and its dispute with Maharashtra State Electricity Board (MSEB), Enron had offered to withdraw from the project provided the government bought its equity (65 per cent of total equity estimated at $1 billion) at cost.
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TCS to add 3,000 staffers this fiscal may go for IPO
HyderabadIt is yet another evidence that the US slowdown has not had much impact on Indian IT companies, yet.
Tata Consultancy Services (TCS) proposes to add 3,000 more staff to its total strength during this year and may also come out with an IPO.
TCS vice-chairman FC Kohli said that the company would continue to recruit people year-by-year and there was no question of bench sitting, or retrenchment.
However, Kohli said TCS was not looking for experienced staff, and planned to recruit fresh from the campuses and train them as per its requirements in order to meet future challenges, he said.
Of the 3,000 fresh recruits, a sizeable number will be deployed towards growing domestic projects.
On the proposed public issue, Kohli said, TCS was working on the issue but nothing had been finalised. If TCS enters into the market, it may earmark up to a maximum of 10 per cent to the investors, he said.
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Tata Finance in curious deals
MumbaiTata Finance seems to be involved in a number of curiousdeals. It now appears that a subsidiary of TFL, Inshaallah Investments, also lost a lot of money in an intragroup deal.
On December 30, 1999, Tata Chemicals struck a deal with Inshaallah to sell 9.82 lakh shares of TFL.
The market price of TFL at the time was Rs 131. But the deal could not be consummated as Inshaallah discovered it did not have the Rs 12.87 crore it needed to take delivery of the shares.
The deal finally went through on March 30, 2000, with Inshaallah taking delivery of the TFL shares from Tata Chemicals. By this time, the share price of TFL had dropped by about 30 per cent to Rs 91 from the originally contracted price of Rs 131.
As penalty for not keeping up its end of the deal in December 1999, Inshaallah was made to pay for the shares at the higher price of Rs 131. In effect, it lost Rs 3.8 crore since the value of the shares had by then eroded to about Rs 9 crore.
Tata Chemicals also insisted that the investment subsidiary fork out interest at 14 per cent on Rs 12.87 crore, which for three months worked out to about Rs 45 lakh.
Inshaallah ended up losing Rs 4.25 crore in the whole deal.
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Volvo to increase presence in India
BangaloreVolvo, the $15bn global truck giant, wants to be among the big players in India instead of remaining a niche player.
Roar Isaksen, chairman of Volvo India board and president of Volvo Truck Corporations international division said that Volvo is now an established brand in India and will gradually widen its product offering and focus on becoming a big player in the Indian commercial vehicle market.
There are about 900 Volvo trucks plying on Indian roads since the company rolled out the first one in June 1998 three years back.
Isaksen said that Volvo will look at exploring new business opportunities in India which includes making India part of its global sourcing engine.
He also revealed that Volvo has made a beginning this year by sourcing Rs 10 crore worth of components from India for its international operations.
In the future Volvo plans to service the entire Saarc belt business from the India facility only and has invested over Rs 375 crore in building its plant in Hoskote, Bangalore, where it has the infrastructure to develop almost the entire product lineup of the company.
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Binani to erect 2 m tonne cement plant
Mumbai--Binani Industries is planning to expand its presence in the cement business and has decided to step up capacity by over 3 million tonne to 5 million tonne.
The company plans to set up a 2 million tonne greenfield cement unit at a port-based location, in Gujarat. The study on the possible location is currently underway and at the same time, it will increase the capacity of its existing cement plant at Sirohi in Rajasthan to 3 million tonne, from the current 2 million tonne, through debottlenecking.
Company officials said the estimated cost of the proposed expansion would be around Rs 550-600 crore, but declined to reveal how it was to be funded.
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Cell operators contemplate action against MTNL, BSNL
MumbaiThe Cellular Operators Association of India (COAI) is considering asking the Telecom Commission (TC), the Telecom Regulatory Authority of India (Trai) and the Wireless Planning Commission (WPC) to take action against Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) for failing to put up suitable filters to their CDMA transmitters that have been severely affecting the cell companies networks.
Though the association does not at the moment contemplate taking BSNL/MTNL to court, industry sources did not rule out the possibility eventually.
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HDFC Bank chief says acquisition on agenda
Mumbai--After successfully completing its $172.5 million American depository share (ADS) issue last month, HDFC Bank is on the prowl and is said to be looking at acquisitions.
Aditya Puri, managing director, HDFC Bank, "I am open to acquiring a bank provided it is available at a reasonable price, has retail assets and does not have non-performing assets (NPAs). Besides, it should not be a regional player."
According to sources, the potential takeover targets could be south-based old private sector banks such as Dhanlakshmi Bank and Karur Vysya Bank besides new generation Global Trust Bank.
HDFC Bank took over TimesBank more than a year back and is adding around 50 to 60,000 customers every month. It is also increasing the branch and ATM network across the country.
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BankAm lines up 3-pronged strategy in India
Mumbai--Bank of America is repositioning itself in India. Earlier the bank shut its investment business and sold its retail banking business as part of a global strategy.
Colm McCarthy, president-Asia, BankAm, said, "We don't believe in balance-sheet size. For us, the viability of a business depends on returns." The bank, which recently opened a branch in Bangalore, its fifth, set up after a gap of two decades is now looking at fresh investments. It is pumping in $50 million into its proposed 100 per cent non-banking finance subsidiary for which it has already received the Foreign Investment Promotion Board approval.
The bank has chalked out a three-pronged strategy for India. It will focus on working capital financing (including LCs, forex loans), global markets (swaps and derivatives) and debt capital raising (syndicated loans, structured project financing, equity and credit derivatives).
The proposed non-banking finance company will also focus on primary dealership, debt distribution among others.
Another focus area is private equity where it plans to invest around $50 million in private equities over the next few years.
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HC grants LIC plea
Mumbai--The Mumbai High Court, in an interim injunction has granted Life Insurance Corporation of Indias (LIC) plea not to transfer its holding in Modi Rubber Ltd (MRL) for open offer by companys promoters BK and VK Modi until final orders.
But this is subject to the undertaking by LIC would not dispose off 20 lakh shares until the final hearing and disposal of the case and the institution has to give an undertaking within a week to this effect.
LIC moved the court on July 23 against transfer of its 12 per cent holding in MRL to promoters contending that the transfer happened "inadvertently" and that the transfer documents allowing stockholding corporation of India (SHCIL) to transfer the shares in the ownership of the corporation to the company was signed by two officers "by mistake."
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HCL Tech close to finalising acquisition
MumbaiDelhi-based HCL Technologies is close to finalising an acquisition of a US based company having completed its due diligence for acquiring the company.
HCL is likely to acquire a company active in offering R&D based services in the networking field.
Officials confirmed that the acquisition would take place through the parent company and not its subsidiaries such as HCL -Perot.
HCL Technologies, whose fiscal year ends on June 30, recently declared its full year results for the fiscal 00-01.
The company reported a net profit of Rs 488 crore, up 101 per cent with revenues of Rs 1,405 crore, up 52 per cent.The acquisition, if it happens, may drive growth for the company in the current fiscal year (01-02).
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Dabur India pumps $6 m more into UK subsidiary
Mumbai --Dabur India has made an additional investment of $6 million in its UK subsidiary, Dabur Oncology. Company officials said the fresh investment in the subsidiary had been made to finance the setting up of a cytotoxic sterile manufacturing plant for oncology formulations.
At the same time, the company is also looking towards marketing tie-ups for promoting its new chemical entities.
The proposed plant of Dabur Oncology is expected to start commercial production by the end of the current fiscal.
This will enable the company to focus on the generic oncology markets of Western Europe and the US, and also to do joint research and production of drugs in small batches for clinical research.
Dabur India's exports from anti-cancer formulations have shown a healthy growth and the company has obtained new regulatory approvals in the markets of Thailand, Philippines, Malaysia, Costa Rica, Columbia, Peru, Ukraine and Belorussia.
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TCS development centre to come up in Hungary
BangaloreTata Consultancy Services, (TCS) plans to launch an offshore development centre in Hungary on August 29, according to company sources.
The sources said the centre, the company's first in Europe, would begin with 50 people.
The company, which offers a blend of strategy consulting and system integration services to help organisations architect and build their businesses in the e-economy, planned to ramp it up depending on the orders it received, they said.
The Hungarian centre would cater to the company's European clients, said a company statement.
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Colorplus to get global presence
New DelhiColorplus, the Chennai-based Colorplus the readymade mens garments major says it is going global and had begun forging tie-ups with reputed international companies for improving product quality.
The company has also outlined a Rs 5-crore expansion plan for the domestic market by taking up its distribution reach to 100 stores across the country.
Colorplus managing director Rajendra Mudaliar said, "We have joined hands with many international companies to boost our exports. It will take another 2-3 years to get aggressive in the international market."
Colorplus recently got trademark registration in some European and American countries to export its products, he said.
He said the company was going to be even more aggressive in the domestic market by opening 20 showrooms, including 5 exclusive ones in north and west India before September 2001, he said.
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1650 Balco employees opt for VRS, 850 may get nod
MumbaiAround 1,650 employees of the Sterlite-controlled Bharat Aluminium Co (Balco) have opted for a voluntary retirement scheme (VRS) that was offered by the company to around 6,300 employees in August this year.
The company, however, will offer the package only to 850 employees at the moment and would consider the rest at a later stage. The scheme was floated in July and closed on August 16.
The VRS package offers an average of Rs 4 lakh to an officer and double the amount to an executive.
Balco offered a similar scheme during January when the response was around 1,300 applications and only 600 applications were accepted.
This had pulled down the employee strength to around 6,400 employees. Balco, prior to privatisation had around 7,000 employees.
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Reckitt Benckiser changes Dispirin formula to avoid price control
MumbaiReckitt Benckiser, manufacturer of painkiller drug Disprin has decided to change the key ingredient in the drug, in order to avoid price control.
Disprin, an over-the-counter (OTC) aspirin formulation, is being replaced with Disprin Plus, which contains another painkiller drug paracetamol, not subject to price control.
Thus Disprin is being phased out. Disprin Plus will cost Rs 10 for a strip of 10, up from Rs 2.75 per strip of 10 of Disprin, a 260 per cent increase.
The government recently slashed the prices of medicines containing aspirin following a cut in the bulk drug prices earlier.
Though the company could not be reached for comment, chemists in the city confirmed to ET that Disprin Plus was replacing Disprin for some weeks.
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Bidders question A-I balance-sheet
New Delhi--Shortlisted bidders for AI disinvestment have disputed the airline's balance-sheet on the ground that there was underprovision of Rs 832 crore.
Sources said that bidders had raised doubts after they completed their due diligence of the airline where the government has offered to sell 40 per cent of its stake to strategic partners.
The bidders had claimed there was underprovisioning of Rs 832 crore in the A-I balance-sheet, sources said.
In case the claims are proven correct then the financial accounts of A-I, which has accumulated losses of Rs 930 crore, will portray a dismal picture and could affect the valuation.
As such Tatas, who bid in consortium with Singapore International Airlines, were reported to be contemplating withdrawing from the race on the ground of valuation, but the official sources denied it.
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BP revises offer for Castrol
Mumbai British oil giant BP has filed fresh documents raising its offer price to Rs 350.02 per share for an additional 20 per cent stake in Castrol India, an official with Sebi said on Friday.
The price offers a 38 per cent premium to Castrol's share, which was up 2.55 per cent at Rs 253.75 on the Bombay Stock Exchange at close, while the benchmark index was down 0.03 per cent.
As per the revised document, the open offer will be open between September 7 and October 7.
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