Eicher mulls merger of tractor, vehicles cos
New Delhi: The Rs 1300-crore Eicher group is poised for a major restructuring. It has appointed Ambit Finance as advisor, to explore and study the possibility of a merger between tractor and motorcycle company Eicher Ltd and commercial vehicles manufacturing company Eicher Motors Ltd, industry sources reveal. According to the sources, the merger of the two entities, both of which are listed, would provide the group with a much larger asset base as a consolidated entity and thus allow it carry out its expansion plans in a more effective manner. The merger would also strengthen the balance sheet of the company and position it as an integrated automobile firm, analysts point out.

In a meeting held earlier this month, the board of directors of Eicher Ltd and Eicher Motors Ltd had decided to appoint advisors/consultants to review the current structure of various businesses of the company. Eicher Motors Ltd, which had a turnover of Rs 625.92 crore in the last financial year, manufactures trucks and buses that meet a range of transportation needs. The company is believed to have aggressive plans for the heavy and multi-axle commercial vehicles business, and the passenger vehicles business. Meanwhile, Eicher Ltd, which clocked a turnover of Rs 532.49 crore in 2002-03, has business interests in tractors (has a presence in the 24 to 60 horse power segment), power motorcycles (under Royal Enfield), diesel engines, gears (Eicher Demm) and auto-aggregates and components.
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Sahara plans online auctions for Colombo flights
Kolkata: Those wanting to fly Air Sahara on the India-Colombo-India sector can avail themselves of advance purchase schemes and even bid for tickets through online auctions.

The scheduled private airline, which is "ready to take off for Colombo within seven days of receiving all clearances", has decided to introduce advance purchase schemes and auctions on its proposed flights from destinations in India to Colombo and back. U..K. Bose, chief executive officer of Air Sahara, said passengers could purchase tickets 45 days, 30 days, 21 days and 15 days in advance. They can also bid for tickets through online auctions. The move is expected to have a positive impact on the airline's passenger load factor on the India-Colombo-India routes.

Bose said Air Sahara would focus on the tourist traffic and was working on various package deals. The idea was to tap this traffic by offering packages. Talks in this regard were being held with hotels, restaurants, tour agencies and tour facilitators in Sri Lanka. "Business traffic will be linked to the growth of the economy. A substantial number of outbound traffic from India will comprise tourists. To attract them, we will provide good package deals. In fact, it will be a good idea to replicate the Goa model. All airlines flying to Goa are doing well because of the packages that are being offered," he said.

According to Bose, with Buddhists comprising 60 per cent of the population of Sri Lanka, Air Sahara has decided to focus on the religious travellers on its outbound flights from Colombo. As such, the airline will operate flights to places of Buddhist interest. Besides Gaya, Varanasi would be the access point for Sarnath and Gorakhpur for Lumbini. The airline proposes to deploy a Boeing 737-800 aircraft on these routes every alternate day. Besides, the airline will also operate daily flights on the Delhi-Bangalore-Colombo and Mumbai-Colombo sectors. In a phased manner, it will connect Colombo with other destinations in India as well.
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Haileyburia Tea Estates re-opens
Kochi: The Haileyburia Tea Estates Ltd, the producers of `Chinnar brand tea', having 1,000 hectares under tea, coffee and spices in Kerala's Idukki district, which was under lockout from Jan 12, 2003, has re-opened following an agreement with the workers. The company sources said that after a series of discussions and conciliations before the State labour department officials, the workers had signed an agreement through Sub-Committees formed to represent each factions and "we are happy to announce that our Semnivalley and Haileyburia divisions have been reopened on Oct 31, on mutually accepted conditions, mainly agreeing on increased productivity in plucking of leaf and all other activities ensuring highest level of discipline for the smooth and uninterrupted functioning in future".
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Usha Martin gets nod for coal mining in Jharkhand
Kolkata: Usha Martin Ltd, formerly Usha Beltron Ltd, has received the West Bengal government's permission for coal mining in Jharkhand. The 30-year lease has the prospect of generating 30 million tonnes of A/B grade coal, albeit for captive consumption.

Stating this during an interface with newspersons here, the vice-chairman of Usha Martin, Prashant Jhawar, said mining from the coal reserves was expected to bear fruit within the next two years. An application for obtaining mining rights for 20 million tonnes of iron ore has also been made to the Jharkhand Government. The State Government's go-ahead in this regard was also expected shortly.

Jhawar said the total investment in the mining initiative was expected to be around Rs 50-60 crore. The investment required would be generated through internal accruals.

He said the company's backward integration project involving the setting up of a 1,00,000 t.p.a. DRI/sponge iron plant and another for a 10 MW captive power plant based on waste heat recovery were progressing on schedule and would be commissioned in May 2004. The cumulative investment in these two projects has been pegged at Rs 110 crore.

During the first half of the current fiscal, Usha Martin has commissioned its facilities for production of steel cord for conveyor belt reinforcement, bright bar and speciality fine wire products. The wire rope plant in the UAE, which has a capacity of 6,000 t.p.a., has already been commissioned in September this year. With this, the company has its manufacturing facilities in Ranchi, Jamshedpur, Thailand, the UK and UAE.

Usha Martin's total income during the six months ended September 30, 2003 stood at Rs 207.06 crore, against Rs 189.03 crore clocked in the corresponding period of 2002. The profit-before-tax during April-September 2003 was Rs 6.44 crore (Rs 3.11 crore). The profit-after-tax during the period under review stood at Rs 4.40 crore (Rs 1.73 crore.
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`Flair' pushes up Ford Ikon sales
Bangalore: The sub-Rs 5 lakh car from Ford has grabbed nearly 50 per cent of the total share of all petrol variants of the company within a couple of months of its launch. Sources in Ford that the 1.3-litre variant, which includes Flair, the Rs 4.95 lakh car, constitutes nearly 55 per cent of all the petrol variants of Ford Ikons. The petrol version itself constitutes nearly 80 per cent of all the variants of Ford cars.

Sources said since the launch of Flair in July, the total number of Ikons sold in September registered a jump in sales of around 40 per cent to 2020 units compared with the same month last year. Between January and September, 2003, Ford sold a total of 13,151 units of Ikons compared with 12,138 units in the same period a year ago. The company expects to sell around 20,000 Ikons during the entire calendar year and export a similar number of units during the same period. Last year, Ford sold around 15,000 units and exported 28,000 units.

Currently, the market share of Ikon in the C segment is between 18 and 20 per cent thereby maintaining the same share it held last year. The new car was launched to draw customers from both the C segment as well as from the D segment. Sources said Ford has also offered customers extremely good financing option for Ikon Flair. Those who bought a B plus segment car two or three years ago could change over to Ikon Flair with similar EMIs (equated monthly instalments). ``Along with customised financial packages from our associated finance companies, customers are in a position to choose monthly payments plans with EMIs comparable to that of small cars,'' sources said.

Ford Ikon Flair is powered by a 1.3 ROCAM engine and has features like power steering, power windows, central door locking, tachometer and full wheel covers. Flair is the only fully-featured Ikon variant under the Rs 5 lakh category among the Ikon variants. The 1.3 CLXI-Endura is the lowest priced Ikon variant at Rs 4.49 lakh but does not have a ROCAM engine. It is based on the Escort platform, which was Ford's first offering in the Indian market before it was phased out. Among the petrol versions, Ikon has six variants with a price range (all ex-showroom prices) between Rs 4.49 lakh and Rs 6.27 lakh. The diesel has two variants, 1.8 NXT priced at Rs 6.58 lakh and 1.8 SXI priced at Rs 7.04 lakh.
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BIFR okays scheme for Textool, LMW merger
New Delhi: The Board for Industrial and Financial Reconstruction (BIFR) has sanctioned a rehabilitation scheme, envisaging merger of the ailing Textool Company Ltd (TCL) with Lakshmi Machine Works Ltd (LMW), the flagship of the Tamil Nadu-based LMW group of Companies.

Sanctioning the merger scheme, the BIFR bench designated ICICI as the monitoring agency (MA).The merger would be effective from April 1, 2003. The Bench also observed that besides the boards of LMW and TCL, the shareholders of LMW have also approved the share exchange ratio as recommended by Ernst & Young.

As per the scheme of amalgamation, one LMW equity share of Rs 100 is proposed to be allotted to shareholders of TCL for every 200 shares of Rs 10 each held by them. The proposal also involves vesting of the two spinning units that are now with TCL, LMW or with its wholly-owned subsidiary or subsidiaries in existence or to be formed, at the option of LMW. Commenting on the rationale of the merger, the sanctioned scheme stated, "In order to leverage on the existing business strength of LMW and complimentary nature of TCL's business, it is proposed to merge TCL with LMW.

After the merger, LMW will utilise the machinery of the textile machinery division of TCL in its manufacturing facility. LMW has been providing support to TCL during the last few years when TCL was incurring losses." In its recent order, the bench noted that, "The dues of all the secured creditors have been settled by LMW and liabilities of the unsecured creditors are being absorbed by it." Further, TCL has not sought any reliefs and concessions from any of the Government agencies except the Directorate of Income Tax (Recovery) (DIT(R)), which has been asked to consider extending benefits under Section 72A of the Income-Tax Act on account of the carry forward of losses of TCL to the merged company, BIFR observed.

TCL's operations were affected since 1997-98 due to recession in the textile industry. The company was supplying textile machinery to medium and small spinning mills. "Due to textile recession, the performance of the spinning mills deteriorated resulting in reduced or nil offtake of machinery from TCL. The performance of the machinery division of the company was also affected due to high labour cost. TCL was referred to BIFR in August 2002 and declared sick in June 2003," the bench observed.
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Gulf Oil Corporation in expansion mode
Mumbai: Hyderabad-based Gulf Oil Corporation Ltd plans to complete work on its specialty chemicals facility by January 2004. The facility is expected to add Rs 150-200 crore to Gulf's topline in the next two years. " Our R&D group has developed six products of which four have already gained market acceptance. We will begin bulk supplies of these niche products to be used in cosmetics and pharmaceutical industries, once the facility is in place. This is expected to add substantially to our turnover," Subhash Pramanik, managing director,said.

The company has invested roughly Rs 20 crore in the R&D plant. It has also lined up an investment of around Rs 25 crore for setting up a 25,000-tonnes a lubes blending plant and another 15,000-tonne plant for manufacturing greases, in Indonesia. The company will hold 36 per cent share in the newly set up joint venture with Tarapur Grease Industries (part of the Standard Greases Group) and Indonesian partner Tawang Swasti Rawikara PT. The joint venture has set a target of acquiring 8 per cent share of the Indonesian market in the first year itself. "The project will come up in three phases and we have begun working on phase one at an investment of Rs 8 crore," Pramanik said. The company has entered a similar joint venture in Bangladesh and is scouting other South-East Asian countries for establishing presence through similar routes.
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