Section 43B amendment to affect CDR firms
Mumbai: Increased clarity about the various budget proposals two days after the budget, the euphoria in the corporate sector is getting muted. The proposed amendment in section 43B of the Financial Bill has raised concerns among companies (which deals with deferred interest payment).

According to the amendments guidelines on corporate debt restructuring (CDR) mechanism would be modified. There are around 120 companies registered under the CDR package, working their way out of the red and now they will have to spend up more money to get back in the black. The steel industry, which has the highest debt under CDR, would be the worst hit.

About Rs64,258 crore worth debt is being reworked under CDR. Iron and steel industry accounts for 40 per cent of this. From this sector, 15 companies are under the CDR programme with debts amounting to Rs28,373 crore.

Earlier, instead of paying the interest overdue on loans, the companies used to convert it into another term loan, which could be used for tax purposes while computing income. But now, unless they actually pay the interest, the companies can't avail of it to use for tax purposes said an official from a prominent accounting firm.

In other words, with the amendment, the taxable income will go up and tax outflow from the company will increase. The constructive payment of the loans will be no longer permissible said a company official from a steel firm.

To make matters worse, the amendment has brought in the 'retrospective effect' clause from 1989 in case of loan and borrowing, and from 1997 for loans and advances.
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IOC sells 50 per cent of its stake in GAIL
New Delhi: Indian Oil Corporation Ltd (IOC) has sold 50 per cent of its stake in GAIL (India) thereby making a profit of about Rs430 crore.

IOC has sold its stake to repay debts and raise money for expansion plans. The company sold its stake for Rs561 crore to various domestic and overseas financial institutions including Life Insurance Corporation and ICICI Prudential. It sold 2.04 crore shares at Rs275 per share, which represents 2.41 per cent shareholding of GAIL. IOC had bought GAIL shares in 1999 at Rs60 per share, thus making a profit of almost Rs215 per share.

Company official said the sale would help to retire IOC's Rs18,960-crore market borrowings and raise money for expansion plans. The company had received its board's approval in December last year to offload 20 per cent of its holding in ONGC and
50 per cent of its stake in the gas transmission company GAIL.

Before the sale, IOC held 4.08-crore equity shares or 4.83 per cent in GAIL. It also has 13.7-crore equity shares or 9.61 per cent stake in ONGC.

JM Morgan Stanley and Citi Financials were the two merchant bankers for the sale of its shares in ONGC and GAIL.

IOc registered a net loss of Rs5.83 crore for the third quarter of the current financial year ended December 2005, against a net profit of Rs1,286.76 crore for the same quarter in the previous year.

As regards its 20 per cent stake in ONGC, company officials said the sale would be determined through a book building process depending upon the market price of ONGC.
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RCoVL got Rs372 crore against promised Rs3,100 crore: Anil Ambani
Mumbai: Just a few days ahead of its listing on March 6, the Anil Ambani-owned Reliance Communication Ventures (RCoVL) has accused Reliance Industries of going back on its commitment to provide Rs3,100 crore in cash.

Reliance Communication Ventures filed an information memorandum to the stock exchanges saying Reliance Industries transferred only Rs372.08 crore in cash and the balance Rs2,727.92 crore in the form of deep discount bonds of Reliance Communication Infrastructure was still held by RIL.

The company said Reliance Industries transferred the amount to Reliance Communication Ventures, when it was under its control, without informing the representative of the Anil Ambani group on the board, the company mentioned in the information memorandum.

"As part of the reorganisation of the Reliance group, as agreed between Mukesh Ambani and Anil Ambani, the former has to continue support to Reliance Communication Ventures and its affiliates in the shape of export obligations against import of goods and services under the EPCG scheme of the government, up to Rs10,000 crore from April 1, 2005 to March 31, 2007," it said.

"But Reliance has not yet executed any agreement in connection with this obligation. The reconstituted board has decided to take appropriate steps to enter into appropriate agreements with Reliance in line with the agreed position to protect the interests of the company and its shareholders," Reliance Communication Ventures said.
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Telecom cos cut ISD rates by up to 50 per cent
New Delhi: Airtel and Idea Cellular have reduced international long distance (ISD) tariffs by up to 50 per cent.

Airtel has dropped tariffs for ISD calls to Rs7.20 per minute compared to Rs14.24 per minute currently charged. Telephone calls to the Gulf and African countries will now be available for Airtel subscribers at Rs9.99 a minute compared to the current rate of
Rs19 a minute.

Idea Cellular has also reduced its ISD tariffs to Rs7.50 a minute for ISD calls to USA, UK and Canada and Rs10 a minute for calls to Africa, SAARC, Asia and Europe. Rates for ISD calls to other countries will remain at Rs40 a minute for both Airtel and Idea users.

The move comes after the Telecom Regulatory Authority of India decreased the access deficit charge on outgoing ISD calls by Rs1.70 a minute. However, the operators have dropped the tariffs more than the reduction in the ADC charges effected by the telecom regulator last week.

Airtel, Hutch and Idea Cellular have also announced their versions of One India plan, which offers STD rates at Re1 a minute. The Hutch offer will allow its subscribers to make STD calls to any destination at Re1 a minute. Subscribers can avail themselves of the offer by paying an additional charge of Rs250 a month over and above what they are already paying. The plan is being offered to both post-paid and prepaid customers of Hutch across all its circles from March 4.
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Reliance Infocomm`s losses mount to Rs2,686 crore
Mumbai: Reliance Infocomm and Reliance Communication Infrastructure showed accumulated losses of Rs4,890.85 crore as on December 31, 2005. According to the information memorandum of Reliance Communication Ventures, the losses of Reliance Infocomm stood at Rs2,685.87 crore and that of Reliance Communication Infrastructure at Rs2,204.98 crore.

The information memorandum also said some of the group's operating companies might continue to incur net losses in the foreseeable future.

Reliance Infocomm and Reliance Communication Infrastructure have approved write-offs and provisions for Rs2,382.93 crore and Rs2,104.20 crore, respectively. These write-offs are related to bad debts, inventories, impairment of assets and other non-recurring expenditures, for the period up to March 31, 2005.
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Sical to issue GDRs, convertible bonds to raise funds of $125 million
Chennai: Sical Logistics (formerly South India Corporation Agencies Ltd) is planning to raise about Rs550 crore ($125 million) through a mix of foreign currency convertible bonds and global depository receipts.

According to a company press release, the funds will be used towards the coal and iron ore terminal project being set up on build-operate-transfer basis at Ennore; for container trains on all-India licence for the Jawaharlal Nehru Port-Delhi and three other sectors; offshore logistics; trucking; and working capital. The release said that the company's earlier plan for a rights issue of shares, preferential allotment and convertible warrants had been cancelled.

The company would seek its shareholders' approval at an extraordinary general meeting on March 29.
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Roche gets product patent on Hepatitis C
Mumbai: Roche, the Swiss-pharma company, has received the country's first product patent on its Hepatitis C drug Pegasys.

Pegylated interferon alfa-2a reduces the frequency of injections that a patient has to take to one a week, as compared to the earlier practice of three a week.

Dr G.L.Telang, managing director Roche India said there were no generic versions of the product in the market.

Pegasys was launched in India in 2003 and treatment cost is Rs2.25 lakh for six months. The total cost includes cost of therapy, testing, monitoring and follow-up, besides the cost of the drug itself. Ribavirin, another medicine used in some cases with Pegasys, is also bundled into this package, Dr Telang said.

According to doctors Hepatitis C is a blood-borne infectious disease affecting the liver and is often referred to as a `hidden epidemic', as it takes years before symptoms develop. India has an estimated 10.9 million people suffering from chronic hepatitis C and the illness affects 3 per cent of the world's population.
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Marksans Pharma acquires Australian company
Mumbai: Marksans Pharma plans to acquire a majority stake in Australian company Nova Pharmaceuticals Australasia PTY Ltd.

The move would help Marksans Pharma leverage its manufacturing capabilities and strengthen its global foothold, the company told the BSE. Marksans has a manufacturing facility with regulatory approvals from Australia and the Nova acquisition will provide a synergy, the company said. The Australian pharmaceutical market is growing as the demand for medicine continues to rise.
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Bannari Amman to manufacture bio-diesel
Coimbatore: Bannari Amman group will soon begun manufacturing bio-diesel as it is setting up a plant at Sathyamangalam with a daily crushing capacity of 3,000 litres. Commercial production at the plant is expected to commence in July. The company's chairman, S.V. Balasubramaniam said the plant would crush jatropha, neem and pungamia seeds for extraction of the bio-diesel.

He said the company is eventually planning to enhance the crushing capacity ten-fold, by expanding the area under jatropha in a phased manner. "We have currently cultivated jatropha in 2,000 acres and the area is expected to double by June this year.

The company has incentivised growers to take to jatropha cultivation by offering them crop insurance and finance assistance at 7.5 per cent.

He said marketing the product would not be a problem as there is demand for bio-diesel all over the world because of the commitment made by countries to the Kyoto Protocol coupled with the rising cost of the crude oil.
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Bajaj February 2, 3-wheeler sales rise 30 per cent
Mumbai: Bajaj Auto has registered a 30-per cent increase in sale of two and three-wheelers for February. Vehicle sales rose to 2,05,776 units from the previous year's corresponding 1,58,129 units. Sale of 2-wheelers rose 29 per cent at 1,79,880 units (1,39,573 units for the year-ago period), including a 35 per cent gain in motorcycle sales to 1,75,256 units (1,29,409 units).

Three-wheeler sales moved up 40 per cent to 25,896 units (18,556 units). Vehicle exports increased 37 per cent to 26,237 units (19,204 units). During April 2005 - February 2006, the total sale of 2&3-wheelers was up 24 per cent at 20,67,443 units (16,63,115 units). Sale of 2-wheelers rose 26 per cent to 18,40,160 units (14,59,884 units) including a 31-per cent gain in motorcycle sales to 17,28,297 units (13,15,003 units).
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Tata Motors Feb sales up 22 per cent
Mumbai: Tata Motors has reported a 22 per cent increase in total vehicle sales (including exports) for February 2006 to 45,114 units from the previous year's corresponding 36,977 units.

Domestic sale of commercial vehicles was up by 30 per cent to 22,885 units (17,656 units), including M&HCV sales at 13,662 units and LCVs at 9,223 units.

Passenger vehicle sales were up 12.1 per cent to 17,972 units - Indica sales were up 15.3 per cent at 10,548 units and the Indigo family up 3.8 per cent at 3,653 units. Sumo and Safari accounted for sales of 3,771 units, a growth of 12.2 per cent.

Vehicle exports for the month were up 29.4 per cent at 4,257 units (3,290 units).
So far, the company's total sales were up 12.1 per cent at 3, 97,933 units, the statement said.
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Honda sales Feb sales rise 24 per cent
New Delhi: Honda Siel Cars India has reported a 24 per cent sales growth in February 2006 over February 2005. The company sold 2,200 units compared with 1,775 units earlier. Sales comprised 2,077 units of the Honda City, 97 units of the Accord, and 26 units of the CRV.

The company said February is traditionally a low-sales month for the automobile industry because customers usually postpone their car purchases till after the Budget.
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Ford India registers 47 per cent sales growth over 2005
Chennai: Ford India has registered a 47 per cent growth in year-on-year sales with 3,023 units sold in February 2006 against 2,062 in the same month last year, according to a press release from the company. The company said its recent offering, the four-door Fiesta, was driving the growth.

Through Fiesta the company launched its proprietary Turbo Direct Common Rail injection (TDCi) technology, a new generation in common rail diesel engine in India. TDCi enables improved acceleration, fuel economy and reduced emissions, the release said.
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India Cements to issue FCCbs to raise $75 million
Chennai: India Cements has informed the stock exchanges that its board will meet on March 13 to consider issue of foreign currency convertible bonds or other securities. The company is said to be considering raising between $50 million and $75 million (Rs220 crore and Rs330 crore) through the convertible bonds issue. The money will be used only for capital expenditure, to improve facilities at existing plants.

According to sources, the company is looking at acquiring limestone mining leases in north India, either in Himachal Pradesh or Rajasthan.

The company's ownership structure is also undergoing a change with one set of promoters — the Sanmar group — selling a large part of its stake to the other set of promoters — N Srinivasan, vice-chairman and managing director, and N Ramachandran, executive director of the company.

The Sanmar group is selling 4.19 per cent of its stake to the co-promoters and after the sales the Sanmar group will be left with a 3.61 per cent stake in India Cements, while the promoters' shareholding will remain unchanged at 31.06 per cent.

India Cements' shares closed on Thursday at Rs148.95, a 4.37 per cent drop from Wednesday's closing price of Rs155.75.
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Bangalore Intl Airport ties up with IOC for fuel station
Mumbai: Bangalore International Airport is partnering with Indian Oil Corporation (IOC)-led consortium for an aviation fuel facility to be set up at the new airport coming up at Devanahalli.

The company has signed a 20-year contract with IOC and its consortium partners Skytanking Holding and IndianOil Tanking who plan to invest Rs90 crore in the facility.

The consortium will look after the design, construction, financing and operation of the proposed facility. The model allows every qualified fuel supplier to use the facility against a fixed throughput fee and also allows airlines to get the best fuel prices available in the market.

Siemens Projects Ventures (40 per cent), Larsen and Toubro (17 per cent) and Unique Zurich Airport (17 per cent) are other promoters of the venture.
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IDFC Private Equity to acquire 8 per cent stake in Delhi airport
Mumbai: India Development Fund, a private equity fund promoted by IDFC Private Equity, will pick up an 8 per cent stake in the Delhi airport modernisation project, awarded to the GMR Group recently.

Luis Miranda, president and CEO, IDFC Private Equity refused to divulge the amount involved, saying that the exact amount will be known only after the completion of the project.

The GMR group formed a consortium along with Fraport (which operates Frankfurt airport), Malaysia airport and IDFC for the Delhi airport modernisation project.
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