Fresh bids for two IPCL units
Sterlite to buy two mines in Australia
Sinha rubbishes slowdown talks
Finolex readies plan to buy back shares

 
 
FRESH BIDS FOR TWO IPCL UNITS 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, Nov 18: 
The Cabinet committee on disinvestment (CCD) today decided to ask for fresh bids for IPCL after hiving off the Baroda unit of the petro-chemical major to Indian Oil Corporation.

Reliance and Chatterjee-Soros which had earlier been shortlisted as possible buyers of IPCL, will have to bid once again if they remain interested. Minus the Baroda unit, which is the oldest of the three plants, IPCL is actually expected to be an even more attractive buy, especially as its reserves would be bolstered by the money IOC pays for the Baroda plant. Interestingly, minister of state for disinvestment Arun Shourie admitted that he had informed Reliance group chief Anil Ambani that this was one of the options being mulled over by the government.

He, however, did not accept suggestions by mediapersons that IOC was being “burdened” with the Baroda unit. Instead, he argued that it made sense to sell this to IOC as it had a naphtha unit in close proximity to IPCL’s Baroda plant which was actually built as a raw material source for it. The two plants which will now be offered to bidders are Nagotahne gas cracker unit in Maharashtra and Gandhar unit in Gujarat. The plan is to offer a 25 per cent stake to the successful bidder who will also gain management control.

Shourie added that IOC too would be eligible to bid for IPCL when it is put up for sale again. The price of the Baroda plant would be finalised by the petroleum ministry, petrochemicals ministry and IOC.

The CCD has also decided to provide a financial restructuring package before divesting its stake in Paradeep Phosphates Ltd to get a good price. Shourie said the PPL urgently required financial assistance otherwise the company would go sick and become a BIFR case.

The CCD today also reviewed the implementation process of earlier disinvestment decisions of Air-India, Indian Airlines and IBP. It has decided that the Cabinet secretary would follow up all the unresolved issues or roadblocks in these cases with the help of the administrative ministry, disinvestment secretary and finance ministry officials.    


 
 
STERLITE TO BUY TWO MINES IN AUSTRALIA 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Nov18: 
Sterlite Industries (India) Ltd has decided to acquire two mines in Australia to meet its requirements of copper concentrates for its smelter The all-cash deal, which is valued at $ 43.5 million, was cleared by the Sterlite board today.

The acquisitions will be funded from its internal accruals, the company said in a notice sent to the stock exchanges.

At present, Sterlite sources its entire requirement of copper concentrates through imports from producers and traders around the world.

In view of the large requirement of concentrates for the smelter and to reduce dependence on external sources, the company has decided to possess its own copper mines. Consequent to this, Sterlite examined various proposals and zeroed in on two mines in Australia.

These two mines are expected to provide around 50 per cent of the total concentrate requirement of Sterlite.    


 
 
SINHA RUBBISHES SLOWDOWN TALKS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Nov 18: 
Finance minister Yashwant Sinha today said the slowdown in the first quarter of this year is being ‘blown out of proportion’ and ruled out any changes in the income-tax rates in the next budget. Lashing out at economists who have been painting a grim picture, Sinha said, “The slowdown (in the first quarter) is being projected as though there is a catastrophe, which is not true, as is evident from the fact that revenues are buoyant.”

He was speaking at the sidelines of the income tax commissioners’ conference here.

Sinha was confident that as in the past, all projections of a lower growth this year would be proved wrong.

On the income tax rates, Sinha added, “We have very moderate rates of income tax. There is no need to fiddle about with the (existing) rates in the forthcoming budget. The main challenge is better tax compliance, certainly not the tax rates.”

“We have to modernise methods and computerise to increase compliance and tax base,” he said, adding that the target for the number of income tax assessees would have to be doubled to 50 million by 2003-04. Though there has been an increase in the number of assessees to 2.5 crore, “we should prepare a concrete and clear cut scheme to achieve the new target in three years,” he said.

Tax avoidance and evasion are major challenges before tax authorities at present, Sinha said, adding that they have to identify the circles which have reported negative growth in tax collection and take steps to overcome the sluggishness.

On sales tax reforms, Sinha said the Centre was in touch with state chief ministers to carry out sales tax rationalisation.

Referring to the demands from various state governments for more allocations especially during natural calamities, the finance minister said, “This (demand for additional funds) is not a sustainable system. The only way the situation can be improved is by raising revenue.”    


 
 
FINOLEX READIES PLAN TO BUY BACK SHARES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Nov 18: 
The P P Chhabria-owned Finolex Industries Ltd is planning to buy back its equity shares. A board meeting has been scheduled for November 27 to consider the proposal. While a notice to this effect was sent to the stock exchanges today, senior Finolex officials refused to comment either on the size of the issue or its likely price. The proposal if implemented, is expected to increase the promoters’ shareholding, which currently stands at 51 per cent. Finolex has an equity capital of Rs 150 crore.

Speaking to The Telegraph, P B Parasnis, vice-president (finance) & company secretary, said that a decision in this regard will be taken by the board on November 27.

“The decision to consider a buy-back was taken by the management. I cannot reveal any other details on this issue since the board meeting is yet to take place,” he added.

On the BSE yesterday, the Finolex scrip closed higher at Rs 21.50 after opening at Rs 19.95. The 52-week high/low value of the share stood at Rs 41 and Rs 12 respectively.

Finolex Industries’ move to buy-back shares follow a similar decision by other corporates prominent among them being Bajaj Auto, Reliance Industries, Sterlite Industries and Great Eastern Shipping Company Ltd.

Finolex Industries is a major player in the domestic polyvinyl chloride (PVC) resin industry. It is also present in the PVC pipes and tubes business. The company is now contemplating to produce raw fibre optic used in the production of raw fibre optic cables, for which it was scouting for an overseas partner.

Followed the exit of its joint venture partner Lucent Technologies International Inc from Lucent Technologies Finolex India, Finolex was unable to obtain the technology to produce the raw fibre. It also found it difficult to source the raw fibre from the global markets.

The company had earlier this year drawn out a Rs 30 capital expenditure plan which includes enhancing its PVC manufacturing capacity to 40,000 tonnes from 30,000 tonnes.    

 

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