Fresh govt move to pare bad debts
BA to pick up Air-India stake if offered
Mystery buyer stalks Crompton
Big Daddies of insurance face poaching threat
ICI to hive off pharma wing
Buddha quotes figures to showcase state
Rs 60,000 cr software revenue target set for next fiscal
Nine Network, Balaji Telefilms set for merger
Battered Zee Tele reclaims lost ground on bourses
Foreign Exchange, Bullion, Stock Indices

New Delhi, Nov 21: 
As part of its measures to slash the mounting bad debts of the state-owned banks, the government is considering a proposal to extend the foreclosure laws that at present cover housing loans to all other forms of credit either through a separate bankruptcy law or suitable amendments in the Companies Act.

Foreclosure enables the lender to take possession the mortgaged property and auction it to recover the loan when it goes into a default.

Instead of going through the lengthy process of taking a company to the Board for Industrial and Financial Reconstruction (BIFR) for a restructuring package once it turns sick and is unable to pay back past loans, the finance ministry is looking at a shorter mechanism that includes using foreclosure laws and a new authority in place of BIFR which will certify that a company is bankrupt.

The cabinet has already asked concerned ministries to come up with suggestions on how to replace the BIFR.

“The idea is to move towards an international definition of bankruptcy — which will be determined by the inability to repay loans over a certain fixed period of time — instead of defining sickness,” top finance ministry officials said.

They said the aim would be to encourage voluntary winding up and legal separation of the two processes — sale of assets of a bankrupt company and its distribution amongst creditors. While the first should be taken up by court liquidators, the second could be decided by the new authority.

Ministry officials said these steps were urgently needed to help banks speed up their claims on companies which have gone bust. The banking sector is currently saddled with a whopping Rs 53,600 crore in bad loans, or non-performing assets in banking jargon, an increase of 5 per cent over 1999-2000. This is also over 14 per cent of the gross advances made by state run banks.

Normal moves to reduce this huge loan overhang have not succeeded so far. Banks managed to get back just Rs 3,050 crore in NPAs in the first half of this financial year. Nearly 44 per cent of the loans have been made to the corporate sector.

Banks have already been asked to tighten measures to avoid further piling up of bad debts. Monitoring has been made stricter with monthly routines brought in instead of quarterly monitoring of debt recovery.

Bank chief executives have been asked to personally supervise bad debts of Rs 10 crore and above and take quarterly decisions on whether to rehabilitate or restructure loanee companies or to file suits against them.

Banks have also been advised to follow established models such as setting up independent settlement advisory committees headed by high court retired judges to scrutinise and recommend compromise deals with companies which have run up bad debts.    

New Delhi, Nov 21: 
British Airways, which has joined a consortium with NRI businessman L.N. Mittal to bid for the stakes of Air-India, is open to the idea of getting paid back in equity terms for providing technical services to the business group, if the A-I deal is settled.

“Instead of paying us in monetary terms, payments can be made in equity terms too,” Dale Moss, British Airways’ director of sales worldwide, said.

He said discussions were on with Mittal’s Ispat group on these issues and nothing has been finalised as yet. “If the deal goes through, we will sign up a contract (with the Mittals) and discuss the form of payment for providing technical services.”

British Airways has not been known to be with the best of terms with Air-India and Moss said that he was ‘saddened’ that the relationship was not better. He added that BA did not have a revival plan for A-I.

On BA’s relationship with the private carrier Jet Airways, Moss said, “It is a very fine airline and we have an emerging relationship.”

Moss said that BA was contemplating a complete or partial sale of its feeder service. This would be decided by March next year, he said.

While BA’s profits had climbed to £ 200 million and its turnover rose 4.9 per cent to over £ 4800 million, Moss said that rising fuel costs had put pressure on its bottomline. He said the company is incurring a cost of £ 200 million due to rising oil prices.

Describing India as a very profitable but underserved market, he said BA would like to expand its services into India.    

Mumbai, Nov 21: 
Who’s stalking Crompton Greaves Ltd, the Rs 1674.6 crore Thapar-owned electrical equipment maker?

After the hostile raids on Bombay Dyeing and Gesco Corp, the buzz on the street is that almost 6.36 lakh shares which account for 1.22 per cent of the Crompton Greaves equity are parked in the transit accounts of the two leading depositories, NSDL and CDSL, pending credit to the beneficiary.

The normally dormant Crompton Greaves counter has been witnessing a lot of activity in recent days with the share price appreciating by around 36 per cent from Rs 20 to Tuesday’s close of Rs 28.95. In fact, almost 1.81 lakh shares changed hands on the Bombay Stock Exchange today in 759 trades.

However, the Thapars — the promoters of the company — are not unduly worried by the buying since they are sitting pretty with a combined holding of 42.11 per cent.

Greaves Ltd, a Thapar group company holds 28.36 per cent in Crompton Greaves, while its foreign partner Invensys holds 13.75 per cent. Financial institutions continue to hold a sizable 12.75 per cent stake which is about the same as that at the close of the last fiscal. The rest is divided between the foreign institutional investors (FIIs) who hold 5.74 per cent, holders of global depositor receipts (3.19 per cent) and public and others (34.99 per cent).

During the year ended March 31, 2000, the company suffered a whopping net loss of Rs 146.57 crore compared with a net profit of Rs 23.12 crore.

However, it is still a riddle as to who is mopping up shares from the market place. Is it Harish Bhasin and his associates who are taking an exposure in the company, as the market grapevine says? Or, is it some investor from the old school who lays a lot of stress on fundamentals of the company?

The scrip boasts of a book value of Rs 72.20 per share against its market rate of Rs 28.95. The intrinsic value of the scrip is what would have attracted investors, says an analyst.

While company official plead ignorance about the ownership of the parked shares, market circles say that it could be the result of value-based buying by punters.

Meanwhile, Crompton Greaves Ltd has embarked on a major introspection exercise. A restructuring committee has been formed to consider the cost structure and asset management of the company.

It has liquidated its investment in joint venture Skycell Communications for Rs 124 crore and also reduced its manpower by 600 employees through a voluntary retirement scheme. In October, the board cleared the sale of its Worli property for Rs 31.5 crore subject to approvals.    

Mumbai, Nov 21: 
The insurance monoliths, repositories of specialised talent and professionals with skills in short supply, now face one of the toughest challenges they never had to in their long years of sheltered existence and state-bestowed monopoly — prevent rivals from ensnaring their employees.

As a new breed of aggressive private companies starts business, they realise that the easiest way to get people with specialised skills is to prowl the public sector insurance companies.

A spate of resignations by senior Life Insurance Corporation (LIC) is the first sign of a trend where insurance upstarts will do everything they can to get the people they feel are indispensable to business.

Senior LIC officers such as Pritam Singh, executive director (marketing), P. C. Gupta, and an executive director (actuary) have quit. LIC officials insist that they opted for the voluntary retirement scheme (VRS). However, it is learnt that the executives who left have set up consultancies which will help firms tap new opportunities in the sector.

The Insurance regulatory and development Authority (IRDA) has put in place provisions that forbid new companies from poaching on talent available with the PSU insurers, but there are fears that firms will find a way to get around these rules. Services, especially those on the actuarial side, are in great demand and there is a shortage of manpower.

The insurance Big Daddies have put up a brave front. LIC is already talking about leveraging its vast human capital. It is looking at an annual growth of 30 per cent in the coming years.

Officials say an ‘assembly line set up’ will deal with the problem of poaching. According to them, the system will ensure immediate replacements once a slot falls vacant. LIC, they say, takes pride in the fact that it has a 16,000-strong executive cadre.

The employees who put in the papers are immediately assigned less-important tasks during their three-month notice period. However, industry watchers say the private sector companies fishes for the talented among the professionals, especially those who possess specialised skills in areas such as actuarial sciences, which are currently in short supply.    

Calcutta, Nov 21: 
ICI India, the Rs 873.12-crore diversified subsidiary of ICI plc, is planning to hive off its pharmaceutical division into a separate joint venture. The company has initiated informal talks with the UK-based pharma major Astra-Zeneca for the proposed joint venture.

The move is part of ICI India’s restructuring plan initiated to separate the non-core areas from the company’s main line businesses, including decorative and refinish paints, adhesive and food starches.

ICI India executive director, Daljit Singh, said the pharma division which produces high-end drugs, has been a profit making venture. “But,” he added, “in the long run, the business needs strong technological support to face the intense competition in the pharmaceutical market.”

ICI India’s UK parent had long ago spun off the pharma division into Zeneca, but the business continued to be under the ICI banner in South Korea, Taiwan, Australia and Pakistan.

Singh said the Indian subsidiary did not discontinue the pharma business due to its profitability. “We have an agreement with Zeneca by which we can source the bulk drug and formulations. But for new formulations, we will have to draw up a fresh arrangement,” he said.

ICI India chairman A. Ganguly also added that the pharmaceutical business was amongst the fastest growing and the most profitable.

The business portfolio of this division includes both human and veterinary pharmaceuticals. The company has a state-of-the-art manufacturing facility at Ennore near Madras, which makes both bulk drugs and formulations.

The company also exports its bulk drugs and plans to enter the international formulations market through its strategic partner in the joint venture.

Singh added that talks with Zeneca were still at a very nascent stage and there was no question of carrying out a due diligence of operations at the moment.

ICI India already has already divested businesses like explosives, motor and industrial paints and polyurethanes. Like pharma, the company is also likely to spin off rubber chemicals and nitro-cellulose division into independent units for further growth.

Besides, the decorative paint division, which is the company’s growth engine, is being given a strong push to raise the market share from the existing 12 per cent. The refinish paint market is also offering great potential, Singh said.

Meanwhile, the company is in the process of offering voluntary retirement scheme to over 200 employees at its Rishra factory, which is being transferred into a joint venture with Berger Paints. Singh said the a large number of employees working in the rubber chemicals division in the Rishra plant became surplus after the company had ceased making several products.    

Calcutta, Nov 21: 
Bengal chief minister Buddhadeb Bhattacharjee today invited companies to pour in more funds in the state, saying their participation was required to catalyse industrial development.

Addressing the 146th annual general meeting of Bengal Chamber of Commerce and Industry, he said there had been a quantum leap in investments made in projects implemented this year.

In all, 338 projects were implemented up to February-March 2000, but the figure soared to 393 at the end of August — 55 of them in the space of four months. Investments surged a record 94 per cent from Rs 8,138 crore to Rs 16,807 crore.

Of the 55 projects that Bhattacharjee talked about, the bulk of the investment (Rs 6,770 crore) was absorbed by Haldia Petrochemicals and Mitsubishi Chemicals — the state’s two key showpiece projects.

Industrial approvals, Bhattacharjee said, were up 16 per cent between April and September; investments swelled 15 per cent. “According to figures compiled till September 30, industrial approvals were up by 323 at 2,354, a 16 per cent increase in six months. Investments went up from Rs 47,394 crore to Rs 54,406 crore.”

The chief minister said infotech will underpin the state’s efforts to bring about an industrial renaissance. Indications that this will happen were sent out when Bhattacharjee signed a land-allotment to Wipro on his first day in office. The company will set up a software development facility at Salt Lake.

Bhattacharjee listed Tata Consultancy Services, Price Waterhouse, Cognizant Technology, Sema and R S Software among the other big technology firms which had invested in Bengal.

Commenting on the performance of the state’s infotech industry, the chief minister said their exports in 1999-2000 were worth Rs 700 crore. He expected it to increase further this year.

He said the state government could claim credit for having turned around sick public sector companies, such as Westinghouse Saxby Farmer, Saraswaty Press and Shalimar Works.

He criticised the central government for closing down Weighbird India, MAMC, Cycle Corporation of India, and Bharat Process and Mechanical Engineers, saying the decisions will have an adverse impact on the economy of the state. Bhattacharjee said his government would follow the footsteps of his predecessor, Jyoti Basu. “His policies will be guiding the present government,” the chief minister said.

The former chief minister, Jyoti Basu, who felicitated by the BCCI, sought to instill a sense of confidence among industrialists, saying Bhattacharjee was an experienced hand who had been taking keen interest in the industrial development of the state.

Bengal, Basu said, had made good progress on the industrial front, and the positive aspects outweighed the negative ones’’. Quoting recent World Bank and UNDP reports, he said poverty had been reduced to a large extent in the state.

The outgoing president of Bengal Chamber of Commerce, B D Bose, said the infrastructure of the state had to be improved for it to attract foreign investment. He paid rich tributes to Jyoti Basu, whom he described as an ‘illustrious son of Bengal’.    

New Delhi, Nov 21: 
The Indian software industry has set a revenue target of Rs 60,000 crore for the next financial year. While approximately Rs 44,000 crore will come from exports, the National Association of Software and Services Companies (Nasscom) expects the domestic market to contribute Rs 16,000 crore.

According to Nasscom president Dewang Mehta, “during 2001-02 the most promising software export segment is expected to be e-commerce solutions, generating about Rs 10,000 crore of revenue. Another important segment is telecom software, including network solutions and solutions for wireless Internet.”

“In the domestic market, the emerging areas are e-governance, e-banking and digital content development.”

On venture capital funds, Mehta said, “there has been no slowdown in venture capital flows and liquidity conditions in the Indian marketplace. On the contrary, we expect, venture capital and private equity inflows of Rs 65,000 crore in 2001-02 compared with Rs 32,000 crore investments in the current year.

However, there has been a visible shift in investments of venture capital funds from dotcom to software and emerging technologies.”

Mehta also announced that Nasscom will set up an 11-member task force consisting of industry captains who will invest about $ 1 billion to generate about five lakh infotech professionals by 2006. At present, there are about 1.78 lakh infotech professionals in the country.

On the premiere infotech fair, Nasscom 2001, to be held in Mumbai in February next year, Mehta said, “the event will provide the Indian software and services industry with a roadmap to achieve its revenue projections of Rs 60,000 crore for 2001-02 and Rs 4,00,000 crore in 2008.”

“Nasscom 2001 will be the largest and most comprehensive infotech event ever staged in India with the basic theme of evolving strategies for the digital economy,” Mehta said.

“India is still to emerge as an important destination for major fairs. We need to allow foreign airlines to land in Bangalore, Hyderabad and Pune and also enhance the airports to meet the international standards. We will take up this issue with the ministry of civil aviation,” he added.

Nasscom 2001 will focus on issues such as increasing the size of domestic and export markets, enhancing physical and telecom infrastructure, increasing quality and quantity of infotech professionals and enhancing investment in creating original technology as well as research and development.

The event will consist of an in international infotech business conference, international infotech exhibition, a conference on emerging technologies, a venture capital forum and an e-summit, Mehta said.

The topical to be covered at the conference include new outsourcing model, infotech trends, e-governance, e-commerce solutions, telecom software, e-banking, multimedia, animation, human resources, valuations, mergers & acquisitions and non-tariff measures.

“The Nasscom 2001 exhibition is expected to have more than 200 exhibitors spread over an area of 20,000 sq mts and will attract 2.5 lakh visitors,” Mehta said.    

Mumbai, Nov 21: 
Nine Network Entertainment India, a wholly owned subsidiary of Nine Broadcasting India, is merging with Balaji Telefilms. Nine Broadcasting is a company promoted by HFCL and Channel Nine.

The swap ratio for the merger has been proposed at 65 shares of Balaji for every 200 shares of Nine Network Entertainment.

After the merger, the two representatives of Nine Broadcasting India, Ravina Kohli and Anthony Klok, will join the Balaji board. The amalgamation will increase Balaji’s share capital by 2.6 million shares, and will give Nine Broadcasting India a 20 per cent stake in the company.

Balaji said in a release issued here today that it would continue to be independent in developing software for channels. The company, run by cine-star Jeetendra, offers 34 hours of television software development for channels such as Doordarshan, Star TV, Sony TV, Zee TV, Gemini TV and Udaya TV.

It recently launched a public issue of 2.8 million shares at a price of Rs 130 per share to raise funds for investments in infrastructure. This will help it meet the growing demand for television software. The scrip will be listed on the BSE tomorrow.

On the other hand, Nine Network Entertainment India has been established to develop software for Nine Broadcasting India. Balaji said both companies will seek approval from respective shareholders and other statutory authorities to effect the merger. They were advised by Triumph International Finance on ways to seal the transaction.

At present, Balaji produces a number of serials such as Hum Paanch, Kyon Ki Saas Bhi Kabhi Bahu Thi, Kahani Ghar Ghar Ki, Kanyadaan, Ghar Ek Mandir, Karma. In regional languages too, it has several popular serials in its stable. These include Kulaa Villaakku, Kalsisundamra and Pavitrabandham.    

Mumbai, Nov 21: 
The Zee Telefilms share has sprung to life, touching off intense market speculation over the reasons why investors, who had dumped the stock in recent times and left it bruised on bourses, are suddenly taking a shine to it.

These are not ordinary times. Any scrip that perks up sets off alarm bells pealing over a cloak-and-dagger takeover attempt, and predators lurking around in the trading ring.

Mavens see it differently though. At a time when the deadlocked US Presidential race and slowdown worries have kept foreign institutional investors (FIIs) subdued in their stock picking, many say the only reason why the Zee share is moving up is that it has already tested its bottom. It couldn’t go lower, it had to improve. And, bargain-hunters on the prowl saw a window of opportunity in the infotech major.

“It is difficult to explain the buying. One major factor could be that the stock has been beaten to the dumps, and therefore, it is only natural that there would be brisk buying at these levels,” said Amol Dhariya, a media analyst at HDFC Bank.

Many brokers attribute much of the purchases to reports swirling in the market about the company having virtually completing a partial divestment in its subsidiary, Siti Cable.

The Zee scrip, which today opened at Rs 276.40 and rose to its intra-day high of Rs 286.40, had slipped to an intra-day low of Rs 270. However, there was buying at the lower levels during the later half of the session, propelling the scrip higher to Rs 286.05 at the close. The counter saw 100.87 lakh shares traded with a total value of Rs 280.37 crore.

Purchases in the Zee Telefilms share pushed up the BSE sensitive index, which was oscillating in a small range of 3928.58 and 3882.65, to its closing level of 3924.70 today, a mild 1.82 point loss compared with Monday’s finish of 3,926.

The markets were subdued at the initial stages following the 152-point downslide in the Nasdaq Composite Index on Monday. Apart from Zee, DSQ Software and ITC Ltd among others were some of the share that recorded good gains.    


Foreign Exchange

US $1	Rs. 46.81	HK $1	Rs.  6.00*
UK £1	Rs. 66.59	SW Fr 1	Rs. 25.80*
Euro	Rs. 39.82	Sing $1	Rs. 26.35*
Yen 100	Rs. 42.47	Aus $1	Rs. 23.70*
*SBI TC buying rates; others are forex market closing rates


Calcutta			  Bombay

Gold Std (10gm)	Rs. 4565  Gold Std (10 gm)Rs. 4490
Gold 22 carat	Rs. 4310  Gold 22 carat	 Rs. 4145
Silver bar (Kg)	Rs. 7750  Silver (Kg)	 Rs. 7845
Silver portion	Rs. 7850  Silver portion	 Rs. 7850

Stock Indices

Sensex		3924.70		-1.82
BSE-100		2029.04		+6.97
S&P CNX Nifty	1235.00		-2.60
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