Guj Ambuja vows to trim debt
Bombay Dyeing buyback buzz gets louder
Zee steals the show on bourses
Lobbies at work to dilute jute order
BSNL hastens city cell launch
Sterlite frontrunner in race for optic fibre deal
Govt move may choke Texmaco operations
Philips open offer for Punjab Lamps
Carlson to set up 12 country inns
Foreign Exchange, Bullion, Stock Indices

 
 
GUJ AMBUJA VOWS TO TRIM DEBT 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 24: 
Gujarat Ambuja Cements (GACL) said today it intends to use the money raised from the sale of its stake to Warburg Pincus to work off its massive debt pile, expected to touch a staggering Rs 1,550 crore next month.

The announcement by the company, which had earlier said the proceeds from the stake sale would go towards financing its capital expenditure plans, was welcomed by analysts who have voiced concern about its soaring debt levels.

Much of that increase has been fuelled by loans taken to acquire 14.4 per cent in ACC in a two-step deal closed last year. It will receive Rs 200 crore of the Rs 360-crore ($ 77 million) from the deal as payment in the first tranche. Senior company officials confirmed the plan to bring down debt, but refused to say how much of it will be reduced.

“The exact amount is yet to be decided. We certainly want to reduce our debt levels and bring down our interest costs. However, we have not worked out the details,” a source said.

A company official said capital expenditure will remain one of the priorities, but the focus will now shift to setting up a plant in Maharashtra with a capacity of 2 million tonnes.

The plan for a 2-million tonne per annum unit in Andhra Pradesh has been shelved, and work on it is unlikely to start until 2003.

The plant would have helped it cater to the southern region. At present, all resources and time are being devoted to the Chandrapur unit in Maharashtra.

GACL has set aside Rs 725 crore for capital expenditure, which includes Rs 650 crore for the Maharashtra unit and around Rs 75 crore earmarked for a plant in Punjab. Its total capacity, pegged at over 9.5 million tonnes now, is expected to rise to 12 million tonnes after the Chandrapur unit goes on stream.

Last week, the firm wrapped up a deal in which it gave Warburg Pincus, a foreign investment house, a 9.8 per cent stake.

The transaction entails the issue of 80 lakh equity shares to an affiliate of the investment firm at a price of Rs 225 each. In addition, it issued 80 lakh warrants, which will be converted into an equal number of equity shares at the same price.

At that point of time, the company had said the funds raised will help meet its current capital expenditure and give it the resources required to pursue other growth opportunities. It did not elaborate what such ‘opportunities’ meant.

Speculation swirled that the cash raised from the sale of equity would give it the financial muscle to go ahead with an open offer for ACC shares, but officials denied any such move.

However, a section of capital market not convinced about Ambuja’s clarifications still expects it to happen. If the open offer gives it enough shares to wrest control of management in ACC, GACL is likely to drop the Andhra unit plan.

   

 
 
BOMBAY DYEING BUYBACK BUZZ GETS LOUDER 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 24: 
The flood of buyback plans, with promoters rushing to guard their flanks against corporate raiders, has given rise to speculations on the list of probables planning to strengthen their hold over their companies.

Poised to join the bandwagon is the Nusli Wadia-owned textile and petrochemical major, Bombay Dyeing and Manufacturing Company Ltd, which is said to have been weighing a buyback programme.

Market observers say that the firm, which hit the headlines a few months back following acquisition of a stake in the company by jute baron, Arun Bajoria, is now likely to opt for a buyback programme to ward off any hostile acquisitions in the future.

Though speculations on this count have been on the rise since November last year, the company had then clarified that no decision had been taken to hike the promoters’ stake, which is currently put at around 40 per cent. When contacted, a senior Bombay Dyeing official denied the company was contemplating any move to buy back its shares.

“We are not considering any such proposal now. If at all we do, the stock exchanges will be informed,” he told The Telegraph.The Bombay Dyeing scrip today closed at Rs 42.60 on the Bombay Stock Exchange (BSE), with reasonably good volumes. The scrip, which opened at Rs 42.65 and touched a high of Rs 43.40, witnessed around 961 trades.

The latest buyback spree commenced with the raid on Bombay Dyeing last year, when Bajoria cornered around a 13.5 per cent stake in the company. Reports subsequently said the jute baron had scaled down his stake by over 8 per cent. The company, which in the past few years, was hit by the poor state of the textile and petrochemicals industry, has, in recent times, put in a better performance.

Talks of a buy-back offer from the Wadia family have now grown in the light of many corporates, particularly the multinational ones, consolidating their holdings by taking advantage of the relatively low share prices.

Several others are expected to join the bandwagon in the next few months. Market circles feel some of the potential candidates in this regard could be Ingersoll Rand and Gillette, among others.

   

 
 
ZEE STEALS THE SHOW ON BOURSES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 24: 
Zee Telefilms, which announced on Wednesday that it was in search of a partner, roared on stock exchanges today, its share price vaulting over 4 per cent as investors flocked to a scrip they felt was turning into a good bet.

The surge came on a day when Dalal Street turned in tepid trading numbers — the sensex closing at 3683.20 in a modest 8.66-point gain over its previous finish of 3674.54. The share, a big draw on Bombay Stock Exchange and National Stock Exchange, is expected to extend its gains as more details about the media major’s plan to offer a part of its equity to a partner emerge.

On the BSE, the scrip opened at Rs 132.15, hit the upper-end circuit filter of 8 per cent at Rs 141.85, but lost some of those gains in the later half of the session and ended 4.11 per cent higher at Rs 136.85. Volumes were high with 73 lakh shares changing hands.

Zee has said it is ready to offer a portion of its equity to a strategic partner who will give it greater access to overseas markets.

Market analysts had expected a spike in share price after the announcement, but some said they would like to wait for some time before they can say with confidence that the spurt will be sustained.

“By all accounts, the scrip will see an increase in buying interest. However, much will depend on whether the company makes new announcements and comes up with something more than an expression of intent,” an analyst said.

There is a small section of more hard-nosed analysts which has taken the announcement with a pinch of salt. One of them welcomed the search for an ally, but said the manner in which the company executes the plan will be crucial.

He pointed to the fact that Zee has been looking around for a partner for its cable business for more than a year, but has not made the selection.

“The success of Zee in finalising a partner will depend on whether it adopts a flexible stance on valuations at a time when it is a little difficult to find buyers for media assets,” he added.

Apart from Zee, Reliance Industries (RIL) was in the spotlight, its share shooting up on the back of speculation that Reliance Industries could win a better-than-expected price for the stake it intends to sell in group company Reliance Petroleum.

The RIL scrip opened at Rs 381.45, hit a high of Rs 394.50 before closing at Rs 393.75 on trading volumes of 38.14 lakh shares.

   

 
 
LOBBIES AT WORK TO DILUTE JUTE ORDER 
 
 
FROM JAYANTA ROY CHOWDHURY
 
New Delhi, May 24: 
The government is preparing to promulgate a new jute packaging order that will end reservation for jute packing in urea and allow plastic packaging for foodgrain and sugar in consumer packs of up to 10 kgs.

The battle between the rival plastic and jute lobbies over continued reservation for bulk packaging of foodgrain, however, seems to have been won at least for the time being by Calcutta’s jute barons.

For the country’s plastics lobby led by Reliance, this could have spelled gloom but for the silver lining of being allowed packaging rights over the urea market and the foodgrain and sugar consumer market.

A committee of secretaries has already cleared these proposals and a note for the Cabinet committee on economic affairs is being drawn up on these lines.

The battle between the two lobbies had taken strong political overtones with Andhra Pradesh chief minister N. Chandrababu Naidu personally writing to Prime Minister Atal Bihari Vajpayee earlier this month asking him to relax rules which provide for compulsory jute packaging for foodgrain and sugar besides scrapping rules which reserve 20 per cent of all urea packing for the jute industry.

But, strong counter-lobbying by Trinamul leader Mamata Banerjee and BJP’s minister of state for communications Tapan Sikdar managed to save the day for Bengal’s jute industry partially.

The battle had reached such bitter levels that Naidu, in his letter to Vajpayee, wrote “I think some of the crucial issues raised...relating to this matter are not (being ) thoroughly examined by the ministry of textiles.”

Besides the Andhra supremo, Madhya Pradesh’s chief minister Digvijay Singh and Gujarat’s Keshubhai Patel also lent their support.

Naidu and others pointed out that jute packaging was often in short supply, especially at critical times when new grain is reaped, making storage and distribution difficult.

Though he did not win the big battle to dereseve foodgrain packaging, Naidu’s lobbying has also ensured that sugar fortified with vitamins, will also be thrown open to plastic packaging.

Both Mamata and Tapan Sikdar raised environmental concerns to try win to their case for Bengal’s jute industry.

Although now an estranged partner of the coalition government, Banerjee, wrote and rang up central ministers pushing her contention that jute is a more environment-friendly packaging.

   

 
 
BSNL HASTENS CITY CELL LAUNCH 
 
 
FROM M RAJENDRAN
 
New Delhi, May 24: 
Bharat Sanchar Nigam Ltd (BSNL) has asked its West Bengal circle to speed up the commercial launch of GSM-based mobile cellular service in Calcutta which has been delayed because of increased call drops.

A call drop is a phenomenon where either the continuity of a call is broken or the line becomes feeble, largely because of the weaknesses in infrastructure.

Minister of state for communications Tapan Sikdar had expressed his unhappiness to BSNL chief D.P.S. Seth over the slow progress made by the West Bengal circle in starting the new service in the state capital.

The issue came up for discussion at a meeting of senior BSNL officials on Wednesday where it was decided to hasten the commercial launch and also to increase the base transceiver systems (BTS). The increase in number of BTS will help reduce call drops and enhance the clarity of voice transmission.

The West Bengal circle of BSNL has set up 22 BTS along with the single base station controller (BSC) for the pilot project. But due to the growing problem with call drops, BSNL has asked the Bengal circle to increase the number of BTS in Calcutta to 39.

However, the West Bengal circle has yet to take a decision on this request. Chief general manager West Bengal circle S.P Chakraborty said, “We have called the tenders for the cellular mobile services and we are examining it.”

According to officials in Telecom Engineering Centre (TEC), “The BSC is the heart of mobile service. The BTS gets the signal from BSC and transmits it back and navigates the calls. It is important that the nearby areas where BSC and BTS are situated should not have high-rise buildings or other obstructions.”

Chakraborty refused to divulge where the BSC has been installed and what measures the West Bengal telecom circle has taken to enhance the call completion.

Sources in BSNL said the trial run of GSM mobile service in Calcutta had to face various sorts of technical difficulties. “The call drop was a major problem for us. We took up the issue with agencies concerned, but failed to get a favourable response. We found that the only way to improve our call completion was to increase the BTS, which we had recommended to the headquarters,” said a senior officials in West Bengal telecom circle.

While no definite date has been fixed for the commercial launch of the GSM-based cellular mobile service in Calcutta, officials are confident of completing the installation of remaining BTS over the next few months.

   

 
 
STERLITE FRONTRUNNER IN RACE FOR OPTIC FIBRE DEAL 
 
 
FROM M RAJENDRAN
 
New Delhi, May 24: 
The Sterlite group has emerged as the leading contender for the Rs 1,014-crore Bharat Sanchar Nigam Ltd’s tender to procure optical fibre cables to be installed over an area covering 72,000 kilometres.

The bids for the optical fibre cables were opened today with Sterlite group companies—Sterlite Telecom, Sterlite Optical and Sterlite Telelink—figuring in the bracket of first five companies on the basis of the lowest bids.

This is the first major tender floated by BSNL since it was spun off from the department of telecommunications as a corporation. The bids reveal that out of the four Sterlite group companies that participated in the bidding process, three should receive orders in the two categories for which the tender was floated.

In the 24 fibre optical cables category, Chennai-based company TTL has emerged as the lowest bidder with a quote of Rs 1.85 lakh per kilometre of fibre optical cable. It was followed by Sterlite Telelink (Rs 2,15,800), Sterlite Telecom (Rs 2,15,900) and Sterlite Optical (Rs 2.16 lakh) and Birla Ericsson (Rs 2.18 lakh).

Aksh Optifibre emerged as the lowest bidder in the 12 fibre optical cable, quoting Rs.1.12 lakh per kilometre of fibre optical cable. It was followed by

Sterlite Optical (Rs 1.18 lakh), Sterlite Telelink (Rs 1.19 lakh), Vindhya Telecom (Rs 1.22 lakh) and Sterlite Telecom (Rs.1.26 lakh).

BSNL plans to lay 60,000 kilometre of 12 fibre optical cable and 12,000 kilometres of 24 fibre optical cable.

In all, 13 companies were cleared for the technical bidding process which included, Aksh Optifibre, Himachal Futuristic Communications Limited (HFCL), Sterlite Telecom, Sterlite Optical and Sterlite Telelink, ARM, TTL, Optel, Birla Ericcson, Vindhya Telecom, UM Cables, Surana Telecom and Sudarshan Telecom.

BSNL will give the orders to the first five lowest bidders in both the categories. The much-awaited tender will also help the telecom major to enhance its bandwidth capacity.

Sources in BSNL said, “This is a major tender and we will expect all our vendors to meet the deadline. Any delay in the supply of cables will be severely penalised. We have to meet the growing demand of customers, particularly the corporate sector.”

“On our part we will not delay in releasing the names of L-1 to L5 bidders. We are also planning to offer some schemes to those who meet the deadline. The whole process is expected to be completed by next month,” sources added.

   

 
 
GOVT MOVE MAY CHOKE TEXMACO OPERATIONS 
 
 
BY PALLAB BHATTACHARYA
 
Calcutta, May 24: 
Texmaco Ltd, the K.K. Birla group company, may suspend operations following the railway ministry’s decision to stop wagon intake for the current financial year.

Texmaco senior president R. C. Maheswari said the government decision has come as an “unmitigated and absolute” disaster for the industry and the two million people in the state who are directly or indirectly dependent on it. “During the four decades of my career, I have never seen such a situation. We are all at a loss,” Maheswari said.

Texmaco, which is the state’s largest private sector wagon manufacturer, is likely to suffer a loss of Rs 4 crore in the first quarter of the current fiscal.

“There has been no order from the railways in this quarter. Now we have lost all hope,” he said.

The chief executive categorically pointed out that it is not possible for the company to feed 4,000 workers, who will sit idle because of production stoppage.

“The workers are ready to work, the machinery is ready but if there is no order. How can you proceed,” he said. However, Texmaco is not the only company to bear the brunt. The other three public sector wagon manufacturing units—Burn Standard, Braithwaite and Jessop—are also heading for work suspension.

“For the last few years, there were, at least, some orders there from the railways with helped us to meet part of the wages. But now the units will head for a natural death. It is only a question of time,” a director of the Bharat Bhari Udyog Nigam Ltd (BBUNL), holding company of the three wagon manufacturing units, said.

The wagon industry feels that the government decision is just a fall out of political crossfire.

“By stopping the wagon intake, the government is probably trying to kill two birds with one stone. It can create a severe labour unrest to disturb the state government and at the same time settle a score against former railway minister Mamata Banerjee,” said a senior industrialist.

All the trade unions in Texmaco, cutting across political affiliations, have decided to lobby with the Centre for the release of orders. They may also call an indefinite strike to press their demand.

“The decision has come so suddenly that we need to sit together and decide the future course of action. We are not going to take the government onslaughts without any resistance,” a veteran Citu leader said.

   

 
 
PHILIPS OPEN OFFER FOR PUNJAB LAMPS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 24: 
Royal Philips Electronics N.V (Philips) of the Netherlands today made an offer to buy a 17.37 per cent stake in the electric equipment company, Punjab Anand Lamps Ltd (PALI) at a price of Rs 95 per share. The offer, if successful, will see PALI being delisted from the exchanges.

PALI supplies lighting products to Philips India.

In a communication issued to the stock exchanges today, Philips said it already owns 59.06 per cent of PALI’s equity.

Philips added the price of Rs 95 is at a premium of 11 per cent over the 26-week average price of PALI of Rs 85.6 on the Bombay Stock Exchange (BSE).

Earlier, Philips had made an open offer for PALI at a similar price in November 2000. Prior to the offer in November, Philips held a 51 per cent equity stake in PALI, while another 23 per cent was held by Philips India. The open offer then was for the balance outstanding equity of 25.5 per cent.

The offer, however, was not too successful, with both Philips and Philips India raising their stake only to 82.63 per cent.

The open offer now is for the balance equity of 17.37 per cent.

While the offer will open on June 29 and close on July 28, Philips added the offer is not conditional to any minimum level of acceptance. The offer is being made through investment bankers DSP Merrill Lynch, it said.

Reacting to the announcement, the Punjab Anand Lamps scrip was locked in at the upper 8 per cent limit to Rs 92.95 in early deals today after opening at Rs 91. The scrip however, closed marginally weaker off the high at Rs 92.40. The counter witnessed 22 trades of over 1,900 shares being traded, resulting in a turnover of Rs 1.76 lakh.

The Dutch parent had announced a similar open offer for Philips India Ltd (PIL), which saw the parent’s stake in the company rising to over 80 per cent. The markets were recently rife with speculations that Philips would come out with a fresh open offer in its Indian arm. This was, however, denied by company officials.

   

 
 
CARLSON TO SET UP 12 COUNTRY INNS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 24: 
Hotel major Carlson is planning to open 10 to 12 three-star country inns and suites in India in the next two years. The first country inn is coming up at Katra in Jammu and Kashmir in July. This will be followed by similar inns and suites in Calcutta next year.

Managing director of Carlson Hospitality Marketing - India Pvt Ltd (CHMI) Pankaj Kodesia said: “These would be franchisee hotels under CHMI’s management. In Calcutta the country inn has been franchised to Panchwati Resorts which will be developed near the new Howrah bridge.” Apart from this, Carlson is interested to build country inns in Puri, Mumbai, Jallandhar and Ludhiana.

CHMI today announced a tie-up with The Regent Mumbai, a licensee of Carlson’s Regent International Hotels; to provide reservations, sales and support.

Under this alliance, CHMI would offer the aforementioned services for the Regent Mumbai and the 13 Regent International properties around the world in the four Indian metros and Bangalore.

Apart from this, CHMI would also develop the business and marketing plan for Regent Mumbai, monitor its performance and offer marketing services.

CHMI is a joint venture between Carlson Hospitality Worldwide and Talent Marketing Pvt Ltd. It was incorporated in late November last year to provide sales, marketing and reservation support to Carlson’s hotel brands like, Regent International Hotels, Radisson Hotels & Resorts Worldwide, Country Inns and Suites by Carlson and to promote its upmarket luxury cruises.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs 46.98	HK $1	Rs.  5.95*
UK £1	Rs.66.47	SW Fr 1	Rs. 26.05*
Euro	Rs.40.34	Sing $1	Rs. 25.70*
Yen 100	Rs.39.19	Aus $1	Rs. 23.85*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs.4680		Gold Std (10 gm)Rs.4600
Gold 22 carat	Rs.4420		Gold 22 carat	Rs.4255
Silver bar (Kg)	Rs.7650		Silver (Kg)	Rs.7620
Silver portion	Rs.7750		Silver portion	Rs.7625

Stock Indices

Sensex		3683.20		+  8.66
BSE-100		1791.81		-  0.25
S&P CNX Nifty	1181.85		+  2.75
Calcutta	 123.20		+  0.79
Skindia GDR	 659.57		-  3.75
   
 

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