IPCL to be sold as one entity if Vadodara impasse lingers
Fund to protect investors set to make its debut
McDonalds new outlets
HM on austerity drive
Forex tops $ 43bn-mark

New Delhi, June 16: 
The core group on disinvestment has decided to sell IPCL as one whole unit to a strategic buyer if the differences between the petrochemicals major and Indian Oil Ltd over the pricing of the former’s Vadodara complex are not resolved.

Indian Oil, which has been asked by the Centre to buy IPCL’s Vadodara complex, does not wish to pay the steep price of Rs 1,300 crore that IPCL is demanding. To resolve the issue, the core committee has set up an inter-ministerial group. However, it has ruled that if no solution is found, then IPCL should be sold as a single company.

The Cabinet Committee on Disinvestment (CCD) had taken the decision to hive off IPCL’s Vadodara complex to IOC on November 19. Since then, the two sides have been negotiating on the transfer price without success. IPCL, in fact, had communicated to all stock exchanges on the decision to hive off the Vadodara plant.

IPCL, which had engaged Deloitte, Haskins and Sells, to value assets of the entire corporation including the Vadodara complex, feels pricing it at anything less than Rs 1,300 crore would be a steal.

Officials said IPCL had adopted several methods to value its plant and one method even priced it at over Rs 2,000 crore.

The sale of the Vadodara complex was to have been minus certain common facilities including the 180-km Dahej-Vadodara pipeline for carrying naphtha, ethylene and propylene, the Rs 80-crore captive jetty at Dahej and a 42 per cent stake in the recently commissioned Rs 830-crore liquid chemical port.

But the core group has decided once the Vadodara issue is settled, the government should go ahead with bids for the 25 per cent strategic stake in IPCL which it wants to hawk. The government has already appointed foreign investment banker Warburg Dillon Read as the consultant for privatisation of the corporation.

The government currently holds a nearly 60 per cent stake in IPCL. With this sale, the government’s holding will come down to nearly 35 per cent and management control will switch to the new strategic partner.

Reliance and the Chatterjee-Soros Group had earlier been shortlisted as possible buyers of IPCL, but might be asked to bid once again if they remain interested.

Minus the Vadodara unit, which is the oldest of IPCL’s three plants, IPCL was expected to be a very attractive buy, especially as its reserves would be bolstered by the money IOC would have paid up for the complex.

Because of this, many critics had complained IOC was being “burdened” with the Vadodara unit to help out the corporate group which eventually manages to buy IPCL.

Besides the Vadodara complex, IPCL has two plants — Nagothane gas cracker unit in Maharashtra and the Gandhar unit in Gujarat.

Other stakeholders in IPCL include financial institutions who hold 21 per cent, small shareholders (nearly 11 per cent), employees (half a per cent), and GDR holders (just over 7 per cent).

The company has reported a turnover of over crossed Rs 5,000-crore in 2000-2001 and a gross profit of about Rs 1,150 crore.


New Delhi, June 16: 
The Rs 700 crore investor education and protection fund is likely to become operational next week, according to an informed source in the ministry of law justice and company affairs.

The launch of the fund which was initially slated to be notified by April 30, was delayed because of objections raised by the Comptroller and Auditor General (CAG) on accounting procedures and accountability.

Initially, the CAG was not convinced about the effective management of the fund. Several rounds of discussions were held between CAG officials and the government to address the former’s reservations.

The CAG has now agreed in principle to give his consent after being convinced that the fund will be managed as a government fund whose accountability will be through parliamentary control, the offices of the CAG and the Central Vigilance Commission.

After the go-ahead from the office of the CAG, the law minister will announce the rules through a notification in the Gazette of India.

Last week, the files pertaining to then creation of the fund were forwarded to the CAG and its approval is expected within a week, said the source.

He added that rules regarding managing the fund have been formalised and finishing touches are now being given by the law ministry and it is being translated into Hindi, the official language.

The fund was announced to protect the interests of the small shareholders in the wake of repeated stock market crashes and to enable the small shareholders to make well-informed choices.

The fund will be managed by a committee comprising both government and non-government members and will be headed by the secretary in the department of company secretaries (DCA).

Money required for the fund will be generated from government grants as well as from the corporate sector. From the latter, it will come in the form of unclaimed dividends and debentures, share application money, matured deposits as specified under section 205(c)of the companies Act.

According to sources, a sum of Rs 10-15 crore will be spent annually from this fund to make consumers aware and help them make better informed choices.


New Delhi, June16: 
McDonalds is going to open 6 to 8 new outlets by the end of this year, said Vikram Bakshi, managing director, Connaught Plaza Restaurants Pvt Ltd, a 50:50 joint venture between McDonalds and Vikram Bakshi.

The other venture that McDonalds has in India with Amit Jatia’s company is Hardcastle Restaurant , which owns and manages McDonalds restaurants in western India. At present, McDonalds has 17 outlets in northern India, said Bakshi, who owns and manages them.


Calcutta, June 16: 
A severe cash crunch has forced the C. K. Birla flagship Hindustan Motors to seek the unions’ cooperation for introducing austerity measures at its Uttarpara plant.

The company has admitted that the measures, which include withdrawing subsidies on hospital and electricity charges for the plant’s 10,000 employees, have been taken due to the losses incurred by the Uttarpara plant. It said at present, the company lacks the financial strength to pay interest charges or repay loans and will have to struggle to re-establish credibility with the financial institutions. In the financial year ending March 31, 2001, the loss incurred by the Uttarpara plant rose to Rs 63 crore, from Rs 42 crore the previous fiscal.

The company has decided to introduce a fee for check-ups both for outdoor patients as well as indoor bed charges at the company’s hospital. Earlier, this was done free of cost. The company said the cost of the subsidy for HM hospital comes to Rs 8-9 lakh per month.

Similarly, the company has proposed that the practice of providing subsidised electricity for employees along with accommodation, be withdrawn. The employees will have to pay the actual charges borne by the company, per unit of consumption of electricity.

Factory manager D. Munshi said in a written communication: “We need to restrict our daily expenses in view of the cash crunch and at the same time retain cost effectiveness in all areas. There is an urgent need for a radical change in attitudes and total departure from wasteful practices which are not in the interest of the company.”

Similarly, the company has also decided to withdraw the canteen subsidy. The company claimed that it bears a subsidy of Rs 10 lakh per month for providing foodstuffs at subsidised rates.

Ajit Chakroborty of the Intuc-affiliated HindMotors & Hyderabad Industries Employees Union said: “We are against these austerity measures.”


Mumbai, June 16: 
The country’s foreign currency reserves has touched a new high at $ 43.007 billion for the week ended June 8. For the week ended June 1, forex reserves stood at $ 42.912bn.

Of the total forex reserves, while the foreign currency assets registered rose by $ 95 million to $ 40,187 million in the reporting week, the gold reserves and special drawing rights were at steady at $ 2.816 billion and $ 4 million respectively.

The reserves should boost the rupee which had experienced a roller-coaster ride last week.


Maintained by Web Development Company