A hat-trick of open offers
Bajoria ploy to limit impact of Sebi order
IOC alternative on Haldia Petro table
Jurong Corp picks up 10% in Positra SEZ
Economic Bills rushed through
BSNL scraps switch tender
TCG foray into infotech
Foreign Exchange, Bullion, Stock Indices

Mumbai, Aug. 30: 
Steel major Tata Iron and Steel Company Ltd (Tisco), C & N Touristic AG of Germany, and Finnish power major Wartsila Corporation today announced open offers to raise holdings in their respective subsidiaries.

While Tisco is making a second open offer to shareholders of Tata SSL Ltd to acquire the remaining 16.97 per cent of the latter’s equity, C & N Touristic AG, Europe’s second-largest tour operator, and its subsidiaries, announced an open offer to mop up an additional 20 per cent in its local arm Thomas Cook India. On the other hand, Wartsila Corp, the Finnish parent of power generation equipment maker Wartsila India Ltd, announced an open offer to buy out the entire stake of the Indian shareholders.

The board of Tata Steel, which met here today, approved a proposal for the second open offer at Rs 27 per share of face value Rs 10, the company informed the Bombay Stock Exchange. Tisco had offered the same price in December last year to acquire 55.24 per cent equity in TSSL. However, it was then able to acquire only 38.19 per cent.

The board also approved an offer for 45,568 partly paid-up equity shares at a price of Rs 2 per equity share payable in cash, it said.

Sources said the objective of the present offer is to enable Tisco restructure the subsidiary. The restructuring will include relocating, spinning off or divesting assets and restructuring of assets and liabilities.

TSSL which makes steel wires, ropes, has plants located at Navsari in Gujarat and Tarapur in Maharashtra. It is a market leader in the steel wire business, with a share of over 30 per cent. The company also had a 1.40 lakh tonne cold rolling mill, which it hived off to Tata Steel last year.

German company C & N Touristic AG envisages to acquire 2,916,667 fully paid-up equity shares of TCIL at Rs 351.68 apiece.

The offer, the company said, will commence on October 16 this year and close on November 14.

Thomas Cook CEO A. Kakkar said the open offer will take the German parent’s total stake in the Indian arm to 60 per cent. The German company last year bought British firm Thomas Cook, which owns 40 per cent of Thomas Cook (India).

The share slid 9.7 per cent to Rs 286.25 on the BSE today as the offer price fell much short of market expectations. Analysts had earlier predicted a range of Rs 425 to Rs 450.

Meanwhile, Wartsila today made a surprise open offer to acquire the shares of its local arm.

The Finnish parent said it is making a voluntary offer to the public shareholders of Wartsila India Ltd to acquire 58,96,700 equity shares of Rs 10 each, representing 49 per cent of the paid-up equity and being the balance outstanding equity capital of Wartsila India at a price of Rs 120 per share, payable in cash.

The offer will involve an estimated cost of Rs 71 crore, leading merchant bankers DSP Merrill Lynch Ltd informed the BSE today, on behalf of Wartsila Corporation. Following the surprise announcement, the Wartsila counter rose the maximum permissible 20 per cent to Rs 82.85.


Calcutta, Aug. 30: 
The Securities and Exchange Board of India’s (Sebi) order barring Arun Bajoria from dealing in securities is unlikely to have any major bearing on the jute baron’s plans to offload his stake in Bombay Dyeing through the company’s buyback programme. He has already transferred his shares to various associates and relatives not affected by the Sebi order, and can now sell them in the market, while the company executes the buyback programme.

Bajoria said: “I was apprehensive that Sebi might take such a step to prevent me from taking advantage of Bombay Dyeing’s buyback. So, I transferred the shares to my associates so that any order barring me, my relatives and my broking firms from entering the markets did not affect my plans.” The jute baron holds over 6 per cent stake in Bombay Dyeing.

The Nusli Wadia promoted company plans to acquire up to 25 per cent of its equity through open market operations at a maximum price of Rs 60 per share. The stock is hovering around Rs 40 at present, but should move up once the company starts buying its shares from the market. Bajoria, though upset with the company’s offer when it announced it, now intends to cash in on the arbitrage possibility.

It is unlikely that the market regulator can book Bajoria for transferring his shares, though it has appointed an adjudicating officer to investigate Bajoria’s transactions in the Bombay Dyeing stock. A top-level Sebi official said: “Even if Bajoria has transferred his shares to friends and associates recently, it is very difficult for Sebi to book him for it. Under the given takeover regulations, it is very difficult to establish them as persons acting in concert and helping him to dodge the suspension.” Sebi may, however, still take a look at the matter, the official added.

Sebi had started revamping the takeover regulations late last year, but the exercise got aborted midstream as the scam took place, forcing the market regulator to divert its focus on various investigations. One of the key problems that the amendment of the takeover regulations aimed to address was that of identifying persons acting in concert.

Though Bajoria has transferred most of his Bombay Dyeing shares, his substantial holdings in Kanoria Chemicals and Ballarpur Industries, among others, still remain with him and his family, sources said. They also said, Bajoria, of late, has started operating through a new bunch of brokers. His market operations in Bombay Dyeing took place through Mega Stock and Mega Resources. Both the broking firms have been bolted out of the market by Sebi yesterday.

The jute baron has still not received the order from the market regulator, and associates said, Bajoria may consider transferring his other holdings to friends not restrained from trading in securities. Associates of Bajoria also said that they could not finalise their strategy today as they needed to examine the Sebi order before finalising their defence against it.


Calcutta, Aug. 30: 
The board of Haldia Petrochemicals, which meets tomorrow, will find an alternative way to run the company smoothly if Indian Oil Corporation does not come in as the fourth equity partner. The board will also discuss the present status of talks with the financial institutions on the issue of debt restructuring.

The Chatterjee Group (TCG) chief Purnendu Chatterjee is learnt to have proposed a turnaround plan for the state’s showpiece project at a meeting with chief minister Buddhadeb Bhattacharjee on August 22. The state government is currently examining the proposal.

Speaking to The Telegraph, Chatterjee said, “The issue of minority or majority stakeholding cannot be resolved in a board meeting. The three promoters — we, the West Bengal government and the Tatas — will have to sit together and solve the problem. However, it can be said that things are going in the right direction and the matter will be solved within 45 days, as I had said on August 22.”

“HPL is doing extremely well and all the three promoters want the crisis should be over within the shortest possible time,” Chatterjee said.

This is an indication that the issue of management control, which was hanging fire for quite some time now, is likely to be sorted out soon.

Talking to newspersons at Science City today, the chief minister said the government has no plans to dilute its stake or pull out of Haldia Petrochemicals.

Media reports had earlier quoted state commerce and industry minister Nirupam Sen, saying that the government plans to pull out of the project.

However, at Writers’ Building today, Sen said there was no question of the state government pulling out of Haldia Petrochemicals, adding the government was doing all that is necessary to make the project a success.

Sources said the board will take a fresh look at IOC’s proposal. “However, it is not expected to take a final decision on the issue. The board members will first explore ways to run the project with the three promoters,” HPL sources said. “What is now important is the stand adopted by the financial institutions if the three promoters decide to run the project on their own. The FIs’ comments at tomorrow’s meeting is also important. Their line of thinking on debt restructuring will also become clearer,” sources said.

Earlier this week, the TCG chief, along with senior HPL financial executives, had met the FIs led by the Industrial Development Bank of India, to convince them to restruture the project’s debt burden, put at Rs 4,000 crore.


New Delhi, Aug. 30: 
Singapore-based Jurong Township Corporation, the designer of Positra—the country’s first Special Economic Zone (SEZ)—has picked up a 10 per cent stake in the $ 3 billion project. Although the firm was not ready to pump in its own funds to build townships, “they have faith in what they are building,” said Positra chairman Rajendra Singh, who is a former chairman and managing director of NTPC.

“We have paid a hefty sum to this foreign consultant. They have seen the viability of the port project themselves and picked up the stake. Bovis Landlease, the other project consultant, has not picked up a stake, but they will be welcome if they propose to do so,” he added.

Sumitomo Corporation of Japan has also taken up a 10 per cent equity in the project. The Gujarat government has picked up a 5 per cent stake even though they were offered a 10 per cent equity.

Other financial partners of the project include Industrial Development Bank of India (IDBI) which is pumping in Rs 1000 crore—Rs 100 crore by way of equity and Rs 900 crore as long-term debt.

Housing and Urban Development Corporation (Hudco) has also given in-principle approvals of Rs 1000 crore while Bank of Baroda has promised Rs 125 crore.

“The other financial institutions and banks have also been approached for financial participation and going by the response, we should not face a problem,” Singh asserted.

The integrated SEZ area, a duty-free enclave, is supposed to be a production hub of the entrepreneurs for export purpose.

The goods manufactured there can also be marketed indigenously but after paying all the duties that an imported product attracts.


New Delhi, Aug. 30: 
With just one day to go before the close of another stormy parliamentary session, the government got down to some serious legislative business and introduced three important economic Bills that were cleared earlier this month by the Union cabinet. They were the Companies Amendment Bill 2001, the Sick Industrial Companies (Special Provisions) Bill 2001, and the Electricity Bill, 2001.

It is learnt that the much-awaited Convergence Bill will be tabled in Parliament tomorrow.

The Companies Amendment Bill provides for the formation of a National Company Law Tribunal that will deal with matters relating to the amalgamation, revival or rehabilitation, and winding up of companies that go to the wall. The other bill provides for the repeal of SICA and jettisons the existing apparatus for dealing with the revival of sick companies including the Board for Industrial and Financial Reconstruction and the appellate authority.

The new legislations are designed to hasten the process of reviving ailing companies and the windup of those units that have no hope in hell of ever becoming viable.

At present, the entire process of winding up companies that have gone to the wall takes almost 25 to 30 years; the new Bill will provide for a blitzkrieg approach with a regimented schedule providing for a windup in a little over two years.

Briefing reporters here today, A. Ramaswamy, joint secretary in the Department of Company Affairs (DCA) said a decision on whether to refer to the bill to a standing committee will be taken tomorrow. The government is not averse to any such referral, he added.

With the passing of the bill, the powers of the Board of Industrial and Financial Reconstruction (BIFR), the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), and the Company Law Board (CLB) will vest with the NCLT.

Ramaswamy said that “an element of seriousness will come, as NCLT has been given contempt of court powers. With its formation, no quasijudicial body will be able to entertain cases or give stay orders in matters relating to reconstruction, rehabilitation, and winding up of companies.” To begin with there will be 10 benches of the tribunal for these cases.

The electricity Bill 2001 was introduced in the Lok Sabha by Union power minister Suresh Prabhu.

The proposed legislation was discussed at the draft stage in various fora over the past year. Intensive consultations were held with the stakeholders during the last three months, many of them in the presence of Prabhu.

The Bill stipulates that the Union government should prepare a National Electricity Policy in consultation with state governments. It also highlights the need to give a thrust to complete rural electrification and provides for management of rural distribution by panchayats, cooperative societies, nongovernment organisations, and franchisees.

It also removes licensing requirements for the generation of power and freely permits captive power plants. Hydroelectric projects would, however, need the approval of the state government and clearance from the Central Electricity Authority.

The Bill also stipulates that the transmission utility at the central as well as state level should be a government company vested with the responsibility for planned and coordinated development of the transmission network.

One of the important features of the bill is that distribution licensees would be free to undertake generation and generating companies would be free to take up distribution licensees.

Tomorrow, the government is expected to table a bill that will permit cooperatives to transform themselves into companies and freely access the capital market.


New Delhi, Aug. 30: 
In a hasty move, Bharat Sanchar Nigam Ltd yesterday cancelled the Rs 572.60 crore telephone switching equipment tender following the ruckus created by the Congress in Lok Sabha over the alleged interference by Tapan Sikdar, the minister of state for communications, in a tender floated by Mahanagar Telephone Nigam Ltd.

BSNL had cancelled the 20.45 lakh line telephone switching equipment tender in which the lowest bidder had quoted Rs 2,800 per telephone line as against Rs 1,900 quoted for the same equipment last year. The equipment were to be installed to clear the waiting list for telephones in many states.

Officials in the communications ministry said there was no correlation between the two episodes and the BSNL decision was based on a few findings made by the team evaluating the tender.

“We found that the bids for the equipment with same specifications were far higher than last year,” said an official. “Worldwide, the prices of telecom equipment have been falling. Our officials found that the price this particular equipment had also come down by 25 per cent. So we decided to cancel this tender and will soon call for a retendering.”

Lucent, Alcatel, Ericsson, Siemens and ITI had participated in the tender floated by BSNL last month.


New Delhi, Aug. 30: 
The Chatterjee Group (TCG), the $ 1-billion global private investment company, plans to enter the infotech sector with a state-of-the art internet data centre in eastern India.

The data centre will deliver high-end, fault-tolerant hosting services over a networking infrastructure solution from Cisco Systems. Shome Sengupta, vice-president (e-commerce), TCG said, “Eastern India has tremendous potential to grow as an IT destination.”



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