Headstart for VSNL in the age of competition
FIs set to hold fresh talks on HPL debt recast
More Tata Infotech centres
LG public issue put on hold
First-quarter BoP surplus at Rs 6857cr

Mumbai, Sept. 29: 
Videsh Sanchar Nigam Limited (VSNL), the country’s international telecom carrier, is expected to retain its monopoly in global long distance telephony even after the sector is opened up in April next year as new players are expected to take at least 10 to 20 months to put the infrastructure in place.

Insisting that the disinvestment process in VSNL will be completed by the end of this fiscal, communications minister Pramod Mahajan said as other players are yet to start operations, “VSNL will still get an elbow room of 10-20 months as the sole player in international long distance telephony.”

The government had already announced its intention to offload a 26 per cent stake in VSNL in the current financial year.

The Telecom Regulatory Authority of India (Trai), the apex regulatory arm, is expected to announce the opening up of ILD telephony by April next year.

Mahajan was here to receive the Rs 754.81-crore dividend cheque from VSNL chief S.K. Gupta. Commenting on VSNL’s future, Gupta said it has put itself in a position of strength with strong financials, excellent technical manpower and well developed infrastructure.

It has planned and prepared itself for the emerging competition. VSNL will also look at internet telephony to protect its turf, he added.

Observers tracking the telecom sector aver that the valuation of the 26 per cent VSNL stake will depend crucially on the government’s commitment to open up international long distance telephony to other players.

“The main issue is the guidelines that the government sets for private players,” said Vikram Sagar, telecom analyst at Khandwala Securities.

According to market observers, the government should get a minimum of Rs 270-275 per share for its stake in VSNL. The public sector telecom major’s scrip closed on the Bombay Stock Exchange yesterday at Rs 212.15.

At present, three players—the Tatas, the Ambanis and a BPL led consortium—have shown keenness for VSNL.


Calcutta, Sept. 29: 
The top brass of Haldia Petrochemicals Ltd (HPL) will leave for Mumbai tomorrow to hold fresh talks with the financial institutions on the crucial debt restructuring package even as reports swirled in the media that Tarun Das, director general of Confederation of Indian Industry, will become the non-executive chairman of the company.

While Das could not be contacted in Delhi, sources in CII confirmed that he had been approached to head the Bengal’s beleaguered petrochem company.

When contacted Richard B. Saldanha, managing director of HPL, said: “I have no idea whether Tarun Das is becoming the chairman of the company. However, it is expected that the state government will soon announce the name. Till date there is no official communication to the HPL management from the state government.”

According to the normal procedure, the chairman’s appointment will have to be ratified at the board meeting of the company where the promoters and other FI nominees will be present. The next board meeting will take place after a month. “The appointment of chairman will come up in that board meeting,” Saldanha said.

The post of the chairman fell vacant after Tapan Mitra resigned formally from the company during the annual general meeting on September 28.

However, the appointment of Das needs the consent of the three promoters of HPL—West Bengal government, the Tatas and The Chatterjee Group (TCG).

TCG officials, when contacted, said: “We have not been informed who will become the next chairman. The name of Tarun Das has not yet been proposed to us by the state government.”

Das is well known in corporate circles for his interactions with the government to build a positive environment for industry and assist domestic industries to develop competitiveness.

Till recently, he was the chairman of Associated Cement Companies Ltd (ACC) but had stepped down citing his pressing commitments in CII.

He is also the non-executive director of John Keells of Sri Lanka and is also on the board of Industrial Development Bank of India.

HPL officials feel that the most important task before the company now is to work out a viable debt restructuring package.

“We are happy that the three promoters have agreed to immediately restructure the debt. The outcome of the recent board meeting will send some meaningful signals to the banks and FIs,” officials said.

The Rs 5,170-crore project is saddled with a debt burden of Rs 4,200 crore and the interest outgo is in the region of Rs 517 crore per annum.


Calcutta, Sept. 29: 
Tata Infotech has outlined plans to invest Rs 60 crore in education-related services. Its education services division will use the funds to set up more centres, develop courseware and launch infotech education initiatives in association with state governments.

Division head Rahul Thapan said the aim is to increase the number of domestic centres from 250 to 400 by March 2002, and international centres from 10 to 25. The expansion plans have been drawn up despite the drop in student enrolments from levels seen last year. “Enrolments have dropped 5 to 10 per cent in the second quarter compared with the same period last year. However, the situation is better than it was in the first quarter of this year, when admissions declined 20 per cent,” Thapan said. The Rs 525-crore firm expects a 30 per cent growth in revenues this fiscal, much of it fuelled by the expansion plan which will be implemented in a three-pronged manner: franchisees, tie-ups with educational institutions on a revenue-sharing basis and partnerships with local training institutions.

“In case of tieups with schools and colleges, we provide the infrastructure for the centres,” Thapan said. The company has entered into an arrangement with Webel, the nodal agency facilitating IT initiatives in Bengal, to offer education in the state’s schools and colleges.

in a Rs 2-crore venture. It is also offering entry-level courses and programming language training to 100 schools in Calcutta through the city’s ICSE centre.

Having implemented the WBSWAN project in the state, it to offer e-governance solutions in education, public health, utilities and agriculture. Thapan says the e-governance backbone can support distance learning for students in the districts.

Earlier, the company had tied up with the higher education department, the state government and Jadavpur University’s regional computer centre to set up e-kiosks in districts which offer career counselling and guidance to students.


New Delhi, Sept. 29: 
The recent slump in the stock market has forced LG India Limited (LGIL) to go slow on its plans to raise around Rs 100 crore through an initial public offering (IPO).

The issue, which was scheduled for September-October this year, is now expected to hit the market around April-May next year.

According to the Korean chaebol’s business plan, LG is supposed to dilute a 25 per cent stake to the public within five years of its Indian operations.

However, the plan was getting stalled due to one reason or the other—the latest being the stock market slump.

“The poor performance of the stock market throughout the year has forced us to stall the plan. We are hoping that the market will pick up by the year end. In that case it will be at its peak around April when we will hit the market with the issue,” H.J. Park, LGIL vice-president (finance), told The Telegraph.

Park, however, refused to disclose the premium at which the 25 per cent stake will be offered to the public.

He said the deferment of the public issue is because of the recessionary trend in the Indian economy and has nothing to do with the recent terrorist attack in the US.

The company is, however, going ahead with its Rs 100 crore investment in frost-free refrigerator manufacturing plant. Next year, LG plans to invest another Rs 25 crore in washing machines and Rs 100 crore in compressors for refrigerators and air-conditioners.


Mumbai, Sept. 29: 
Positive capital inflows and lower current account deficit have helped the country record a balance of payment (BoP) surplus of Rs 6,857 crore for the first quarter of the current fiscal year.

According to the figures released by the Reserve Bank of India (RBI) today, the trade deficit was lower at Rs 17,503 crore, while the current account deficit was placed at Rs 1,552 crore. The balance of payment (BoP) surplus stood at Rs 6,857 crore.

The total foreign investment coming into the country during the quarter was at Rs 7,313 crore. While foreign direct investment during the quarter was at a positive Rs 2,855 crore, the net portfolio inflows stood at Rs 4,458 crore. This followed a outflow of Rs 4,890 crore from the total inflow of Rs 9,348 crore. In dollar terms, during the April-June quarter, the BoP surplus was $ 1.46 billion against a deficit of $ 1.02 billion in the same period the previous year.

A major factor which buoyed the external account was the low current account deficit of $ 332 million in the April-June quarter, sharply down from the $ 2.45 billion deficit a year back.

Foreign investments, including portfolio and direct flows, were marginally higher at $ 1.39 billion in the first quarter against $ 1.197 billion in the same period of the previous year. The trade deficit in the quarter was narrower at $ 3.73 billion against $ 4.74 billion in the year-ago period. Analysts said the data corroborated their forecasts of a lower trade deficit this fiscal year.

Figures available so far say that the global economic downturn has taken its toll on Indian exports, which shrank 1.86 per cent in the April-July period after a robust 20 per cent growth last year. At the same time, non-oil imports have also been sluggish, reflecting the weak economic conditions in the country.

Forecasts for oil imports, which formed a third of all imports last year, are also down since most analysts expect world oil prices will stay soft as long as global growth is slowing.

They see little threat from a possible US-led retaliation against Afghanistan for the September 11 aerial attacks on New York and Washington.

However, those attacks could mean even lower demand in the United States, which takes a fifth of India’s merchandise exports and 60 per cent of software exports.

The current account deficit will be far wider in the second and third quarters as we are expecting a massive slowdown in exports,” said Sanjeet Singh, analyst at ICICI Securities and Finance Company. He said the BOP for the full year will hinge on the trend in foreign capital flows.

”We expect foreign direct investments, foreign borrowings and net deposit accretions to remain healthy, although foreign institutional investments could slow,” he said.


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