Petroleum import bill likely to dip
Aircell Digilink, Koshika cellular licences restor
MTNL to tap State Bank
Nedungadi plans revamp
DCA secretary on Sebi board
Max India announces 1:1 bonus, stock option
Bajaj Auto panel to guide buyback
Lockout at Telco unit
IBP pushes for loan-equity swap
Foreign Exchange, Bullion, Stock Indices

New Delhi,March 29 
India�s petroleum import bill for next year is expected to dip below the current year�s level of $ 13.2 billion as a fall out of the Opec�s decision to increase production.

This is despite a 7 per cent growth in demand for petroleum products projected for next year. Oil industry circles expect the price of Brent crude to be in the range of $ 20-25 a barrel as a result of today�s move.

India does not buy Brent crude. Of the 80 million tonnes crude it plans to import next year for the PSU and private refineries, the requirement of sweet crude will not be more than 14 million tonnes. India buys mostly Dubai crude which is $ 3-4 less than that of Brent. It is expected that in the coming months prices of Dubai crude will be in the range of $ 18-20 a barrel. This is on the assumption that the demand in the industrialised countries will come down with winter getting over.

India�s oil economy budget for next year is also understood to have been based on the assessment that prices would stabilise around $ 20 a barrel. The deficit in the oil pool account can be bridged only if the prices of petroleum products come down. However, it is too early to predict the corresponding fall in the prices of petroleum products.    

New Delhi, March 29 
The Cabinet today cleared a slew of proposals, including one which sought to restore the revoked cellular licences of Koshika Telecom and Aircell Digilink.

The migration of Koshika Telecom and Aircell Digilink to the new telecom policy (NTP-99) was approved after the two companies accepted the package for migrating to a revenue-sharing arrangement without any conditions. They have been given 15 days from the day the Department of Telecommunications (DoT) issues the letter to make the payments. The licences of the two companies were cancelled last year after they failed to pay up licence fee arrears.

�In view of the belated, but unconditional, acceptance of the migration package furnished by Aircell Digilink for Uttar Pradesh (East), the company may be allowed to migrate to NTP-99 regime with the cutoff date being September 1, 1999,� an official spokesman told reporters after the meeting.

The migration to revenue-sharing will be subject to terms and conditions recommended by Attorney General Soli Sorabjee. �Koshika Telecom would have to pay a minimum penalty of two per cent and a maximum of four per cent from December 1, 1999. Aircell Digilink will have to pay penalties from July 28, 1999,� the spokesman said.

The government has also decided to restore the cellular licence of Koshika for Bihar and Orissa circles. �The cellular licences, which were terminated, but restored by Trai, can also be offered for migration to the NTP-99 regime,� he added.

Modi Group�s Spice Communication has been allowed to pay outstanding dues with an additional penalties before April 15. These service providers can migrate to NTP-99 under the terms and conditions recommended by the Attorney General.

The decision will ensure that the revenue-sharing regime of NTP-99 is implemented throughout the country, and problems faced by telecom service providers are resolved soon.

The Cabinet also approved a new airport with international standards at Mopa in Goa on a build-own-operate and-transfer (BOOT) basis. The promoter company will be selected through a global tender. The existing airport at Goa would be closed for civilian operations once the new one is ready.

Exim policy cleared

The Cabinet also approved the new Exim Policy to be unveiled on Friday by industry and commerce minister Murasoli Maran. It is expected to simplify the popular export incentive Duty Entitlement Passbook Scheme, create free trade zones based on the Chinese model and chart the roadmap to achieving a 15 per cent export growth in the next financial year.

The Cabinet approved an amendment to a March 1987 resolution reconstituting the Public Enterprises Selection Board (PESB). The amendment will clear the way for appointments to board-level posts in PSUs without PESB�s consent. However, these will have to be vetted by the Cabinet Committee on Appointments.    

New Delhi, March 29 
Mahanagar Telephone Nigam Ltd (MTNL) is likely to raise an additional Rs 1000 crore through a structured bonds issue to be placed directly with the State Bank of India (SBI).

�We have not finalised the deal and are still in the process of negotiating with SBI,� said S Sundersan, director finance, MTNL. He said the deal is likely to be finalised tomorrow.

SBI sources were optimistic on the move and said that there would be no problem funding the project. �The bank has adequate funds and there will be no hitches,� sources said.

However, they refused to provide details such as the proposed coupon rate or the time period for which the bonds would be offered to SBI.

The proceeds of the issue will the expansion plans and project implementation of the department of telecommunications (DoT). DoT has asked MTNL to raise a total of Rs 2000 crore, of which the telecom company has already raised Rs 500 crore in a recent bonds issue. Following the placement with SBI, it would take the total money mopped up through bonds to Rs 1500 crore.

MTNL is likely to provide the remaining Rs 500 crore to DoT through internal accruals. �MTNL is flush with funds and they can manage to raise the remaining Rs 500 crore,� banking sources said.

MTNL recently completed its bonds issue at an annualised coupon rate of 10.75 per cent per annum for a five-year maturity period with a put/call option at the end of three years. It received a total amount of Rs 509 crore as against an issue amount of Rs 500 crore.

�The mobilisation of funds at the coupon rate of 10.75 per cent is the best rate available despite the tight money position prevailing in the market,� MTNL sources said.

The Rs 500 crore raised through the book building route was the first to be placed and priced through the internet. MTNL entered into a tieup with Satyam Infoway for designing the site while SBI Caps was the sole advisor, arranger and book runner for this private placement.

Meanwhile, MTNL has decided to defer its listing at the New York Stock Exchange. It had proposed to convert 35 million Global Depository Receipts into American Depository Receipts, for which it has already received the necessary approvals.    

Calcutta, March 29 
The Kerala-based private sector Nedungadi Bank will appoint a consultant to draw up a business roadmap for the next five years.

The bank has already shortlisted KPMG, PricewaterhouseCoopers (PwC) and S.B. Billimoria & Co for the purpose.

The business plan will focus on technology upgradation, human resources development and profitability.

A.R. Moorthy, chairman of the bank said, �The consultant will be appointed soon. The plan will be ready by June 30.�    

New Delhi, March 29 
The government today issued a notification appointing Department of Company Affairs (DCA) secretary P. L Sanjeev Reddy as a director on the board of Securities and Exchange Board of India (Sebi) with immediate effect.

The induction of Reddy into Sebi at a time when the second amendment Bill to the Companies Act is being considered by Parliament will impart a new direction to efforts aimed at strengthening investor protection, speeding up capital market development, framing the Competition Law and matters relating to insolvency laws, an official release said. His appointment will ensure better coordination between Sebi and DCA.    

New Delhi, March 29 
Max India Ltd today announced a number of decisions, including an employees stock option programme (ESOP), increase in its authorised share capital, issuance of bonus shares and the appointment of statutory auditors.

The company will also delist its securities from the Calcutta and Ahmedabad stock exchanges and plans to enter into an agreement with the National Stock Exchange (NSE) for listing of its securities on the exchange.

At an extraordinary general meeting (EGM) held today, the shareholders announced ESOP to the extent of five per cent of the company�s share capital in one year to employees, wholetime and managing directors and non-executive directors (excluding promoter directors) of Max India and its subsidiaries.

The shareholders of Max also approved issuance of bonus shares in the ratio of 1:1.

For the issue and the ESOPs the company decided to increase the authorised share capital of the company from Rs 40 crore (Rs 15 crore in equity and Rs 25 crore in preference) to Rs 50 crore (Rs 30 crore in equity and Rs 20 crore in preference).

The existing paid up capital of Max India Ltd will increase from Rs 11.53 crore to Rs 23.06 crore after the bonus shares are issued.

Max India has hired PricewaterhouseCoopers as statutory auditors for assisting the company in international best practices in accounting.

The company has identified life insurance, healthcare and information technology as its growth engines.    

Mumbai, March 29 
Bajaj Auto will set up a three-member high-powered internal committee to manage what would be the biggest buyback operation in Indian corporate history.

�The committee will respond to the emerging situations,� a senior Bajaj official said. The panel will comprise three members of the Bajaj Auto�s board of directors. The company will soon select the merchant bankers to manage the buyback operation and to decide on ways in which the process will be completed.

Unlike other companies, Bajaj Auto�s decision to buy back its shares was forced by the sharp fall in its share price. From a high of Rs 650 in May 1999, the scrip plunged to Rs 256 on March 3. �The buyback will give shareholders who want to sell, an exit route at a price of Rs 450. The offer price is a 20 per cent premium over the current level,� Sanjiv Bajaj of Bajaj Auto said.

He said the buyback will boost the earnings per share (EPS), return on net worth and return on capital employed, all of which will increase the value for existing shareholders.

The two-wheeler major announced the biggest buyback offer in Indian corporate history on Tuesday, deciding to mop up 1.8 crore shares � close to 15 per cent of its equity. The cost will be in the region of Rs 800 crore, if the shares are purchased at Rs 450.    

Lucknow, March 29 
Tata Engineering and Locomotive Company (Telco) ordered an indefinite lockout at the city�s Chinat unit late last night after nearly 100 persons, including employees and policemen, were injured when agitating workers demanding a salary hike clashed with the police and vandalised company property.

The confrontation began when the company�s general manager, C V Singh, refused to accept the demand of employees, who wanted a raise of Rs 4,000 in their monthly wages. The company agreed to an increase of Rs 2,000 after a haggle, but that did not satisfy employees, who insisted that their pay-scales be brought on par with their counterparts at the company�s factories at Jamshedpur and Pune.

The management said property worth several crores had been damaged. Telco Karmachari Sangh president Ajay Yadav claimed the police resorted to unprovoked ruthlessness.

Telco Workers Association general secretary Ram Prajapati threatened to intensify the struggle if the workers� demands were not met.

DPL agitation

Intuc activists today gheraoed and detained the joint managing director of Durgapur Projects (DPL), Tarun Chatterjee, to protest moves to shut the coke-oven unit as part of the company�s trifurcation plan, reports our correspondent. Later in the day, they also held a demonstration in front of the managing director�s office and demanded that the unit be operated by recovering dues from PSUs and ensuring regular coal supplies from BCCL.    

Calcutta, March 29 
IBP has proposed converting Rs 225 crore of a Rs 536-crore loan taken from the Oil Industry Development Board (OIDB) into equity in a switch that will give the board a 40 per cent stake in the city-based oil company.

The move is a part of an equity restructuring proposal which seeks to bring down the government�s holding of 59 per cent in the stand-alone marketing company; financial institutions and public hold 20 per cent each.

However, the extent of the increase in IBP�s paid-up capital of Rs 22.15 crore as a result of the preferential allotment to OIDB is not known.

The Parliamentary Consultative Committee on petroleum is expected to take a decision on the issue at a meeting on Thursday.

A senior IBP official said the loan conversion will bring down direct government holding to 37 per cent but it will effectively control 77 per cent through OIDB.

Earlier, the Disinvestment Commission had recommended that the government�s stake in IBP be capped at 26 per cent. The dithering on this proposal has put the company in a situation where it does not have enough cash to finance new investments.

IBP, sources say, is pressing for the acceptance of the loan-to-equity conversion because all investment proposals hinge on it.

�The current proposal can be a mid-term arrangement before the government takes a final view on disinvestment,� an IBP official said.

The company requires Rs 350 crore to set up new oil tankers in the next financial year. While it expects Rs 225 from the OIDB, the rest will come from internal accruals, and from the Oil Coordination Committee, which owes IBP over Rs 320 crore.

In the current financial year, it invested Rs 125 crore to build eight oil tankers.

�We need to make heavy investments to set up more tankers and to strengthen our marketing network before the oil sector is deregulated completely in April 2002. This is possible only if the government clears our proposals quickly,� the official said.

IBP is expected to register a turnover of Rs 7,000 crore in the current financial year compared with Rs 6,200 crore in 1998-99. Its net profit is projected at Rs 50 crore, up from Rs 42 crore last year.    

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