Institutions may exit ACC
Jaitley-Yadav tussle puts back selloff decisions
Cabinet clears coal bed methane hunt at Raniganj
BPL plans to list telecom firm on Nasdaq
Mega plan for Haldia dock
Information supersite for e-business

Mumbai, April 22 
Industrial Development Bank of India (IDBI), Unit Trust of India (UTI) and other financial institutions may consider pulling out of cement major ACC Ltd if the Securities and Exchange Board of India (Sebi) formally clears the deal between the Tatas and Gujarat Ambuja Cement. These FIs together hold over 22 per cent in the cement major.

Late last year, Gujarat Ambuja announced that it had bought a 7.2 per cent stake in ACC from the Tatas for Rs 455 crore. The deal which took everyone by surprise came under the scrutiny of Sebi and the capital market watchdog was examining, among other things, whether the acquisition had triggered the Takeover Code or not.

According to media reports, ACC has taken a view that the deal does not trigger the Takeover Code and a transfer of stake does not amount to a change in management control or even sharing of management control “unless the acquiring party is in a position to change the majority of directors on the board of the company.”

“It is embarrassing to comment on a decision that has not been officially announced yet,” said IDBI chairman G.P. Gupta.

However, FIs privately agree that the Sebi decision will force them to consider various options, including the exit route.

“We will definitely consider an attractive offer for our holding in ACC,” a high-ranking FI official, who was not willing to be quoted, said and added, “we will wait for an offer.”

Gupta was, however, more circumspect. “A view will have to be taken,” he said.

The combative mood of the FIs is significant as several global majors are keen on getting a foothold in the company. The market is already agog with rumours that French cement major Lafarge is weighing an open offer to pick up a 30 per cent stake in ACC. Lafarge has, however, denied any such move.

With the unofficial disclosure of the Sebi decision, the mood in Gujarat Ambuja is definitely upbeat.

A beaming Anil Singhvi, chief financial officer of Gujarat Ambuja, said the decision was not surprising and was on expected lines. “We were never interested in controlling the ACC board. All that we are interested is in aligning the two major players in the Indian cement industry.”

According to the memorandum of understanding (MoU) signed between the two parties, Tatas have the option to sell the remaining 7 per cent equity in ACC to Gujarat Ambuja. The MoU has not fixed any timeframe for the sale of the remaining stake.

However, Singhvi felt that the Tatas would divest their remaining stake within a year.

Under the agreement, GACL can put two more nominees on the ACC board after acquiring the remaining 7 per cent stake of the Tatas. This is precisely where the FIs are going to hit back.

“Any representation should be proportional,” says Gupta. He was referring to the fact that institutions hold over 22 per cent stake in the company.

While, Singhvi admits that although the clause on two additional directors is laid down in the MoU, it is the prerogative of the ACC board to decide on GACL’s representation.    

New Delhi, April 22 
A tiff between disinvestment minister Arun Jaitley and civil aviation minister Sharad Yadav over how much stake the government should offload in its flagship airline—Air-India—saw the Cabinet committee on disinvestment putting on hold the sale of some half a dozen public sector units here today.

Coming out of the Cabinet meeting, minister for parliamentary affairs Pramod Mahajan said Jaitley would hold rounds of talks with ministers who ran the various PSUs to arrive at a consensus before the stake sales were taken up by the Cabinet again in mid-May.

“There is a consensus on the policy of divestment but the modalities of each individual PSU have to be decided,” he said. “In some cases one can go up to 51 per cent, while in some it can be 20 per cent. Likewise foreigners can be barred or allowed to participate in the bidding. These things have to be decided.”

Mahajan, however, refused to reveal on which PSUs there was disagreement within the Cabinet.

Besides Air-India, the others on the block were Pawan Hans Helicopter Ltd, NMDC, Kudremukh Iron, FACT and Rashtriya Chemicals & Fertilisers. Decisions on Kudremukh and NMDC were deferred as issues such as financial restructuring and mining leases had to be sorted out.

In the case of Air-India, Jaitley had sought to sell a 51 per cent stake to a strategic buyer which could be a domestic or a foreign airline. Yadav opposed this, arguing it would be “compromising national safety” if foreign buyers were given more than 25 per cent stake.

Yadav had made it clear, in notes circulated before the meeting, that his ministry was unwilling to sell more than 26 per cent equity even to Indian buyers.    

New Delhi, April 22 
The Cabinet Committee on Economic Affairs (CCEA) today cleared the proposal for exploration of coal bed methane (CBM) at Raniganj coal field in West Bengal and approved the petroleum exploration licence application of Modi McKinsey-promoted Great Eastern Energy Corporation for the purpose. The company has been granted the licence to carry out exploration of methane from the coal field in line with the new CBM exploration policy. The terms of contract will be negotiated by the ministry of petroleum and natural gas with a mandate from empowered committee. The 2.5 per cent royalty payable to the Union government by the firm under the foreign investment promotion board approval will be treated as production level payment at a fixed rate. There would also be exemption in customs duty for equipment imported for the concerned block range coal field as per the CBM policy.

The government today approved carrying out exploration by ONGC in deep water areas and allowed it to ally with exploration and production companies. CCEA also permitted ONGC to select alliance partners by inviting offers from shortlisted companies.

Briefing mediapersons on CCEA decisions, Pramod Mahajan said the government has also decided to continue oil seeds production programme and National Pulses Development Project during the ninth plan.    

Mumbai, April 22 
The Nambiars of the BPL group are planning to list one of the companies in its telecom business group on the Nasdaq.

The listing is expected to be done by the end of this year, Rajeev Chandrasekhar, chairman & chief executive officer of BPL Telecom Business Group told The Telegraph. Chandrasekhar said the telecom group has three companies within its fold — BPL Cellular Holdings, BPL Innovision and BPL Broadband Network.

The first is involved in telecommunications, while BPL Innovision oversees internet activities. BPL Broadband, which is a six-month old company, marks the group’s foray into domestic long distance telephony (DLT). Chandrasekhar, however, did not reveal which of these companies would seek listing overseas.

As part of the group’s investment in infrastructure for DLT and the internet, BPL plans to invest over Rs 750 crore to lay over 6000 kms of fibre optic cables in Maharashtra, Kerala, Tamil Nadu, Goa and Pondicherry that will offer high bandwidths.

The company will also set up international satellite gateways at Mumbai, Bangalore, Hyderabad, Calcutta and Delhi in two months’ time.

BPL plans to lease out the capacity to internet players and use a part of the capacity for its own DLT operations.

“The group’s telecom business group is now laying emphasis on convergence by focusing on wireless, internet and broadband services,” Chandrasekhar said.

The group is also looking at deploying around $ 9 million in various vortals (vertical portals). BPL has so far invested around $ 6 million in about 11 vertical portals. The telecom business group chief however, side-stepped a question on the ongoing consolidation phase in the industry, when he said that BPL’s cellular operations has a market share of around 21 per cent market share, serving seven regions. As regards wireless, he said the group has so far raked in around $ 400 million through private placements.

Meanwhile, the group today announced the launch of, its internet company which will offer services in 31 cities.    

Haldia, April 22 
Worried over the future of the Haldia dock complex, the Calcutta Port Trust has decided to undertake a massive capital dredging project there to increase the draft of the Hooghly river.

The Rs 310-crore project is expected to increase the Hooghly river draft by at least one metre from the existing 8.5 metres.

The project, prepared by J. Seundermann, head of the department of Oceanography at Hamburg university of Germany, has been submitted to the government.

CPT chairman H.P. Roy said the project was urgently required for the survival of Haldia Dock Complex (HDC) where the river was waning due to heavy siltation.

“We have made heavy investment in HDC to provide most modern port infrastructure needed by the industries in the eastern region, including Haldia. But our major concern is the river which is fast losing navigability,” Roy said.

The entire funding will be done by the government, which has provided Rs 186 crore in the current year’s budget.

Roy said CPT would come out with a global tender to appoint a dredging contractor after it received the government approval. The project would be completed by December 2001.

Apart from the dredging operation which will cut open the Belari island, the project will include the construction of a 15 km long guidewall in the area to control the flow of the tidal river.

The project, largest of its kind in the country, envisages dredging of 11 million cubic metre of landmass which will be dumped in the sea. The increase of one metre draft will allow five to eight thousand tonnes of more cargo per ship, Roy said.

Inaugurating the third oil jetty, Roy said HDC would now be able to handle more than six million tonnes of additional crude every year to support the need of Indian Oil Corporation.

The jetty has been constructed with indigenous technology at an investment of around Rs 43 crore. The port is also planning to construct a fourth oil jetty in view of the rising imports of IOC.

CPT has plans to privatise berth number six in HDC while investments are being made to expand berth numbers four and five.    

Calcutta, April 22 
It is being billed as the world wide web’s fir-st business-government-business (BGB) information supersite.’

It provides free premium content geared to facilitate e-commerce through virtual stores and auction engines in a month’s time.

The web site,, is owned primarily by Delhi-based Deepak Talwar who holds a 70 per cent stake while the five founders - four UK-based NRIs and a former managing director of ITC Classic - together hold 30 per cent of the equity. The site’s unique selling proposition(USP) is that it provides news, together with sufficient information to buyers and sellers to help them analyse risks emerging from the scenario and then finally gives them a platform for business transactions.

The portal has formed alliances with National Council of Agriculture and Economic Research, Ficci, US -India Business Council and Department of Trade and Industries in the UK .

The alliance is cross promotional and content sharing with a common aim of driving business to each other. It will cover five major markets in the world — the US, Europe (essentially UK), South Africa, Australia and Korea. The site can handle as many as 15 languages.    


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