Gesco finds a saviour in Mahindras
SBI millennium bonds raise close to $ 5 bn
Eveready to consider sale of tea gardens on Friday
MS servers
Loyalty is not a zero-sum game
Born-again brands spell Lever success
RSP welding unit upgrade cleared
Magma sets lofty disbursal target
Centre links funds to SEB reforms
Foreign Exchange, Bullion, Stock Indices

Mumbai, Nov 6: 
The Mahindras will make a joint counter-offer with the Sheths to fend off the hostile bid mounted by Abhishek Dalmia of Renaissance Estates to wrest control of Gesco Corporation.

The idea that the embattled Sheths and the Mahindras join forces came from HDFC chairman Deepak Parekh. His institution has even sanctioned a line of credit to finance the share-purchase.

If the counter-offer succeeds, it will mean that the Sheths will not only have to bring the Mahindras� representatives on board, but also cede majority control to them.

�After a successful counter offer, Mahindra Realty and the Sheth group will hold Gesco shares in a ratio of 3:2. The company�s constitution will reflect the new shareholding pattern,� said a late-evening press communiqu� signed by Ghanshyam Sheth, who represented the Sheth group, and Arun Nanda, executive director, Mahindra Realty & Infrastructure Developers Ltd, a division of Mahindra & Mahindra (M&M).

There is no word on the price at which the counter-offer is being made, although the Sheths have indicated to the financial institutions that the fair price is Rs 50. Kotak Mahindra Capital Company is advising the companies on ways to make the counter-offer.

In an indication that the Mahindras are looking at a long-term relationship with the Sheths, Nanda said his company sees significant synergy in its alliance with Gesco Corporation. �We have great regard for Sheth as a professional. He has managed the real estate business for the last nine years very well and has successfully developed a highly competent professional management team,� he added.

Sheth, who is the managing director of Gesco Corporation, said the shareholders of his company will derive tremendous benefits by virtue of the association with Mahindra Realty. �It will give us access to Mahindra Realty�s expertise, besides the goodwill of the Mahindra Group. In addition, it will be good for the employees of Gesco ,� he added.

The HDFC chief said the alliance is in the interest of Gesco Corporation, the real estate industry and customers. �The consolidation of two formidable real estate players will help bring a greater degree of professionalism in the way the industry is run,� he added.

The joint counter offer is a bid to thwart the takeover attempt being made by the A H Dalmia Group.

The Sheths were required to make the offer to counter the Dalmia group�s open offer before November 10. The Dalmia group�s open offer for the acquisition of 45 per cent of Gesco�s equity at Rs 27 a share opens on November 24.

The financial institutions, which hold a huge chunk of shares in Gesco Corp, have indicated their intention to sell their stake to the highest bidder. Dalmia may sweeten his bid after the Sheths make their counter offer, but he is keeping his cards close to his chest at the moment. His company, which now holds a 10.4 per cent stake in Gesco, has made an open offer to acquire another 45 per cent. The Sheths, on the other hand, hold only 13 per cent.    

Mumbai, Nov 6: 
The State Bank of India (SBI) is said to have mopped up around $ 5 billion from its India Millennium Deposit Scheme (IMD).

State Bank officials were not willing to comment on the collections stating that the bank was still collating the figures from various centres.

However, they were certain that the IMD would overtake the Resurgent India Bond (RIB) issue in 1998 which collected $ 4.23 billion.

IMD was aimed at boosting India�s forex reserves. The bank was expecting to raise over $ 4 billion through the scheme which is aimed at Indians residing abroad.

Forex circles reveal that the US -based banks have been the most aggressive in mobilising with American Express Bank (AmEx) offering commission of about 3.20 per cent to investors which is almost 1.20 per cent higher than that offered by SBI to collecting banks.

According to forex circles, Citibank and AmEx are likely to raise close to $ 1.50 billion of the total IMD collections of $ 5 billion.

The news energised the Indian currency with the rupee making a smart recovery of 20 paise during the early part of today�s trading. However, the rupee turned southwards when it closed around the previous day�s level.

The IMD scheme is in the nature of certificates of deposit, which is transferable by endorsement and delivery. The proceeds of the issue will be invested mainly in core sector projects.

The cost of the IMD scheme launched on October 21 (when compared with the Resurgent India Bonds issue which raised $ 4.23 billion in 1998) was competitive as the interest rates globally had moved up, say forex circles.

While the RIB deposits were raised at 7.75 per cent (2.25 per cent above the then prevailing six-month Libor), the IMD fund raising cost amounts to 8.50 per cent (1.75 per cent above the current six-month Libor).

On sterling deposits, it offers 7.75 per cent and 0.85 per cent on Euro deposits.

The all-in cost comprises 8.50 per cent coupon rate, 0.5 per cent issue expenses per annum and bearing one per cent exchange rate risk.    

Calcutta, Nov 6: 
The board of Eveready Industries India Ltd (EIIL) will be meeting on November 10 to consider the sale of some of the tea estates subject to necessary approvals.

�We want to reorganise our tea business. Certain gardens are not giving us the desired results. So, we may sell them to either our group company or to someone outside,� said Aditya Khaitan, director of Eveready Industries who looks after the group�s tea interests.

The announcement confirmed The Telegraph report on Saturday that the Rs 832 crore batteries-to-tea conglomerate was planning to pull out of Darjeeling where it wants to sell all its gardens � Glenburn, Lingia, Nagri Farm and Soom.

The buzz in the industry is that Ashok Lohia of Chamong Tea Ltd is the frontrunner in the race to acquire the gardens. Others in the fray include Sanjay Bansal of Ambootia Tea. Eveready has 26 gardens on Assam and West Bengal with a total tea production of 31,733 tonnes.

One reason for putting the four Darjeeling gardens on the block is to raise funds to retire a part of the high-cost borrowings worth Rs 644.91 crore on which it bore an interest burden of Rs 83.48 crore in 1999-2000.    

New Delhi, Nov 6: 
Microsoft Corporation India Private Ltd today announced the launch of a family of six dot Net enterprise servers today. The new generation servers include SQL Server 2000, BizTalk Server 2000, Commerce Server 2000, Internet Security & Acceleration Server 2000, Application Center 2000 and Host Integration Server 2000.

The SQL Server 2000 will be available for Rs 65,420 while the Commerce Server 2000 for Rs 3,96,100 per processor licence and Internet Security and Acceleration Server 2000 for Rs 1,16,500 per processor licence.    

New Delhi, Nov 6: 
What ails Asian companies? Counting on people who are loyal, but lousy at work. The archetypal Asian organisation values loyalty at the cost of its bottomline. That�s the diagnosis from Marc Vollenweider, principal, McKinsey & Co, and a partner in the consultant�s office here.

Speaking at the inaugural session of CII�s two-day human resource management (HRM) summit here today along with a host of corporate bigwigs, Marc said it is the top-heavy management structures�so typical of Asian companies�that have eaten into their profitability. The theme of the summit is �The impact of globalisation on HRM�.

According Marc, companies, instead of recruiting crucial new talent, end up having too many people at the top, whose effective productivity is often not measured.

�Loyalty over performance eats up a company�s profits,� he added.

�In Asian organisations, there is little consequence management,� he said, adding much of the effort is directed at performance appraisals, including incentives and penalties.

It was clear that Marc�s prescription was about hire and fire for employees who do not perform. For him, it is the existence of too many layers and too little delegation of responsibilities that undermine most Asian corporations. Unlike in the West, a person at the helm is seldom held accountable for under-performance, or given marching orders at companies in this part of the world. �Under-skilled and or over-aged middle management is a stumbling block to many enterprises.�

According to Oberoi group president Ravi Bhootalingam, performance is the main plank around which most HR policies ought to be designed in future. �Performance and corporate governance are two sides of the same coin,� he said.

Reflecting a similar sentiment, CII president Arun Bharat Ram said it is time the baton was handed over to the young and promising. �Young people are to be trusted and entrusted,� he said and made a prediction that the average age of the CEOs in future could well be close to 30 years.

Satish Pradhan, speaking from London through video conferencing, said the gap between rhetoric and reality has to be bridged in HR practices. �HR is going to be important like never before, but it will emerge with a new face At the centre of all initiatives aimed at corporate governance, are people,� P. Rajendran, chief operating officer at NIIT, said.

According to Bhootalingam, the key responsibility for company boards is to articulate the values that it stands for. These values, he said, are best revealed through the behaviour of employees.    

Mumbai, Nov 6: 
Fast-moving cosumer goods major Hindustan Lever (HLL) is breaking into rural India like never before, even though slowing sales camouflage the success story of its big brands.

Analysts fret about the slimming topline, but the company is whipping up a thick lather in the countryside by reviving its near-ubiquitous brands through a series of new launches and re-launches. They say its rural initiative will pay dividends over the long term, but Lever�s sales army is already tasting the first fruits of its efforts.

Rin Shakti shot past the one lakh-tonne mark this year, Blue Wheel has quadrupled its volumes to over a lakh tonnes between 1997 and 2000. Considering that laundry is one of HLL�s oldest businesses, the milestones are more than just a coincidence.

In Andhra Pradesh�s Telengana, a traditionally poor market swayed as much by economics as by cinema, a sales promotion campaign mounted atop a train and called Rin Express, held people from Visakhapatnam to Hyderabad in thrall. The train carried over thousand passengers, which included consumers, Lever�s sales force, traders and its team of marketing mavens. The results: Rin Shakti has racked up a 100 per cent growth over last year, and the train helped to generate massive visibility.

Wheel, a brand that was designed to rival Karsanbhai�s Nirma, is now such a great marketing success that parent Unilever is simulating it extensively in Latin American countries.

The brand, which saw its sales flagging in recent times, was shored up through what the company calls commando operations � a marketing ploy that combines van propaganda, wholesaler meets and backed by clutter-breaking communication. Wheel has grown at the rate of 70 per cent in the first month after its relaunch.

In September 1999, Surf Excel was relaunched with a superior formulation to address a variety of stains. Seven months later, Surf Excelmatic powder was relaunched for front-loading washing machines, along with Surf Excel Liquid. Green Wheel was relaunched in December 1999 with a proprietary technology that yielded a better performance than the competition without an increase in cost.

Blue Wheel was relaunched in June 2000 with improved formulation, yielding mid-price performance at mass-market prices. Rin Supreme was launched in January to help the consumer graduate from mass laundry products.    

Calcutta, Nov 6: 
The Steel Authority of India Limited (SAIL) has cleared Rourkela Steel Plant�s (RSP) Rs 60-crore plan to modernise its 40-year-old electric resistance welding pipe plant.

Senior SAIL officials said the upgrade will help strengthen RSP�s position in the market for oil and gas pipes, which are manufactured according to the specifications laid down by the American Petroleum Institute.

RSP, which suffered a loss of Rs 700 crore in 1999-2000, is aiming at a cash profit during the current financial year. It hopes to achieve that goal with improved economies of scale arising from higher production, stronger techno-economic performance and fetching better prices for its products.

With 7,30,500 tonnes of saleable steel produced between April and October this year, RSP has achieved a growth of 16.7 per cent over the level in the corresponding period of last year. This is its record operating level since its inception.

The plant has drawn up plans to enhance its saleable steel production from a level of around 1.2 million tonnes in the last financial year to 1.5 million tonnes during the current financial year. By 2001-2002, it wants to raise that level to its rated capacity of 1.7 million tonnes, SAIL sources said.

It has taken steps to rebuild and revive its blast furnace number one, which had been shut down in last year. It has been rebuilt at a cost of Rs 25 crore, but poor market conditions have made its revival uncertain.

The plant expects improvements in its order book position in the post-monsoon period, before it raises production any further. Its interest and depreciation burden � a result of its Rs 5,300 crore modernisation plan � pushed it into the red by a whopping Rs 700 crore in the last financial year.

More recently, RSP�s hot strip mill was shut for repairs. There has been a notable improvement in quality after the mill resumed operations early last month. Apart from producing flat products such as hot and cold rolled coils, RSP is the only integrated steel plant to have specialised in making pipes and electrical sheets.    

Calcutta, Nov 6: 
Magma Leasing, which is close to seal a deal to acquire the Delhi-based Consortium Finance Limited, has set a Rs 400-crore disbursal target for the next financial year. In the near term, the company plans to privately place bonds worth Rs 40 crore to fund its expansion drive.

Addressing a press conference here today, Magma Leasing managing director Sanjay Chamria said the merged entity will disburse Rs 250 crore in its first year of business.

In addition, mobilisation of retail finance of Rs 150 crore on behalf of multinationals such as GE-Cap, Countrywide and Citicorp will take the total turnover to Rs 400 crore.

�After the merger, Magma expects to provide finance to the extent of Rs 170 crore in construction equipment and truck finance, and around Rs 100 crore in car financing. In the area of consumer durables, Magma will provide loans to the extent of Rs 70 crore. We have earmarked Rs 60 crore for corporate finance. The total disbursals in 2001-2002, therefore, will be in the range of Rs 400 crore,� Chamria said.

Of the Rs 400 crore that it intends to disburse, around Rs 208 crore will go in to businesses based in eastern India, Rs 169 crore in the northern and Rs 23 crore in southern region.    

Calcutta, Nov 6: 
The Centre has told state governments that the funds under its accelerated power development programme (APDP) will be provided on a first-cum-first served basis, and has asked them to come up with schemes immediately. In all, Rs 1,000 crore has been set aside under the for APDP in the current financial year.

In a letter to all the state electricity boards, the government has reminded them that since APDP has been devised to induce states to undertake reforms in the power sector, priority will be given to the projects from states which have committed themselves to a time-bound programme of reforms.

As part of the reforms, states should set up state electricity regulatory commissions with independent powers to set tariffs, unbundling of electricity boards and corporatisation of generation, transmission and distribution functions. Also, the state should be divided into a number of zones for the purpose of distribution, after which they can be privatised in a phased manner. Initially, APDP will co-terminate with the Ninth Five Year Plan, which ends in 2002. Therefore, states will prepare only such projects which can be completed by March 2002.

Confirming the move, West Bengal State Electricity Board chairman G. D. Gautama said the central government has asked his board to come up with concrete plans for power reforms. �We are working in that direction,� he added.

PowerGrid Corporation of India Limited (PGCIL) and North-Eastern Electric Power Corporation (NEEPCO) will implement the sub-transmission projects of special category states, particularly those located in the north-eastern region. Funds under APDP will be provided to state governments/SEBs as a special assistance over and above the normal central plan allocation, and will be scheme-specific in nature.    


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