Saturday, March 27, 1999
today's calendar
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B U S I N E S S | Saturday, March 27, 1999 |
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spotlight today's calendar |
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Sengupta panel suggests
merger of four refineries |
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Hudco
loan for HP board |
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Freight
hike to hit tyre exports Alcatel
to buy Modicorp stake ‘IBP,
Balmer Lawrie can quit jvs’ |
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Sengupta panel suggests merger of four refineries NEW DELHI, March 26 (PTI) — A high-powered committee on restructuring of the petroleum sector today recommended mergers, strategic alliances and cross holding of equity for four stand-alone refineries to enable these to survive beyond 2002 in the deregulated oil market. In its recommendations, submitted to Petroleum Minister V.K. Ramamurthy, the committee headed by Dr Nitish Sengupta said “it will not be possible for any stand-alone refinery (national oil companies) to survive on their own after the year 2002.” The high level committee, comprising experts from oil industry, was set up by the Petroleum Ministry in October last year to suggest restructuring of downstream petroleum sector, especially four public sector refineries and the stand-alone marketing company IPB. Dr Sengupta later told newspersons that he had suggested merger of Madras Refineries Ltd (MRL), Cochin Refineries (CRL), Bongaigaon Refineries (BRPL) and Numaligarh Refineries (NRL) with some State owned oil marketing companies as one option. Urging the government to implement the recommendations immediately, the committee said stand-alone marketing company IBP should have marketing tie ups with both public and private sector oil companies. Taking note of global trends of mergers and amalgamations in the oil sector, Sengupta said it was left to the Indian Oil Corporation (IOC), Bharat Petroleum (BPCL) and IBP to start discussions with stand-alone refineries for tie ups. “The committee has identified a set of key success factors of stand-alone refineries and has also ascertained on who could be ideal companies for forming strategic alliances with these refineries,” he said. The Petroleum Ministry had set up the committee to recommend the best mode of restructuring the stand-alone companies so that viable and strong oil companies may be developed on an integrated basis for upstream and downstream activities in the domestic oil sector for marketing and refining. The committee was also
supposed to recommend an action plan with regard to the
strengths and weaknesses of these units. |
Supreme Court orders status quo on Dalal’s shares NEW DELHI, March 26 (PTI) — The Supreme Court today ordered the status quo on transaction of stock broker Hiten Dalal’s shares pledged to Standard Chartered Bank, which wanted to sell them off to recover an alleged loss of over Rs 280 crore caused by the broker during the security scam in 1992. Admitting the appeal filed by Dalal, a Division Bench comprising Justice B.N. Kirpal and Justice S.Rajendra Babu, issued notice to the bank on Dalal’s application seeking stay on the sale of the shares. On December 24, 1998, Special Judge S.N. Variava had passed an decree declaring that the shares have been validly pledged in favour of the bank to secure the loss to the extent of Rs 280.8 crore. The judge had also awarded costs against Dalal of Rs 1,84,395 payable to the custodian and Rs 30 lakh payable to the bank. Standard Chartered Bank had filed a suit before the Special Judge on the basis that in respect of the transactions in securities entered into by the bank through Dalal, the bank had not received deliveries. The bank alleged that as Dalal had assumed responsibility to deliver the securities, which were never handed over, he should make good the loss. In the agreement for the transactions, Dalal had given various shares, bonds and debentures as security, the bank said and claimed that it suffered a loss to the tune of Rs 1253 crore and the broker by giving the security had partially discharged his liability. Dalal in a written statement before the Special Court had refused to accept liability to pay any amount to Stanchart and said the terms and conditions of the transaction “was got executed by the officers of the bank under the threat of physical torture, and criminal prosecution and the shares (which were claimed to have been pledged to the bank) were also forcibly taken away from his office”. Justice Variava had held that Stanchart was entitled to retain possession of the said shares till the liability of Rs 1253 crore of Dalal had been satisfied. The judge also allowed the
bank to sell the pledged shares and appropriate the sale
proceeds towards the satisfaction of the alleged
outstanding liability of Rs 1,253 crores. |
High court stays encashment of bank guarantees NEW DELHI, March 26 (PTI) — The Delhi High Court today stayed the encashment of bank guarantees of two telecom operators — Reliance and Modicom — by the Department of Telecom (DoT) for four days. Justice S.K. Mahajan also directed the two companies to pay 20 per cent of their licence fee dues including interest by March 30, 1999 and keep their existing bank guarantees alive. DoT has already issued letters to the banks concerned for encashment of the bank guarantees of the two petitioner companies but money has not yet been remitted to the department. Reliance Telecom, the basic service provider in Gujarat circle, has total dues of Rs 103 crore and 20 per cent of it comes to Rs 20.60 crore. On Monday the company submitted a cheque worth Rs 19.52 crore dated March 30. It needs to pay approximately Rs one crore more to DoT within four days. Modicom, cellular service provider in Punjab and Karnataka, has total dues of Rs 241 crore and 20 per cent of it comes to Rs 52.75 crore. In case of default by these companies, the department will be free to encash the bank guarantees of two companies. The court also issued
notices to DoT and asked it to file replies within 10
days and posted the case for further hearing on April 12. |
Hudco loan
for HP board CHANDIGARH, March 26 — The Housing and Urban Development Corporation Ltd. (Hudco) has sanctioned a loan of Rs 101.10 crore to Himachal Pradesh Housing Board, Shimla for Construction of functional institutional, health and educational buildings and police stations at various locations in Himachal. Mr V. Suresh, CMD, Hudco
said that Hudco has so far sanctioned 158 projects
valuing Rs 466.99 crore to various housing agencies and
development authorities of the state for a loan
assistance of Rs 329.22 crore of which Rs 185.56 crore
stands released. |
MMTC’s China exports to grow 65 per cent NEW DELHI, March 26 (PTI) — MMTC Ltd’s mineral exports to China are expected to log a 65 per cent growth rate during 1998-99 over last year’s 2.5 million tonnes, its Chairman and Managing Director S.D. Kapoor said today. He said China had emerged as MMTC’s second largest export market for minerals after Japan. Despite a fall of 11 per
cent in global prices of iron ore, which accounts for
nearly 25 per cent of the corporation’s turnover,
the state-owned MMTC had captured 5 per cent market share
in China against stiff competition from countries like
Brazil and Australia, he said. |
CHENNAI, March 25 (PTI) — Riding the piggyback on new avenues of euro currency conversion and electronic commerce, the Indian software industry is likely to gross a total export revenue of $ 4 billion in the next financial year. Total software exports from the country during 1998-99 will be up by 52 per cent (in dollar terms) at $ 2.7 billion as against $ 1.68 billion in the previous year, says Nasscom President Dewang Mehta. With major opportunities for Indian software industry existing in areas of euro conversion, enterprise resource planning (ERP) and electronic commerce, Indian software industry is set to record more than 50 per cent growth in 1999-2000. IBM strategy BANGALORE (PTI): The Software Group has announced new initiatives for its software products and solutions in the Indian market. IBM Software will focus on a wide range of solutions for e-business, business intelligence and network and systems management, says Vishwesh Padmanabhan, Vice-President, Software Marketing and Solution Developer (Marketing), Tata IBM. IBM Software Group is a part of Tata IBM Limited, the Bangalore-based joint venture between IBM Corporation and the Tatas. Tata IBM markets and supports the IBM range of products, services and solutions in India. IIT system NEW DELHI (PTI): A wireless system that provides high-speed Internet access and leaves line free to make and receive telephone calls has been devised by the IIT in Chennai. The low-cost system, based on the IIT’s wireless in local loop (WLL) technology, uses radiofrequency waves instead of cables to send and receive signals. It has already been shown to provide high-quality phone services in Chennai. The WLL system is cheaper than wired lines and provides Internet access at 35 kilobytes per second. It can be upgraded to provide access at 70 KBPs and does away with the problem of telecom network congestion, says Prof Jhunjhunwala of the IIT’s Department of Electrical Engineering. Y2K work NEW DELHI (PTI): The number of Indian software professionals going to the USA for the year 2000 problem related work has declined in the current fiscal with solutions to the problem being provided from India itself, US Ambassador Richard Celeste has said. “Until recently, almost 50 per cent of Indian software professionals with HB-1 visa for the USA went for Y2K related work or get trained for it. However, this percentage has gone down this year,” Celeste said at a meet on Y2K preparedness organised by Nasscom on Wednesday. IT&T tie-up NEW DELHI (PTI): IT&T, an information technology solutions and services company, has tied up with Microsoft Corporation for a joint strategic initiative. Microsoft will farm out select design and implementation tools to IT&T for the Indian market place. The areas covered under the initiative are — MS Exchange, NT Windows, SMS, Proxy, IIS, Intranet development and work flows. Microsoft plans to develop IT&T as an organisation and certified as ‘MS Ready’. The Indian company is
focussing on infrastructure software, mail and messaging
services, work flow design and implementation of
Microsoft backoffice products. |
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MUMBAI, March 26 (PTI) — JK Corp Ltd today unveiled a business plan involving major consolidation of its core cement and paper businesses, divestment of polyester business and induction of a strategic partner in the cement business. The company’s two million tonnes per annum (TPA) capacity Lakshmi Cement business is proposed to be transferred to a new company and be consolidated with one million TPA capacity of JK Udaipur Udyog Ltd, thus making it a three million TPA cement business, JK Corp said in a release here today. JK Corp proposes to induct an international cement major as a strategic alliance partner in the new cement company. JK Corp has decided to exit the polyester business and negotiations already reached final stages with the Reliance group. The proposal envisages transfer of Orissa Synthetics undertaking or Rs 156 crore and liabilities to the same extent, to a separate company in which a Reliance associate company would subscribe to the equity. Chairman of JK Corp and JK
Udaipur Hari Shankar Singhania said “we have for
long been a key player in both cement and paper and have
been investing consistently in terms of capacity
enhancement, infrastructure and market development. With
the proposed business re-structuring, we hope to emerge
even stronger and a focused long-term player. |
Freight hike
to hit tyre exports NEW DELHI, March 26 — The steep increase in ocean freight to the US ports since January this year is expected to lead to a 4 per cent erosion in export profitability of the Indian tyre companies. The hike in freight was introduced by 13 major shipping lines under the Transpacific Stabilisation Agreement (TSA). In a presentation on “Indian tyre exports: Perspective & Potentials” before the Board of Exports under the Chairmanship of the Cabinet Secretary a few days back, the Chairman of the Automotive Tyre Manufacturers Association (ATMA), Mr Onkar S. Kanwar, stated that this hike would lead to lower price realisation on tyre export from India. Mr Kanwar also urged upon the government to enhance the duty exemption pass book scheme (DEPB) rate from 20 to 25 per cent. “Exports in the long run have to be a profitable proposition. Export profits of Indian tyres have dwindled in recent years and it cannot be sustained in this manner for long”, Mr Kanwar told the Board of Exports. He clarified that compared to advance licence benefit under the Quantity based Advance Licence Scheme (QABAL) and the Value-based Advance Licence Scheme (VABAL), the current DEPB rate of 20 per cent was not attractive to stimulate exports. Over 30 per cent tyre exports from India are highly demanding the North American market, including tubeless truck tyres. In India all large companies are engaged in sustained exports as a long term commitment. Mr Kanwar briefed the board that the USA is the single largest market for export of tyres from India. Elaborating on the hike in ocean freight to US ports, he said no such hike had been brought about in the case of ocean freight for Chinese exports to US ports, giving China an added competitive edge. “Exports are being done on wafer-thin margins and a 4 per cent decrease in FOB realisation erodes competitiveness of tyre exports from India. The Indian tyre industry is finding it difficult to compete under such circumstances”, he affirmed. Mr Kanwar, who is also the
Vice-Chairman and Managing Director of Apollo Tyres Ltd.,
suggested that the Shipping Corporation of India (SCI)
could provide vessels (1-2 sailing a month to US ports)
and offer competitive rates for Indian tyre exports.
“This would also prompt the TSA members to withdraw
the exorbitant hike in freight to USA or reduce the
impact of steep hike in freight rates. Tyres can be
exported on a break bulk basis, if SCI can provide such
vessels”, Mr Kanwar said. |
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MUMBAI, March 26 (PTI) — Alcatel has agreed to buy out Modicorp’s stake in the joint venture, Alcatel Modi Network Systems Ltd, subject to approval from the foreign investment promotion board. Both companies have
decided to concentrate on their respective areas of
competence, a statement by the companies said. Modicorp
would be focussing on telecommunication services sector
and information technology and has decided to exit from
the telecom equipment manufacturing business, it added.
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‘IBP, Balmer Lawrie can quit jvs’ NEW DELHI, March 26 (PTI) — The government today permitted state owned IBP Co Ltd and Balmer Lawrie and Co Ltd (BLL) to withdraw from their respective joint ventures by selling their equity to their foreign partners. As part of the restructuring, Balmer Lawrie will sell its 50 per cent holding for Rs 21.25 crore at Rs 70 per share (face value Rs 10 per share) to the partner company Fuchs Petrolub AG in the lube marketing company Balmer Lawrie Fuchs. IBP, on the other hand,
will sell 49 per cent of its holding in loss making joint
venture IBP Caltex Ltd to its partner Caltex Oil
Corporation for Rs 19.6 crore at Rs 10 per share. |
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| Forex rates MUMBAI, March 26 (PTI) —The following were interbank forex and RBI rates (in rupees per unit) : US $ Rs 42.39/40 The RBI reference rate was Rs 42.40. Gold falls
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