General Motors India Vice-President P. Balendran poses for photographs next to the newly launched Chevrolet SRV at a press conference in Bangalore on Wednesday. GM launched the vehicle after it was re-engineered for Indian roads. — AFP

BANK ACCOUNT
Allahabad Bank hires E&Y
Kolkata, July 5
The consortium formed by Allahabad Bank for entering the non-life insurance business has hired consultancy firm Ernst & Young (E&Y) for collecting information about the troubled Japanese partner Sompo, which had been pulled up by the regulator in that country.

Mumbai, July 5
The Tata Group plans to raise its stake in the country’s largest private steelmaker, Tata Steel Ltd, to ward off possible hostile takeover bids, Chairman Ratan Tata said on Wednesday.

Last week, the world’s top steel maker, Mittal Steel, which agreed to a Euro 25.6 billion ($32.54 billion) deal to acquire rival Arcelor had said it was eyeing acquisitions in emerging markets such as China and India.

“The steel industry is highly fragmented and considerably vulnerable... The only safeguard is to increase promoters’ stake over time,” Ratan Tata told shareholders of Tata Steel.

He said the group’s stake in the steel firm, held by holding company Tata Sons and other firms, would rise to 33.6 per cent by the end of this financial year in March 2007 from 26.79 per cent.

Tata Steel has earmarked a capital expenditure of Rs 70,000 crore over the next 10 years, Chairman Ratan Tata told shareholders here today.

Addressing the AGM of the company, Mr Tata said Tata Steel would be spending about Rs 500 crore in the next two years, the normal capex.

Announcing a dividend of 130 per cent, Tata said the company planned to raise about Rs 6,500 crore through a preferential issue over the next two years.

“We will be raising around Rs 6,500 crore and Tata sons will be putting 10 per cent. This fund is necessary for expansion in Jamshedpur, acquisitions at right time and also to meet the requirements of three greenfield project-in Orissa, Chhattisgarh and Jharkhand,” he said. The Jamshedpur plant will have a capacity of 1.8 million tonne per annum.

Tata also stated that Tata Sons would hike its stake in Tata Steel by another 10 per cent to prevent a hostile takeover. At present Tata Sons holds 20 per cent stake in the company.

“The industry will always try to consolidate, as also we are doing via acquisitions, looking at how to get greater scale. The only safeguard we will have, with due respect all shareholders are within their rights to sell, is to increase the promoters’ stake, so that from the promoter standpoint the company continues to be solidly held by major shareholders, which will act in the interest of the company,” Mr Tata said.

Mr Tata went onto state that the group is still to decide on its future course of action on its proposed investment in Bangladesh.

“We have already made a proposal and it is already with the government,” Tata said. The Tata group has proposed to invest $3 billion in power, steel, fertiliser and coal projects in Bangladesh

Last month, Tata Steel said it planned to raise up to Rs 65 billion ($1.4 billion) through one or more equity-related issues, which would increase the company’s paid up capital by 15 per cent.

Tata Sons’ stake in the steel firm may rise to 27.5 per cent of the expanded capital after a preferential issue of ordinary shares, he said.

The first tranche of the issue would raise up to Rs 13 billion in the current financial year, Tata said.

Tata Steel produced more than 5 million tonnes in the year to March 2006 and plans to reach 7.5 million tonnes by 2008.

India is forecast to raise its steel production capacity to 65 million tonnes by 2011 or 2012 from 38 million now.

Easy availability of raw materials such as iron ore and coal and a burgeoning domestic market have drawn global majors such as Mittal Steel and Posco to India.

Nisshin Steel Co. , Japan’s fifth-biggest steel maker, said in May it was considering setting up a steel plant in India to meet growing demand from Japanese car makers in Asia.

Tata Steel itself has looked overseas for acquisitions and bought two companies, Thailand’s Millennium Steel Plc and Singapore’s NatSteel Ltd, in two consecutive years to 2005.

New Delhi: Days after succeeding in merging his company Mittal Steel with rival Arcelor to create the world’s biggest steel conglomerate, India-born L N Mittal is arriving here on Friday to explore new business opportunities and take stock of the company’s India plans.

Mittal is scheduled to arrive here on July 7 and is likely to meet Prime Minister Manmohan Singh, Petroleum Minister Murli Deora and other ministers, besides Orissa Chief Minister Navin Patnaik.

The visit assumes significance as Mittal had said last month after the Arcelor Board recommended the merger that his next focus would be India and China for expansion.

Besides steel and mines, Mittal is also learnt to have expressed interest in the country’s hydrocarbon sector. Mittal Steel already has a tie-up with state-run Oil and Natural Gas Corporation for exploration. He would probably take up the issue when he meets Singh and Deora during the visit.

The steel baron would also review the progress made in the 12 million tonne steel plant project at an estimated investment of Rs 40,000 crore in Jharkhand, for which he had signed an MoU with the state government last year.

According to a statement by Orissa government, Mittal is likely to meet Patnaik on July 7 and may discuss investment plans in the state.

On the eve of his India visit, Mittal today got the regulatory approvals from Spain, Luxambeourg, France and Belgium and moved a step closer to complete the 33.9 billion dollar deal to create Arcelor-Mittal. — PTI

New Delhi, July 5
With the telecom growth projected to touch Rs 500 million by 2010 in the country, operators have decided to share passive infrastructure like tower and antenna to reduce the operating costs and reduce the problem of call drop to subscribers.

Sharing of passive infrastructure like towers by telecom operators will save significant resources to fund further roll out, enhance aesthetics of the environment and lower the costs per operator, Union Communication Minister Dayanidhi Maran today said while unveiling project MOST -Mobile Operators Shared Towers.

Minister for Urban Development Jaipal Reddy inaugurated the flagship shared towers located at Delhi High Court, Rajokri and Dhansa, while Mr Maran flagged off the Project MOST for other towns and city in the country.

Mr Maran stated that these sites represent prototype and would be replicated in other parts of the country.

He said the project team in a short period of 100 days brought together both GSM and CDMA operators, public and private sectors players and independent infrastructure providers to establish infrastructure creation on sharing basis.

He said: “With Indian operators offering one of the lowest mobile tariffs in the world, we in India have to look at all possible solutions to improve our costs efficiencies and offer increasingly affordable services to our customers.”

In rural areas also shared infrastructure for mobile roll out would be launched shortly, he said, adding for that, a detailed exercise is being undertaken to identify villages in the rural and remote areas which are not covered with a wireless signal and with Universal Service Obligation Fund (USOF) assistance.

It is proposed to create shared infrastructure which will enable telecom service providers to provide cellphones in the identified rural areas. Mr Maran said between 8,000 and 10,000 towers are likely to be set up and this will ensure that almost 85% of the area of the country with wireless signal after completion of the project.

Meanwhile, Himachal Exicom Communications Ltd (HECL), a leading provider of telecom solutions in the country said it will provide nanoGSM to customers throughout India, allowing operators to extend network reach to remote parts and to improve in-building coverage.

New Delhi, July 5
It is not only L.N Mittal with an Indian address who is raring to take on the global companies in steel sector, but Indian companies like Mahindra & Mahindra, Essel Propack, Nicholas Piramal from different sectors are making strategic investment in countries like UK to expand their global reach.

“With Indian businesses investing £1.02 billion into the UK, India now ranks as the third largest foreign investor in the UK globally, and the second largest from the Asia-Pacific region,” British High Commissioner to India, Sir Michael Arthur said today.

Indian foreign investment projects into the UK increased by a staggering 110 per cent in 2005-06, Mr Arthur said. During 2005-06, the UK recorded a total of 76 investment projects from India.

Having been on the top 10 FDI league table for several years, and now third Indian companies seem to be using the UK as their international base and gateway into Europe.

According to 2005-06 UK Investment Review Report’ authored by Mr Mark Dolan, UK Trade & Investment Deputy Director India, Inward Investment: “The flow of Indian investment to the UK has turned from a trickle in the late 1990s to a flood, with the scope and breadth of projects rapidly expanding. While IT remains the dominant sector for investment, there is strong growth in investments in pharmaceuticals and engineering as well.”

In 2005-06, 1,217 foreign companies from around the world chose to invest in the UK - a 14.3 per cent increase over the previous year. The US, with 446 projects, Japan, with 84 projects, and India, with 76 projects are the top three investors.

The 76 new projects from India include 39 from Mumbai, 10 from New Delhi, 22 from Bangalore, Chennai and Hyderabad, and 5 from Kolkata.

Mr Rajeev Sawhney, Corporate Vice-President, HCL Europe, said: “HCL has created employment of over 2,000 there and has contributed to the local economies in its own way.”

Among other major Indian companies, which are aggressively investing in the UK include Essel Propack Ltd — the world’s largest packaging company with estimated 32 per cent global market share. It has acquired Arista Tubes and Telcon Packaging in the UK for a combined value in excess of £6.4 million, and safeguarded 200 jobs.

The company plans fresh investments worth £2.7 million in the UK. Nicholas Piramal India Limited (NPIL)- global leader in healthcare from India, has also acquired global marketing rights and technical know-how of Inhalation Anaesthetics business from Rhodia Organique Fine Limited, UK, for £8.9 million, besides acquiring another UK company, Avecia Pharmaceuticals Limited, for £9.5 million.

State owned State Bank of India has also recently opened branches in Manchester, Leicester and Birmingham.

El Forge, a Chennai-based supplier of automotive components, acquired Shakespeare Forgings Limited, Birmingham, which serves the auto, agricultural and mining sectors in the UK.

Mumbai, July 5
Liquor baron Vijay Mallya is believed to have acquired Bouvet-Ladubay, the wine subsidiary of French champagne major Taittinger for $15 million.

The deal, expected to be signed soon, will enable UB’s spirits subsidiary, United Spirits Ltd, to get into premium wines, sources said.

When contacted, a UB spokesperson said: “We have made a bid for Bouvet-Ladubay. But at this point of time, we are making no further comments.” Earlier, UB had made a bid to acquire Champege Taittinger for Rs 3,000 crore but US private equity firm Starwood Capital, which bought the European champagne major last year from its French promoters, sold it to Credit Agricole backed by the Taittinger family.

However, it decided to sell the wine subsidiary separately.

Founded in 1851, Bouvet-Ladubay, which is described as one of the most respected wine-producing firms in Europe, is located in the French Loire Valley region.

In a bid to foray into the growing wine market in the sub-continent, UB Group plans to import Bouvet-Ladubay’s range of wines with the acquisition.

“We will use its technology to develop our own vineyards and wineries in India, for a sustainable growth and leverage our leadership in the spirits market,” UB Group Chairman Vijay Mallya has said.

Last year, UB Group had acquired Shaw Wallace for $354 million, which made the Indian liquor major the world’s second-largest spirits group. — PTI

Kolkata, July 5
French financial services major Societe Generale in partnership with the Burmans of Dabur has picked up 75 per cent stake in Apeejay Finance, a subsidiary of city-based Apeejay Surendra Group.

Announcing this here today, the Apeejay Surendra Group said the deal for the divestment was signed on June 30 and the transaction was subject to the regulatory approvals of the Indian authorities.

The group, however, did not reveal the value of the deal, but said it retained 25 per cent stake in the company.

Commenting on the deal, Apeejay Group Chairman Karan Paul said: “The strategic partnership will bring in valuable contributions from our partners in terms of funding, processors and distribution network and this will drive the performance of Apeejay Finance to new heights”. The investment in Apeejay Finance is being led by Mr Mohit Burman of Dabur Group, who had previously been responsible for the Burman family’s foray into insurance and banking, and Mr Gaurav Burman, who is a principal at Promethean Investments, a private equity fund that is listed in UK’s AiM market.

Kolkata, July 5
The consortium formed by Allahabad Bank for entering the non-life insurance business has hired consultancy firm Ernst & Young (E&Y) for collecting information about the troubled Japanese partner Sompo, which had been pulled up by the regulator in that country.

Chairman and Managing Director of Allahabad Bank O N Singh said that the consortium had retained E&Y since the consultancy firm has a big network in Japan.

He said that E&Y would collect information about the nature of the problems, which Sompo was facing and was expected to submit its report within a week’s time.