The Tribune, Chandigarh, India

Stake Sale
Diageo, UB Group talks fail

New Delhi, August 25
World's largest alcohol player Diageo's protracted efforts for a pie in India's liquor king Vijay Mallya's group firm failed today but neither side gave reasons for the abrupt ending.

The British firm was to buy 15 per cent stake in Mallya's United Spirits Ltd (USL) and the two firms were in talks since early this year for the sale of USL's treasury stock, created by amalgamation and demergers and not traded on exchanges.

The deal would have added global brands like Johnnie Walker Black Label and Smirnoff to the USL stable, which already has McDowell's No.1, Romanov, Royal Challenge and Black Dog in portfolio.

A top USL official confirmed the development but did not want to be identified.

Meanwhile, when contacted, the company spokesperson said that he would need to check the details and get back.

UB Group was planning to retire a portion of its debts through the stake sale to Diageo, which eventually was keen on picking up more than 15 per cent in India's largest spirits maker.

In May 2007, UB had raised a debt of £595 million for buying Scotch major Whyte & Mackay.

The UB Group, however, was not interested in selling more than 15 per cent in USL because under the SEBI rules the move would have triggered an open offer for another 20 per cent share, which would have helped Diageo match promoter's shareholding in the company.

Until recently, the UB Group had maintained that the negotiations between the two companies were on, although Mallya had said that the delay in the finalisation of the deal was on account of anti-trust and monopoly issues.

The UB Group had recently sold 10.27 per cent stake in USL to a private equity firm for about Rs 950 crore to retire a part of debt.

In 2005, Vijay Mallya-led United Breweries acquired Shaw Wallace & Company, following which it was merged with the group's flagship company USL last year.

As a result of this merger, about 17 per cent treasury stock was created.

The group has been looking at raising up to $300 million through stake sale in USL.

"We are looking to raise another $250-300 million through the sale of stake in United Spirits Ltd ... It could be a mix of treasury stock as well as other shares," UB Group CFO Ravi Nedungadi had told PTI.

United Spirits has over 150 products in its portfolio. — PTI

NTPC-RIL Row
Govt to file petition in SC this week

New Delhi, August 25
Moving to protect NTPC’s interest on sourcing gas from Reliance Industries, the government will this week file an application in the Supreme Court stating that its decisions on pricing of the fuel are without prejudice to the PSU’s case against the Mukesh Ambani firm.

A ministerial panel headed by Finance Minister Pranab Mukherjee today decided to clarify before the apex court that the $4.20 per mmBtu price fixed for RIL’s KG-D6 gas was without prejudice to the state-run firm’s case seeking the fuel from RIL at $2.34 per mmBtu price committed in 2004.

A source said the interlocutory application would clarify that NTPC’s case against RIL was different from the dispute between the Mukesh Ambani-run firm and RNRL run by his brother Anil Ambani as its price was based on arms-length global bid.

On the other hand, RNRL’s claim over KG-D6 gas was based on a private family agreement.

The application would also say that RIL cannot take refuge behind the government stand that it alone had the right to approve gas pricing to deny NTPC gas, as the $4.20 per mmBtu price would apply to all power plants of the state-firm barring Kawas and Gandhar expansion projects for which RIL had committed $2.34 per mmBtu.

NTPC, the source said, will not file any petition to become a party to the RIL versus Anil Ambani Group firm RNRL court case in the Supreme Court but was free to appeal in the apex court on any aspect of its case against RIL in the Bombay High Court. — PTI

Specturm sharing may be allowed
Tribune News Service

New Delhi, August 25
The government is considering a proposal of allowing telecom operators to share frequency in an effort to avoid congestion owing to an acute shortage of spectrum. “The DoT is looking at the proposal to allow sharing of spectrum," Telecom Secretary Siddartha Behura said on the sidelines of a function here.

He added that the matter had been referred to telecom regulator TRAI, which will give its comprehensive report to the government. The move would allow mobile operators with relatively less number of subscribers to share spectrum with other players.

9 pc growth will require longer time: FM

New Delhi, August 25
Faced with the impact of the global downturn as well as drought, the government said today it would take "longer time" for the country to achieve the 9 per cent growth as witnessed before the financial crisis hit the world in September, 2008.

"To achieve 9 per cent growth (it) will require little longer time", Finance Minister Pranab Mukherjee said, participating in a function organised by a private TV channel.

Mukherjee said this fiscal "we will have six per cent plus growth." "Whether that will be 6.5 or 6.2 per cent I cannot say. To achieve 7 to 8 per cent, (it) will be possible in the short term." Promising to continue reforms in various sectors of the economy, the minister said, "the process (which) began in the early 90s will continue in the right earnest so that the economy is back on the path of 9 per cent growth at the earliest." Having grown by nine per cent during the three years ending March 2008, India's economic growth rate slipped to 6.7 per cent during 2008-09, mainly on account of the impact of the global financial crisis.

With 246 districts out of a total of about 600 facing drought, the growth rate is estimated to decelerate further to little over 6 per cent. The Reserve Bank of India in its first quarterly review of the credit policy projected 6 per cent growth rate for the current fiscal with upward bias. — PTI

Maruti rolls out new Estilo
Tribune News Service

New Delhi, August 25
Country’s largest carmaker, Maruti Suzuki India Limited (MSIL), today launched an improved version of its small car Estilo with a fuel-efficient engine. Estilo, earlier Zen Estilo, which had replaced the orginal Zen model, has been brought into the market at an introductory price of between Rs 3.12 lakh and Rs 3.95 lakh (ex-showroom, New Delhi).

The new 998 CC petrol car is equipped with the latest K-series engines, on the lines of the company’s other small car models - A-Star and Ritz. It is available in eight colours, including four new ones - ecru beige, emerald blue, dusky brown and quantum orange - apart from the existing silky silver, superior white, bright red and midnight black.

“Product upgradation is an integral part of Maruti Suzuki’s business strategy and future plans. This is a way to include feedback from the customers and offer better products that match their tastes,” MSIL managing director and CEO Shinzo Nakanishi told reporters here.

MSIL would be looking at replacing engines in all its earlier models with fuel-efficient KB-series engines.

According to the Automotive Research Association of India, Estilo would run 18.2 km per litre of petrol.

The hatchback will be manufactured at MSIL’s Gurgaon plant, which also manufactures the A-Star and the Ritz.

Jet pilots threaten stir
Tribune News Service

Mumbai, August 25
More than 600 of the 650 pilots belonging to Jet Airways have issued a strike notice to the carrier threatening to go on an indefinite strike from midnight of September 7 to protest the sacking of two of their colleagues who were involved in the formation of a trade union.

The pilots of the private airline had floated the National Aviators’ Guild to represent them before the management. However, even before the union was formed, the airline sacked Captain Balaraman and Captain Sam Thomas. The guild has issued a 14-day mandatory notice to the airline management apprising it of its decision to go on strike.

In a statement released here, Jet Airways confirmed the receipt of the strike notice. “Jet Airways assures its guests that appropriate action will be taken to ensure that there is no disruption in its operations and no inconvenience is caused to passengers,” the airlines said in its statement, adding that the Regional Labour Commissioner (Central) has taken up the issue and is working to bring about reconciliation.

Strike illegal, says airline

New Delhi: Jet Airways on Tuesday said the decision of its newly constituted pilots’ guild to go on indefinite strike from September 7 in protest against sacking of their colleagues was illegal. The airlines also refused to recognise the newly constituted union of the pilots, the National Aviators Guild. — IANS

Free Trade Agreements ‘detrimental’ for Punjab
Shivani Bhakoo
Tribune News Service

Ludhiana, August 25
Industrialists of the state have raised concerns over the way the Central government is signing Free Trade Agreements (FTAs) with a number of countries. They believe the interests of the industry need to be watched closely while signing such FTAs, especially those dealing with automobile parts.

Leading companies like Maruti, Tata and Hero Honda are presently the major buyers of automobile equipment being manufactured in the state.

President of Associated Chamber of Commerce and Industry PD Sharma said the Government of India intended to have trade agreements with several countries, including Australia, New Zealand, South Korea and Indonesia etc. With this, the small-scale industry of Punjab and other states would go limp with the influx of imports. Large-scale industry would be the least affected as they are able to include the products of their interest in the negative list of the agreement. Moreover, large-scale industry mainly deals with finished products whereas the small-scale industry deals with components, Sharma said.

Ravi Bindra, a dealer in automobile parts, said states having ports were at an advantage because imports and exports happen at ports. Similarly, places near the sources of raw materials and markets too had some benefits. Hence, FTAs were detrimental for Punjab in particular.

The industry feels that for FTAs to work equitably it was essential that working environment between the countries should be similar. There is a fear that Punjab’s industry will not be able to survive the import influx from developed countries like South Korea under the FTAs. “The prices of raw material in our country rise without any economic consideration. For the FTAs to be profitable, the basic principle should be that import duties on raw material in both countries should be similar,” Bindra stressed.

Air India staff to get pay on time

New Delhi, August 25
Cash-strapped Air India today said it would not delay the payment of salaries to its employees this month even as a large number of staffers staged protests in different parts of the country.

Representatives of as many as 14 unions also held negotiations with the management on issues, including payment of productivity-linked incentives (PLI) and other allowances with Air India CMD Arvind Jadhav and his team of officials here till late evening.

Ahead of the meeting, an airline spokesperson said "Air India will disburse the August wages/salaries to its employees on schedule, that is on the last day of the month, as is the practice." It is understood that the management has proposed to merge PLI with the basic pay of various section of employees and match them with the scales and allowances recommended by the Sixth Pay Commission and in accordance with the Department of Public Enterprises (DPE) guidelines.

At their earlier round of meeting in Mumbai last week, the management has decided to cut incentive payments by half.

The unions, which staged protest hunger strike at various places across the country, held their own meetings on their future course of action. Some have already decided not to go on a full-fledged strike keeping in view Air India's health. — PTI

Tata defends JLR buyout

Mumbai, August 25
Tata Motors chairman Ratan Tata today said the global financial crisis has posed challenges to marquee brands Jaguar and Land Rover, but the $2.3-billion acquisition of the iconic brands was "worthwhile".

"There has been a lot of commentary, expert opinion alluding that JLR acquisition was too high priced and endanger our well-being. I emphatically refute this. Yes, there could be challenges; it's not caused by the product or portfolio.

It's caused by the global phenomenon," the Tata Motors chairman said at the company's Annual General Meeting here.

"The acquisition was very much worthwhile. One or two years is not anything in the life of a corporation. What you see is not because of acquisition, but what followed it," he added. — PTI