The Tribune, Chandigarh, India

Govt mulls divestment in 60 PSUs

New Delhi, November 13
The Disinvestment Department today said it was in talks with administrative ministries of 60 CPSUs, including SAIL, BSNL, Coal India, for selling government stake.

In his first interaction with the media, Disinvestment Secretary Sunil Mitra said, "We are in interactions with the Ministry of Steel for SAIL, we are in interactions with the Coal Ministry on Coal India. On BSNL also, we are in interaction with the IT and Communication Ministry." However, Mitra refused to set a time-frame for the process. A lot of factors have to be taken into consideration before the process is set in motion, he said.

The government recently stated that profitable unlisted PSUs should hit capital markets and all profitable listed PSUs should increase their public holding to at least 10 per cent.

Mitra informed that there are 10 listed PSUs where the public holding is less than 10 per cent and around 50 state-run firms which are profitable but unlisted.

"We are in interaction on a large number of these 60 companies with their administrative ministries. We are in interaction with them but it does not mean that we are close to divesting them... All this is a function of a number of factors," he said.

To a query whether the opposition by Trinamool Congress chief Mamata Banerjee and DMK would mean that PSUs located in West Bengal and Tamil Nadu would not be on the priority list of disinvestment, Mitra said there was no such guidance from the government.

When pointed out that a section of analysts termed the NHPC and Oil India listing as "too aggressive", Mitra pointed out that all PSU shares listed in the past few years are ruling at above their listing prices, except for the hydel power major NHPC. He described NHPC as a long-term stock.

Oil India was listed on September 30 at Rs 1,050 but closed the day at a hefty premium of 8.62 per cent at Rs 1,140.55 on the BSE. Today its shares closed at Rs 1,189 on the BSE.

NHPC was listed on September 1 on an issue price of Rs 36, but it was a dampener with a just 1.94 per cent rise at Rs 36.70 on the BSE. NHPC closed at Rs 32.25.

To a query, whether the government would adopt a mechanism to offer shares to qualified institutional investors at differential prices, Mitra said the government would consider such options for the follow-on public offers.

He refused to name any companies that would be listed other than NTPC, REC and Satluj Vidyut Nigam, which have already been cleared by the Cabinet and would be listed this fiscal itself.

He also refused to put a figure to the amount to be realised by the government from the divestment process.

The listed CPSUs that are making profits and have public holding of under 10 per cent include trading firm MMTC, mining major NMDC, Neyveli Lignite Corporation, Engineers India, State Trading Corporation, Rashtriya Chemicals and Fertilisers, National Fertilisers and Andrew Yule. — PTI

NTPC’s 5 pc selloff to garner Rs 8,100 cr

The government on Friday said it was expecting to raise about Rs 8,100 crore from the five per cent stake sale in power PSU NTPC through a Follow-on Public Offer (FPO). "We anticipate more than three times what we got last time (at the time of IPO in 2004)," Disinvestment Secretary Sunil Mitra told reporters here.

In 2004, NTPC had raised about Rs 2,700 crore through the IPO when the government diluted 5.24 per cent of its stake, he said. The Cabinet Committee on Economic Affairs (CCEA) last month had approved the stake sale in NTPC

Pringle exits Indian market
Shivani Bhakoo/Tribune News Service

Ludhiana, November 13
Famous Scotland brand Pringle has “disassociated” itself from the Indian market for the time being. The brand gained popularity, especially in woollen segment, for more than 15 years in India. The franchisee was given to a local group, Oswal Knit, which has recently tied up with another Italian brand, Gadoni.

Speculations are rife that the Scottish brand will reenter the Indian market by next year with many major Indian players trying their best to tie up with the brand. According to sources, Pringle entered Indian market in 1994 and remained hot favourite among the upper-middle and elite class. Pringle woollen products are priced between Rs 2,000 and Rs 10,000 and above (jackets, pullovers etc).

The agreement got expired recently as the company demanded huge “renewal fee” from the local group.

The sources further added that Pringle was recently taken over by a Chinese national who had asked for several crores of rupees (about Rs 100 crore) for its licence renewal.

British Airways, Iberia to merge

London, November 13
British Airways (BA) and Spanish carrier Iberia have agreed to merge in all-share deal to create a combined entity of 15 billion euros ($22 billion) in revenues.

Under the terms of the agreement, British Airways will hold 55 per cent in the new entity — TopCo —and the rest will go to Iberia. TopCo would be registered in Spain but will have the financial headquarters in London. The new firm will be listed on the London Stock Exchange.

The boards of the two firms have entered into an MoU for the proposed merger. A joint statement from the two said there would be parity at board and management level.

"The airlines believe there is a compelling strategic rationale for the transaction, which is expected to generate annual synergies of approximately 400 million euros ($595 million), and benefit both companies' shareholders, customers and employees," the statement said.

The announcement of merger between the two loss-making airlines comes at a time when the global aviation industry is grappling with the worst crisis it has ever faced. — PTI

Foreign carriers allowed to add capacity
Tribune News Service

New Delhi, November 13
The Directorate-General of Civil Aviation (DGCA) has allowed foreign airlines to mount additional capacity of up to 10 per cent of their weekly capacity entitlements in respective bilateral agreements between India and government of the country of the foreign airline during periods of high air traffic.

Foreign airlines will also not be required to obtain a No-objection Certificate (NOC) from national carrier Air India to launch extra flights that fall under bilateral entitlements.

Fresh guidelines issued by the DGCA have done away with the right of the national carrier to clear extra flights that fall under bilateral entitlements. As per the DGCA, the airline that plans to mount additional capacity should put in a request with it at least one week prior to the proposed date of operation giving full justification for operation of extra-section flight.

Keeping in mind the coming peak tourist season, the DGCA allowed foreign airlines to mount additional capacity of up to 10 per cent of their entitlements during periods of high air traffic.

Gas Row
Allow Centre to be party, pleads RIL
R Sedhuraman
Legal Correspondent

New Delhi, November 13
Senior counsel Harish Salve today concluded his arguments in the Supreme Court in the gas dispute case between the Ambani brothers, Mukesh and Anil, strongly pleading for allowing the Centre to join as a party to the litigation.

"There cannot be any objection if I want to implead the government as a party in my petition," Salve, appearing for Reliance Industries Ltd (RIL) headed by Mukesh, argued before a Bench headed by Chief Justice KG Balakrishnan.

Reliance Natural Resources Ltd (RNRL) led by Anil Ambani is against government's inclusion as it was not a respondent in the case in the Bombay High Court. Salve, who has been making his submissions for 11 days now, raised objection to RNRL making a fresh averment that its Board of Directors had approved the family agreement between the feuding brothers. This point had not been raised in the HC and as such could not be allowed in the apex court, he contended.

Senior counsel Ram Jethmalani, appearing for RNRL, however, said he would justify this point when he got his turn for making submissions. "Everything that I argue here I have to justify by the document in the High Court."

Salve's conclusion, however, did not mark the end of RIL's arguments before the Bench, which included Justices B Sudershan Reddy and P Sathasivam. Senior counsel Rohintan Nariman took up from where Salve ended and argued on the maintainability aspect.

Rohintan said the family MoU between the brothers and their mother, who constituted only three of the two million RIL shareholders, could not be binding on the company. Also, the MoU had not spelt out the suitable arrangement for RIL's demerger.

The RIL counsel would resume his arguments on Tuesday. The court heard the case for two hours in the post-lunch sitting today despite it being a day for miscellaneous cases.

TVS relaunches Flame

Chennai, November 13
Two-wheeler maker TVS Motor Company today relaunched its controversial 125cc motorcycle "Flame" using twin-spark plug technology, over which it had locked horns with rival Bajaj Auto.

The Supreme Court in September had allowed TVS to manufacture Flame with the technology using two igniters for better fuel efficiency.

Bajaj had challenged the Chennai-based firm's using of twin-spark plug technology alleging infringement of patent. The bike priced at Rs 49,200 (ex-showroom), would now come with three valve CC-VTi technology, the company said. — PTI

Textile industry seeks ban on cotton exports
KS Chawla

Ludhiana, November 13
The Confederation of Indian Textile Industry has expressed concern over the largescale exports of cotton and has sought ban on the same for the time being in order to save the Indian textile industry.

A delegation of the confederation met Union Textiles Minister Dayanidhi Maran in Delhi yesterday and sought his intervention in the matter.

SP Oswal, chairman, Vardhman Textiles Mills, who was in the delegation, told The Tribune that they had apprised the minister that if the exports of cotton was not checked, the industry might face the situation of 2007-2008, when large amount of cotton was exported and later it had to be imported at higher rates, adversely affecting the textile industry of the country.

Oswal disclosed that the cotton production in the country was likely to be to the order of 280 lakh bales and consumption was likely to climb to 250 lakh bales. The international merchants were active in exporting cotton from India to Asian markets. Asian countries, including China, imports more than 4.5 million tonnes of cotton.

Oswal further said the delegation pressed upon the minister that the exports of cotton should be suspended for few months so that it could be estimated how much was surplus. The government might allow the export of 30 lakh bales by equally spreading this from October 2009 to March 2010 by giving registration of exports of the order of five lakh bales per month. The minister was also informed that the industry provided employment to millions of people and to keep it competitive internationally, it was the only way to sustain this employment. The industry warned that any abnormal rise in cotton prices consequent to large exports would harm the interest of the industry and employment.

Enquiries made by The Tribune revealed that international exporters had already registered more than 10 lakh bales of cotton for export with the Textile Commissioner of India. They are exporting cotton to China, Bangladesh, Indonesia, Thailand, Pakistan, Taiwan and Turkey. As many as 15,000 bales of cotton have been exported to Pakistan through Wagah border.

In 2008, cotton exports from India was to the tune of 90 lakh bales, which resulted in shortage and India had to import cotton at higher rates.

Inflation a risk to recovery: World Bank

Singapore, November 13
Asian economies must handle their monetary and currency policies carefully to avoid unleashing a wave of potentially destabilising inflation, World Bank President Robert Zoellick said today.

The US and European economies, which are barely starting to recover from the global meltdown, are less at risk, but in Asia the massive liquidity flowing into regional markets could push asset prices up dangerously high, Zoellick said.

"In this region some care must be taken because as we get recoveries ... we could see inflation or some flow into commodities markets or certain asset price markets," Zoellick told a business forum on the sidelines of the Asia-Pacific Economic Cooperation forum.

Stimulus spending and loosened credit and monetary policies have helped spur a recovery in the region, especially in India and in China.

Zoellick noted that Asian central banks, which normally take their cues from the US Federal Reserve, are doubly reluctant to raise interest rates to fight inflation because that will likely push the values of their currencies higher — weakening the potential for growth in their exports by making them less competitive.

Interest rate hikes in the US are not expected in the immediate future out of fears they could threaten the incipient recovery at a time when jobless rates remain at their highest in more than 26 years.

"If the Federal Reserve keeps interest rates low and they keep interest rates low you're going to see this danger I think increase in potential," Zoellick said. — AP

DLF sells DT cinemas to PVR
Tribune News Service

New Delhi, November 13
Real estate major DLF has sold off their cinema exhibition business to PVR cinemas in a cash-cum-equity transfer deal.

The two concluded their negotiations today resulting in agreements whereby DLF would sell its DT cinemas to PVR on a slump sale basis and will have PVR as the multiplex anchor tenant on an exclusive basis in its existing and future retail malls.

According to reports, the cash component of the deal was worth Rs 20.20 crore with PVR further offering approximately 10 per cent stake to DLF resulting in transfer of about 22 lakh shares.