New Delhi, March 24
Sunil Bharti Mittal’s dream of gaining a footprint in Africa seems to be nearing with emerging reports saying that the board of Kuwaiti telecom company Zain has approved a $9 billion sale of most of its African assets to Bharti Airtel.

The approval from the Zain board for the sale of assets to Bharti Airtel will mean that India’s telecom operator will emerge as one of the biggest players around the world in the telecom sector.

It will also extend Airtel's reach into African emerging markets dramatically.

Reports said the due diligence on the deal had been completed and the sale documents would be signed within several days.

Bharti will have three months to pay, within which it will have to get regulatory approvals also. The dollar funding is being raised through a special purpose vehicle based in the Netherlands.

Bharti said on Sunday that it had tied up the entire financing requirement of $8.3 billion, with major international banks committing to underwrite the amount which was a sign of progress as the deadline for exclusive talks with Zain expired on Thursday.

The company had said a consortium of banks led by Standard Chartered and Barclays would lend it $7.5 billion and the SBI another $1 billion, a so-called rupee loan. The latter - the rupee equivalent of $1 billion - would be used to cover what the company described as associated transaction costs.

The company had also arranged for money to fund a foray into 3G services, frequency spectrum for which is being auctioned on April 9.

The Airtel board is believed to have approved the acquisition for a so-called enterprise value of $10.7 billion which consists of $1.7 billion of Zain’s debt, which Bharti will now have to pay, and a $9-billion cash payment. Bharti has $1.5 billion of cash on its balance sheet which will be used by the company for the acquisition and in the 3G auction.

Bharti may put part of the purchase price in an escrow account to protect it from any potential issues, including ownership dispute in Zain’s Nigeria operations.

Chandigarh, March 24
India has been steadily integrating itself in the world economy. The primary instruments for the country’s increased commercial engagements with the outside world are international trade and two-way flow of investments. On both these fronts, India has managed to perform well, ensuring that international trade has become the catalyst for the country’s growth.

This was stated by Finance Minister Pranab Mukherjee, while addressing a gathering after inaugurating a branch of Export Import Bank of India here today. This is the 10th branch of the bank which will cater to exporters in Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir and Chandigarh. He said this branch would help facilitate exports from the Northwest region.

The FM said India had recovered from the global financial meltdown and the economy was in a better shape than it was a year ago. “We are now regarded as an economic superpower as we emerged from the global slowdown faster than any other nation. The advance estimates indicate a 7.2 per cent growth in 2009-10. Exports are also recovering with an 11.5 per cent growth in January, 2010,” said he.

“Though there was deceleration in growth of exports, this turned around in November, 2009, and exports are now in the positive domain. On our part, we have extended the provision of interest subvention of 2 per cent on pre-shipment export credit up to March 31 for exports in certain sectors,” he said.

He, however, said the challenge was to achieve the high GDP growth of 9 per cent and find the means to cross the double-digit growth barrier. “The GDP growth was slow because of the financial crisis, but the economy has been witnessing a remarkable recovery. But the concerted pressure of headline inflation arising from high food prices entails the risk of getting transmitted over time, to other non food items. Thus RBI has been using monetary instruments like CRR, repo and reverse repo rates for financial stability,” he said.

Mumbai, March 24
The SBI has decided to raise up to Rs 15,000 crore through a rights issue in the third quarter of the next fiscal and will seek government nod for this as early as next month, a top SBI official said.

"We will do that (approach the government for rights issue) after the close of this financial year. If we go by current estimates, we may require to go (for the rights issue) in the third quarter of the next financial year. The amount will be between Rs 10,000 and 15,000 crore," the official told PTI here today.

The bank had approached the government six-eight months back with its rights issue proposal, assuming that it would need more capital to lend. The bank, however, later decided to put off the plan as credit demand nosedived after the global financial meltdown weakened the ability of corporates and individuals to borrow.

"We had approached the government around six-eight months back assuming that there would be a strong surge in credit demand, which would require capital support. As the demand was low, we thought we could hold back the issue for some time," the official said.

Recently, SBI chairman OP Bhatt had made it clear that the bank preferred a rights issue as it would enable retaining the government's majority holding in the bank. The government owned a tad over 59 per cent stake in the bank. As part of its divestment programme, the government, however, was planning to reduce its holding in the bank to 51 per cent and towards this it tabled a Bill to amend the SBI Act in the Budget session.

The proposed rights issue will come just after the government begins infusing a whopping Rs 16,500 crore in around seven-eight public sector banks, which have a tier-I capital adequacy of less than 8 per cent, in phases. The first phase of this capital infusion--around Rs 9,000 crore--is expected by April-May. — PTI 

New Delhi, March 24
The government has accepted a Labour Ministry proposal to raise the ceiling of benefit under the Employees Deposit-Linked Insurance (EDLI) scheme from Rs 60,000 to Rs 1 lakh, a move that will help over 4.71 crore EPFO subscribers.

"The ministry has written to the Employees' Provident Fund Organisation (EPFO) for increasing the benefit under the EDLI scheme from Rs 60,000 to Rs 1 lakh", an official told PTI here today.

"The ministry has also asked the EPFO to place the matter before its apex body, Central Board of Trustees, for making the necessary amendments in the scheme," sources said, adding that, "The matter will be placed before the EPFO trustees at the April 9 meeting."

Under the existing scheme, an EPFO subscriber gets insurance cover and gets benefit of up to Rs 60,000 in case he/she dies before superannuation.

The unions have been for long demanding this enhancement as the outflow from the EDLI corpus as payment of claims is much less than the receipts. The corpus under the scheme has rose to Rs 7,457.69 crore in 2008-09 from Rs 7,089.29 crore in the preceding fiscal on account on rising contribution. The amount given towards settlement, however, has remained constant at Rs 48 crore during these three years.

In 2008-09, the EPFO received Rs 368.40 crore for the scheme but settled claims of just Rs 48.36 crore. In 2007-08, while Rs 308.40 were contributed toward the scheme, claims were just Rs 48.33 crore. Similarly, the contribution remained higher at Rs 250.65 crore against settled claims of Rs 47.96 crore under the scheme in 2006-07.

Employers contribute 0.5 per cent of basic pay of an employee as insurance premium to the EDLI scheme every month. The benefit under the scheme is given on the basis of the provident fund balance in the subscriber's account.

At present, if a subscriber's PF account balance is up to Rs 35,000 then the benefit will be equivalent to the fund balance only. But in case, the PF balance is over 35,000, the benefit will be Rs 35,000 and 25 per cent of excess balance over Rs 35,000. But this is with a rider: the maximum benefit cannot be above Rs 60,000.

Under the proposed amendment, the subscriber will get the benefit equivalent to the PF account balance, if the account balance is up to Rs 50,000. But if the balance exceeds Rs 50,000, the benefit will be account balance plus 40 per cent of the account balance. — PTI

New Delhi, March 24
Petrol price in cities like Delhi and Mumbai may go up by 41 paise per litre and diesel by 26 paise a litre from April 1 when cleaner BS-IV grade auto fuel will replace the existing grade in 13 big cities, Oil Secretary S Sundareshan said today.

The Oil Ministry is pushing for increasing auto fuel price so that the cost of supplying cleaner fuel does not add to the current Rs 6 per litre loss on selling petrol and Rs 4.06 per litre loss on diesel.

“This (41 paise a litre hike needed in petrol price and 26 paise per litre in diesel rates) is not on the basis of (Rs 40,000 crore) capital expenditure (oil firms incurred in upgrading their facilities to producer cleaner fuel) but a requirement to bring domestic rates to international parity,” he said at the launch of BS-IV supplies here. The actual price hike needed to cover the cost would have been three-four times the proposed increase.

Oil firms will sell ultra-low sulphur petrol and diesel in 13 major cities like Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad and Ahmedabad from April 1, while BS-III grade fuel is to be supplied only in the rest of the country.

Like the cost of shifting from BS-III to BS-IV in 13 big cities, a marginal increase in petrol and diesel prices is also proposed in the rest of the country, which would move from BS-II grade auto fuel to BS-III specification.

However, the quantum of price hike for BS-III fuel has not been finalised as there is delay in upgradation of some refineries, which may result in staggered or postponed launch as late as October 1.

Sundareshan said the “government needs to take hard decisions to prevent revenue loss on auto and cooking fuels from rising to Rs 70,000 crore next fiscal from Rs 47,960 crore this year”.

"Under-recoveries will rise if we do not take very, very hard decisions soon," he said, indicating his ministry's inclination for an increase in petrol and diesel prices.

Countering arguments that hike in fuel prices leads to inflation, he said the government borrowings, mostly to fund subsidies, was responsible to a greater degree for rise in prices.

If fuel prices are not raised further, 2010-11 will see under-recoveries (revenue loss) on fuel sales rising to Rs 70,000 crore, he said. “Unless certain actions are taken, future will be very difficult.”

Advocating increase in prices, he said the upstream companies like ONGC have limitations to how much they can foot the fuel loss bill. — PTI

New Delhi, March 24
Bharti Airtel today said it would sell Apple's iPhone 3GS in the country from March 26.

The handset will be priced at Rs 35,500 for the 16 GB model and Rs 41,500 for the 32GB model, Bharti Airtel said in a statement.

Additionally, iPhone 3G continues to be available in the 8GB version for Rs 29,500, it added.

Equipped with a longer battery life, the handset has a three-megapixel autofocus camera, allows video recording and hands free voice control.

Apple's App Store provides access to more than 1.5 lakh applications across games, social networking, financial planning and health management. iPhone is now available in over 80 countries around the world.

Customers of iPhone 3GS will get 500 MB of free data every month for a year from the date of activation, it said. — PTI

New Delhi, March 24
The ONGC has lost out on acquisition of Uganda oilfields to China's Cnooc, the latest instance Chinese firms, outbidding the state-owned explorer in race for scarce oil properties.

ONGC Videsh, the overseas investment arm of the state-owned firm, was originally interested in acquiring Heritage Oil Plc's 50 per cent share in Block 1 and 3A in the Lake Albert Rift Basin of Uganda, sources in know of the transaction said.

Heritage, however, decided to sell its stake to Eni SpA, Italy's biggest energy producer, for about $ 1.5 billion.

But the deal couldn't go through as the UK's Tullow, which held the remaining stake in the Uganda blocks, exercised its right of pre-emption to block Eni. It matched Eni's $1.5 billion bid and later sought investors to sell the stake. — PTI