RIL denies Kingfisher stake-buy talks

Mumbai, November 16
A spokesman for Reliance Industries (RIL) denied on Wednesday a newspaper report that the energy major was in talks to buy a stake in cash-strapped Kingfisher Airlines.

The Business Line newspaper had reported that Reliance might make a financial investment or pick up a stake through a preferential offer by the carrier, which could be followed up by an open offer to public shareholders.

Citing an unnamed person close to the airline, the paper said Reliance was understood to have engaged a merchant banker to carry out due diligence of the carrier.

Ravi Nedungadi, Chief Financial Officer of UB Group, the airline's parent, had said on Tuesday it had been approached by strategic investors.

An official with one of Kingfisher's lenders had also said the carrier's chairman, Vijay Mallya, was talking to a potential strategic investor.

Kingfisher, which reported a September quarter loss of 4.69 billion rupees ($92 million) on Tuesday, cancelled scores of flights last week as it abruptly shut some routes. It has also been late paying salaries.

KF scrip rises over 18 per cent

Bucking the weak broader market, shares of Kingfisher Airlines on Wednesday soared over 18 per cent higher on the bourses, as investors rushed in to buy the stock after a heavy battering of last few days.

The robust buying activities came a day after Mallya assured the investors that the air carrier did not face any closure risks and outlined plans to arrange necessary funds and to lower its borrowing, fuel and operational costs.

Marketmen said the stock also got a boost from the reports about Kingfisher having attracted interest from a potential strategic investor and speculations over some large industrial houses being interested in the airline.

After a firm opening this morning, Kingfisher shares gained further momentum in afternoon trade and settled 18.12 per cent higher at Rs 25.75 on the NSE.

On the BSE, the scrip settled with a gain of 14.42 per cent at Rs 25. During the day, the stock touched a high of Rs 26.05, up 19.22 per cent, at the BSE.

Earlier on November 11, the stock had slipped to its record low of Rs 17.55 amid concerns over its financial health and mounting debt worries.

Mallya yesterday said the airline has sought help from banks to raise short-term funds to the tune of Rs 700-800 crore as working capital, interest concession, and also ruled out its closure.

In a bid to shore up its financial position, the company has filed a Rs 2,000-crore rights issue with market regulator SEBI to raise capital.

It has also applied to Directorate-General of Foreign Trade (DGFT) for direct import of jet fuel to reduce fuel costs drastically. Jet fuel costs are almost 50 per cent of the total operating costs of the airline.

Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of close to Rs 7,000 crore. — Agencies

New Delhi, November 16
Looking to grab a pie of the entry-level sedan market, Czech car-maker Skoda today launched its mid-sized sedan Rapid priced between Rs 6.75 lakh and Rs 9.19 lakh (ex-showroom Delhi ).

Having designed the model specially for the Indian market with the idea of showing its presence in the entry-level sedan market, Skoda Auto India, a part of auto conglomerate Volkswagen, expects the Rapid to become its best-selling car in the country.

A fusion of VW’s Vento and Skoda’s Fabia, the Rapid will be available in both petrol and diesel variants and will be powered by 1.6 litre engine.

“India is a very important market for us. There was a gap between our compact car Fabia and the sedan Laura. To fill that gap, we have launched the Rapid in the C segment,” Skoda Auto India Marketing Head Tarun Jha told reporters here.

With the entry-level sedan market emerging as a strong sector after the compact car segment, the company is looking at selling over 2,000 units every month and has already stepped up its production.

Skoda expects more demand for the diesel variant as there is huge difference in fuel price with petrol.

The petrol variant of Rapid is pitched against the Honda City, while it will be Hyundai for the diesel variant.

The company is also increasing its dealership network to meet the possible increased demand of the Rapid. "Currently we have 82 dealerships and it will be increased to about 100 by the end of this year. Next year, we will add another 20 outlets," Jha said.

The company will target mainly Tier-II and III cities for expansion of its dealership network, he added.

New Delhi, November 16
US-based iGate, which acquired Patni Computer Systems earlier this year, plans to delist the domestic company from Indian bourses by mid-2012.

Patni's American Depository Receipts (ADRs) would also be delisted from the New York Stock Exchange.

iGate intends to commence, through its subsidiaries Pan-Asia iGate Solutions and iGate Global Solutions Ltd, a process that could lead to the delisting of its Indian subsidiary, Patni Computer Systems, the US firm said a statement today.

"iGate believes that given the low liquidity of Patni's equity shares, the Delisting Offer would provide the public investors of Patni with the ability to exit fully from the shares of Patni," iGate CEO Phaneesh Murthy said.

The delisting process, if successful, is expected to be completed by mid-2012.

iGate had acquired a majority stake in Patni in January this year for $1.2 billion in one of the largest deals in the Indian IT sector. Post the open offer, iGate now holds about 82 per cent stake in Patni.

Following the process, equity shares of Patni would be delisted from the BSE and the NSE. — PTI

Chandigarh, November 16
Even as farmers in the region have been up in arms against the sharp hike in prices of fertilisers this year, the country’s largest fertiliser producer, Indian Farmers Fertiliser Cooperative Limited (IFFCO), has said the hike this year has been a result of volatility in currency, mainly sharp appreciation of the US dollar against Indian rupee.

This has led to an increase of Rs 3,500 a tonne in the DAP price. “DAP is imported in huge quantities to meet the domestic requirement. During the past few months, the value of one dollar has increased from Rs 45 to Rs 50. With the volatility in currency and insufficient hedging of dollar by most importers, the prices of DAP have gone up substantially, and we have had no option but to pass on this cost to the farmers,” said US Awasthi, Managing Director, IFFCO, during an interaction with mediapersons here.

He said it was not just the currency volatility that had led to a hike in the prices of fertilisers. “In the past five months, prices of DAP too have increased in the international market. Our demand is mainly met through exports. We exported eight million tonnes of DAP in the last fiscal and are importing six million tonnes during the current financial year. Besides, the rate of interest on the working capital loans have gone up by three per cent, and these factors too have contributed to the high cost of DAP,” he said adding that the government should allocate dollar to IFFCO at a fixed rate so that they could get a cushion from the rising dollar prices.

It may be mentioned that price of DAP has shot up by almost 100 per cent (from Rs 497.50 per 50 kg to Rs 935 per 50 kg) in the past few months, sparking off protests by farmers across all agrarian states. In most places, particularly in Punjab, dealers are forcing farmers to buy wheat seeds along with a bag (50 kg) of fertilisers. As a result, farmers are forced to shell out Rs 1,000 in case they want to buy DAP.

Meanwhile, Awasthi also expressed concern over the indiscriminate use of fertiliser by farmers in this region. He pointed out that they had found indiscriminate use of fertilisers in Bathinda and Mansa in Punjab and Mahendragarh in Haryana. “We have to make concerted efforts to ensure more usage of green manure, bio fertilisers and organic manure, which will help in soil rejuvenation. We could actually take a cue from China, where chemical fertilisers are given only in case farmers use 25 per cent of these organic fertilisers,” he said.

Chandigarh, November 16
In view of continued slow progress of Kundli-Manesar-Palwal (KMP) Expressway project and repeatedly missing out the deadline proposed by the Concessionaire KMP Expressways Ltd - a consortium of DSC Ltd and Apollo Enterprises, the high-powered committee (express highways) has recommended invoking penal action against the concessionaire for delaying the ambitious project of the state.

After detailed deliberations, a decision to this effect was taken in the meeting held here today under the chairpersonship of Urvashi Gulati, Chief Secretary, Haryana.

The penal action would be initiated against the Concessionaire in accordance with the provisions stipulated under clause 15.4 of the Concession Agreement for which a detailed show-cause notice would be issued to him.

The team leader, independent consultant and representative of IDBI Bank, the lead lenders for the project, who were also present in this meeting, also agreed with the decision of the state government.

It was informed that the Concessionaire had been shifting completion targets time and again despite the fact that the said targets in the earlier various review meetings were proposed by the Concessionaire themselves. In the last review meeting, the Concessionaire was asked to give a firm commitment to complete the project, otherwise the state government would not hesitate to invoke action as per terms of Concession Agreement.

It was informed in the meeting that the Concessionaire had achieved physical progress of 63.90 per cent till October 2011 at a cost of over Rs 946 crore with monthly physical progress of about 0.16 per cent at a cost of Rs 2.36 crore only against the original and revised targets.

It was informed that the Chief Minister Bhupinder Singh Hooda had also made aerial inspection of the project site thrice. The Concessionaire, at the review meeting by the Chief Minister on May 19, 2011, had assured to complete the work on the priority stretch of Manesar-Palwal section of the Expressway by August 20, 2011.