The Tribune, Chandigarh, India

Govt okays Oil India selloff, Rs 2.5k crore stake sale on Friday

New Delhi, January 30
The government expects to raise more than Rs 2,500 crore (US $465 million) by selling a 10 percent stake in Oil India Ltd on Friday, oil secretary G.C. Chaturvedi said on Wednesday. "The proposal has been cleared. Disinvestment will take place on February 1 through the OFS (offers for sale) route. Roughly we will raise Rs 2,500-3,000 crore," Chaturvedi said.

According to sources, shares will be offered at a discounted price. "The price has been determined. It has been communicated to stock exchanges," Petroleum Minister Veerappa Moily told reporters after the EGoM meeting. The government has proposed to sell 10% stake or 6.01 crore shares in the petroleum exploring firm OIL through an offer for sale (OFS). OIL's paid-up capital as on March 2012, was Rs 601 crore.

Shares of OIL were trading at Rs 528 apiece, down 2.14% from its previous close on the BSE in later afternoon trade. At current prices, 10 stake can fetch around Rs 3,000 crore to the exchequer.

The government holds 78.43% stake in the company and would come down to 68.43%, after disinvestment.

OIL issue would help the government inch towards the Rs 30,000-crore disinvestment target set for the current fiscal. The government has so far raised Rs 6,900 crore through disinvestment.

According to the disinvestment roadmap of the government, OIL issue was initially slated to happen in the last week of January, to be followed by one PSU stake sale every fortnight.

The stock has been on fire ever since the government started considering partial decontrol of heavily subsidized diesel prices. A partial deregulation would mean OIL having to pitch in lesser subsidy.

Selling down its shareholding in companies is central to the government's plan to cut its fiscal deficit to 5.3% of GDP in the current fiscal from 5.8% in 2011-12. The hefty fiscal deficit has triggered warnings of a potential credit rating downgrade. — PTI

Hopes to NET Rs 30,000 crore from PSU divestment

The share auction is part of a government disinvestment program through which it plans to sell stakes in several state-run firms to raise Rs 30,000 crore this fiscal to help narrow its ballooning fiscal deficit. The urgency to raise funds as well as favourable market conditions have prompted the government to line up a series of share sales in the remaining two months of the fiscal year. Earlier in January, disinvestment secretary D.K. Mittal said the government would sell stakes in as many as seven companies, including in Oil India, by the end of March. These include a 10.82% stake in SAIL, which has already been approved by the cabinet. Other stake sales on the cards include 12.5% of Rashtriya Chemicals & Fertilizers, and 10% of Engineers India. — Agencies

Toyota to recall 1.1 m vehicles for airbag, wiper glitches

Tokyo, January 30
Toyota Motor Corp will recall 1.1 million cars globally for two separate defects, including 752,000 Corolla and Corolla Matrix vehicles in the United States to fix airbags that could be deployed inadvertently, the automaker said on Wednesday.

It is the third Toyota recall since October to involve more than a million cars, and it comes as the company tries to recover from a damaged reputation following a series of recalls between 2009 and 2011 that were related to unintended acceleration problems. An IC chip in the airbag control unit can malfunction when it receives electrical interference from other parts in the car, causing the airbags to deploy when it is not necessary, Toyota spokesman Naoto Fuse said.

Toyota is also recalling certain Corolla and Corolla Matrix vehicles in Japan, Canada, and Mexico. The problem has caused minor injuries such as abrasions in 18 cases that have been reported, he said. Two accidents have been reported by customers outside Japan, although Toyota has not been able to confirm them, he said.

Toyota will add an electrical signal filter to the airbag control module to the recalled vehicles — repairs expected to take an hour to hour-and-a-half, he said. The spokesman declined to disclose the costs involved.

LIMITED FINANCIAL IMPACT: TRW Automotive Holding Corp has manufactured the airbag control unit in the vehicles, although the problematic chip is supplied by another company, an employee at TRW's Toyota office told Reuters. He declined to say where TRW buys the chips from.

The financial impact from the airbag recall is likely to be limited, possibly costing Toyota about 5 billion yen, said Koichi Sugimoto, a senior analyst at BNP Paribas in Tokyo. Toyota may ask suppliers to compensate, he added. "While this cannot be ignored, this amount is not going to dent Toyota's operations and share prices are unlikely to be impacted much," he said.

Separately, Toyota will also recall 385,000 Lexus IS and its series, including 270,000 Lexus IS vehicles in the United States over wiper problems, Toyota spokesman Fuse said. The wiper arm nut of the front wiper in these vehicles may not be tight enough and the wiper may not work under certain weather occasions, including in snow. Toyota will exchange the nut in repairs that will take about 30 minutes, Fuse said.

Toyota has been showing signs of recovery from the recall crisis and won back the crown as the world's top selling automaker in 2012 from General Motors. — Reuters

Telcos urge government to reconsider spectrum prices
Tribune News Service

New Delhi, January 30
The clamour from telecom operators against the “unsustainable spectrum prices” and the auction guidelines that are “illegal, discriminatory and benefiting one set of players,” is on the rise as the government is putting in place the process for the second round of auction for the unsold spectrum in the 1800 MHz band and the 800 MHz band which had not come up for auction the last time in November last.

While on one side the GSM operators body Cellular Operators Association of India (COAI) has asked the department of telecommunications to reconsider the “unsustainable spectrum prices” for the upcoming auction, country’s second largest operators Vodafone India has sought withdrawal of the recently issued guidelines for the second round of spectrum auction stating that the guidelines were “illegal, discriminatory and benefiting one set of players”.

In a letter to Telecom Minister Kapil Sibal, COAI said: “At the current prices proposed for 1800 MHz and 900 MHz spectrum, the only expected participation is what can be broadly termed ‘coercive participation’, that is, only operators having operations to save may participate under protest”.

BlackBerry 10: It’s the moment of truth for RIM

New York City, January 30
It's the moment of truth for BlackBerry-maker Research in Motion. The Canadian company will officially launch the BlackBerry 10, an effort that some see as the company's last, best chance to remain a player in a smartphone market it once dominated.

RIM, based in Waterloo, Ontario, burst on the scene with the BlackBerry in 2003. That was long before the iPhone and other competing technologies emerged to steal control of the market from RIM with their more consumer-friendly smartphones.

The company boomed as the maker of "crackberries," a nickname stemming from the addiction the phones engendered in users.

But now, unless the Blackberry 10 is a hit, RIM faces becoming a footnote in an increasingly competitive market led by Apple and rivals who use Google's Android operating system.

"The importance of this launch cannot be overstated," said Ramon Llamas, an analyst at the research firm IDC. "There's going to be a lot of work that needs to be done to earn back respect."

RIM touts the system as a big change in smartphone technology.

"This is an entirely new operating system," said company spokesman Nick Manning. "We think it's the first entirely new mobile operating system in about five years."

RIM says the system will break new ground by allowing customers to flip between applications seamlessly and without first passing through a home page, to boost efficiency and multitasking.

Another key asset of BlackBerry 10 is what RIM dubbed the "BlackBerry balance," a system that allows users to separate professional communications and applications from music, photographs and other personal items. Such an option means that if a user changes job, his or her former company can disable the device's corporate side without affecting personal data.

RIM's recent performance on Wall Street suggests the market is open to the BlackBerry 10. Shares have risen more than 30 per cent since the start of the year, although they dropped back over the last two sessions.

Gartner analyst Phillip Redman said RIM still has a strong constituency of business users who prefer its hard keyboard and its reputation for strong network security.

While Redman doesn't think the BlackBerry 10 will surpass Apple's iPhone or Android products, the device "has great comeback potential," he wrote in a recent blog. But others see only a modest opening for RIM given the cutthroat competition in the smartphone market. "We don't buy the hype," Citi analyst Jim Suva said, pointing out rivals such as China's Huawei are also entering the market.

Sterne, Agee & Leach analyst Shaw Wu noted that many of the high-end customers to which RIM is marketing have already migrated to other devices. "We see the company getting a degree of traction in this higher end market, but doubt there is a return to its former glory," Wu said. — AFP

FM confident of resolving Vodafone tax dispute

London, January 30
Finance Minister P. Chidambaram said he is confident that a more than $2 billion tax dispute between Vodafone Group Plc and the country's tax office will be resolved as the two sides continue talks.

Vodafone, the largest corporate investor in India, has repeatedly clashed with Indian authorities over taxes since it bought Hutchison Whampoa's local mobile business in 2007.

"I'm sure some way will emerge out of these discussions. I’ll be very happy if we could find a resolution to the issue, put it behind us and move on," Chidambaram told Reuters TV in an interview in London on Tuesday. "I think Vodafone is of the same view, so both government and Vodafone are keen to resolve the matter and I’m confident we can resolve it," he said.

The Supreme Court in January 2012 ruled that the British company was not liable to pay any tax arising out of the 2007 acquisition. But the government later amended 50-year-old tax laws enabling it to make retroactive tax claims on long-concluded corporate deals, a move which has been heavily criticized.

Government officials and Vodafone have had two rounds of discussions on the dispute and were expected to have a third round of talks in the next few days, Chidambaram said. Finance ministry officials have previously said the government may consider waiving interest and penalty on the original tax demand, however it will prefer to take Parliament’s nod for any such concession.

Chidambaram described Vodafone's case as a "one-off", and said he had "no formula in mind" on resolving the dispute. " It arose out of an interpretation of an existing law. People have criticized it as applying a law retrospectively. I don't want to get into an argument over that, but let's resolve it, put it behind us and move on”, he added. — Reuters

‘Too early to talk of currency war’

“It’s too early to say Japan's aggressive recent moves to weaken the yen constitute a currency war but countries must resist falling into the trap of competitive devaluations”, Finance Minister P. Chidambaram told Reuters TV on Tuesday. However, he said he was worried about the potential impact of any further competitive devaluations on India which counts Japan, China and other Asian states as major trade partners.

Rate cuts to also hinge on current account gap: RBI

Mumbai, January 30
The RBI will base rate cut decisions on the current account position in addition to inflation, governor D. Subbarao said Wednesday. On Tuesday, the central bank cut its key repo rate for the first time in nine months by 25 basis points, comforted by a drop in headline as well and core inflation, and the government's effort to curb its spending. However, a record-high current account deficit, a widening fiscal deficit and suppressed inflationary pressures are likely to limit the room for further monetary easing.

"We’ll take into account what the current account deficit is. It will not be driven just by the inflation number or the inflation trajectory," Subbarao told analysts in a post-policy conference call. — Reuters