Govt partially withdraws export ban on cement
The Ministry of Commerce & Industry partially withdrew the ban imposed on the export of cement. Cement exports have now been allowed from the ports situated in Gujarat. Similarly, cement exports have also been allowed to the units in SEZ and to Nepal. "The existing ban on export of cement and cement clinker shall not be applicable to export from ports of Gujarat," the Directorate General of Foreign Trade (DGFT) said in a notification. The Government had banned export of cement on April 11 to increase availability of the construction material in the domestic market and keep a lid on spiraling prices. "As much as two million tons of cement would be exported annually from the Gujarat ports," Commerce Secretary Gopal Pillai said.
SBI hikes rates on select deposits
Tight liquidity conditions forced State Bank of India (SBI) to revise interest rates on domestic term deposit rates by 25-50 basis points with effect from June 1. The country's biggest bank raised the interest rate on 3-5 year deposits by 35 basis points to 8.85%, while on 5-10 year deposits the rate was hiked by 50 basis points to 9%. On 2-3 year deposits, the interest rate was increased by 25 bps to 8.75%. For senior citizens, SBI carved out two new deposit schemes. Instead of the 2-10 year deposit, the bank announced two new schemes i.e. 3-5 years and 5-10 years. The interest rate on these two schemes will be 9.35% and 9.5%. "We have a fair size of long-term loan portfolio in housing and infrastructure projects. We need funds for these projects. This marginal hike is to enable us to raise funds for such projects," said Ashok Mukand, Deputy MD and CFO, SBI. But other public sector players ruled out an immediate hike, saying margins will come under pressure.
Monsoon yet to reach Kerala
India's June-September monsoon is expected to reach Kerala in the next 3-4 days, missing the previous forecast of May 29, the India Meteorological Department (IMD) said. "There is no indication that it has hit the Kerala coast," R.C. Bhatia, director general of IMD was quoted as saying. "The onset forecast model suggests that the monsoon onset over Kerala in is likely to be on May 29 with a model error of ± 4 days," the IMD says on its web site. In 2007, IMD predicted May 24 as the date of monsoon onset over Kerala. Actual monsoon onset took place 4 days later. The mean monsoon onset date over Kerala is 1 June, according to the weather bureau. With strengthening and deepening of monsoon winds and widespread rainfall activity, southwest monsoon advanced into southeast Bay of Bengal, Andaman and Nicobar Islands , and north Andaman Sea on 12 May, almost 8 days in advance, the IMD says.
RCOM to acquire UK's Vanco
Reliance Globalcom, subsidiary of Reliance Communications (RCOM), announced signing of an agreement to acquire the London-headquartered Global Managed Network Services, VANCO Group through one of its wholly-owned subsidiary. The acquisition of VANCO would add US$365mn (Rs15.50bn) to the annual revenue of Reliance Globalcom through secure Long-term contracts with largest enterprise customers. Among the most valuable companies in Managed Network Services Vanco's peak market capitalisation was over US$750mn (Rs30bn). Under the acquisition agreement, Reliance Globalcom would pay US$76.9mn (Rs3.27bn) to acquire 100% equity of VANCO Group free of debt. VANCO Managed Network services are currently available in over 40,000 locations across 163 countries. 90% of VANCO's revenue is from developed markets of UK, US, France and Germany.
Tata Motors to raise Rs72bn via 3 Rights Issues
Tata Motors said it would raise about Rs72bn through three simultaneous but unlinked Rights Issues. The company will raise up to Rs22bn from the first Rights Issue of equity shares. It will mop up a further Rs20bn from the second Rights Issue of 'A' shares carrying differential voting rights (1 vote for every 10 'A' shares). The third Rights Issue will raise up to Rs30bn from 5-year 0.5% Convertible Preference Shares (CCPs), optionally convertible into 'A' shares after three years but before five years from the date of allotment. The precise terms of the issues will be decided when they are ready to be made. On completion of the Rights Issues, Tata Motors will also, as already announced earlier, raise about US$500-600mn through an appropriate issue of securities in the foreign markets. The fund raising will be mainly used for financing the Jaguar-Land Rover acquisition which is expected to be completed shortly at an acquisition price of US$2.3bn. Though the initial acquisition cost will be financed through bridge loans provided by a syndicate of banks, these banks would be fully repaid through the above mentioned capital raising schemes.
Israel's Taro Pharma said it was terminating a merger agreement with Sun Pharma, saying that the deal is no longer in the best interests of the company. The Indian company responded by saying that Taro is not entitled to terminate the merger as per the original agreement. In a letter addressed to Barrie Levitt, Chairman of Taro, Sun Pharma chief Dilip Shanghvi said the proposed merger is in the best interests of all Taro shareholders. "We remain skeptical of Taro’s turnaround. Taro has only US$47mn in cash as of March 31, 2008. This means that, if not for Sun’s cash injections of about US$60mn last year, Taro would have virtually negative cash - hardly the dramatic improvement of which Taro has boasted," Shanghvi said. He also said that while Sun has made every effort to fulfill its obligations under the merger agreement, Taro has failed to honor its side of the bargain and take all necessary action to consummate the merger. "Further, Taro has ignored Sun's attempts to discuss, and put forward to it's shareholders, an increase in the merger consideration in order to complete the transaction," Shanghvi said. Shanghvi also noted that in light of Taro’s actions, Sun will now consider all of its options, including legal proceedings.
Oil India, IOC to acquire 4 blocks in Libya
Oil India signed Exploration and Production Sharing Agreement with the National Oil Corporation of Libya, along with its consortium partners - Sonatrach (the national oil company of Algeria) and Indian Oil Corp. (IOC). The consortium will acquire four exploration blocks in Libya. These blocks have a total area of 6,934 sq kms in the south western part of Libya, around 700 kms from Tripoli, adjoining the Algeria border. Estimated reserves from the identified prospects indicated more than 2.0 TCF gas and 95 mmbbl condensate with possible oil considered as an upside. The consortium is committed to a minimum work program of 2000 km of 2D, 2600 km of 3D and 8 exploration wells, at an estimate cost of US$152mn.
IBull Realty arm may raise up to US$286mn in Singapore
Indiabulls Properties Investment Trust could raise up to S$388.3mn (US$286mn) selling units in a real estate investment trust (REIT) in Singapore, according to reports. The trust, part of Indiabulls Real Estate Ltd., plans to sell 353mn units of Indiabulls Properties Investment Trust at between S$1 and S$1.10. This will be the first such sale by an Indian real estate company. Lakshmi Mittal, the world's fourth-richest man, has reportedly agreed to buy 91mn units. Mittal was among the initial investors in Indiabulls Financial Services Ltd., which last year spun off Indiabulls Real Estate as a separate company. The projected yield for the trust is 4.66-5.12% based on forecast income for the year ending March 2009. Deutsche Bank and Merrill Lynch are handling the issue, which will see Indiabulls inject into the trust two projects with a total of 3.4mn square feet of space.
Bajaj Auto, Bajaj Finserve cool off on listing
Auto major Bajaj Auto got listed on the bourses after the company's demerger into three separate companies. The stock started trading at Rs784. The stock ended the week at Rs574 after hitting a high of Rs945 on listing day and a low of Rs543. Bajaj Finserve, the group's financial services arm, also got listed. The stock got listed at Rs530 and ended the week at Rs645 after touching a high of Rs999 on listing day and a low of Rs490. Bajaj Finserve comprises financial services and wind farm businesses of Bajaj Auto and has major presence in insurance, consumer finance and distribution space. Apart for this, Bajaj Finserve is considering a foray into the MF business. Bajaj Auto was de-merged into three new entities - Bajaj Holdings & Investments, Bajaj Auto and Bajaj Finserv. Bajaj Holdings, formerly Bajaj Auto, now functions as an investment company and focuses on new business opportunities. The new Bajaj Auto focuses on the auto business, while Bajaj Finserv is engaged in wind energy generation, insurance and finance.