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Saturday, December 19, 2009
Dubai gets last minute aid from Abu Dhabi
Abu Dhabi gave US$10bn in loan to Dubai for repaying part of the debt held by Dubai World and its property unit Nakheel. Out of this, US$4.1bn will be used to repay Nakheel's Islamic bond, or sukuk, that matures. The remainder of the funds will be used to finance Dubai World's needs up until the end of April 2010. "We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices," Sheikh Ahmed bin Saaed al-Maktoum said in a statement. "Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come," Saaed al-Maktoum said. Abu Dhabi is the largest member of the United Arab Emirates federation and a major oil exporter.
Dubai rocked world markets in late November when it requested a freeze on debt payments by Dubai World in order to restructure the conglomerate. Nakheel's bond had been seen by many as a litmus test for Dubai's ability to repay more than US$80bn of government and corporate debt. Media speculation that Nakheel's debt woes could soon be over helped boost shares in Dubai last week. In its statement, Dubai said that it will focus on addressing the concerns of Dubai World's creditors and will start discussions with creditors and contractors shortly. Separately, reports stated that the United Arab Emirates (UAE) central bank will be there to inject liquidity as needed into banks that face exposure to Dubai World
Time Warner to acquire NDTV Imagine
Time Warner Inc said that it will acquire NDTV Imagine Ltd. from NDTV Networks Plc, an indirect subsidiary of NDTV Ltd., for US$126.5mn (about Rs5.92bn). "The acquisition will be made by Turner Asia Pacific Ventures, a Time Warner company, and Imagine will become a key part of Turner's operations in the Asia-Pacific region," Time Warner said in a statement. Imagine is one of the leading Hindi general entertainment channels and also owns other entertainment assets in India. Turner Asia Pacific Ventures Inc. will get around 92% stake in Imagine. The remaining 8% stake in Imagine will be held by the current management, participants in its employee stock ownership plan and NDTV Networks Plc. After the deal closes, Imagine will continue to be led by Sameer Nair as CEO. Turner Asia Pacific will invest US$76.5mn for 87.4% stake in Imagine from NDTV Networks Plc and another minority shareholder. However, it did not disclose how it intends to acquire the remaining 5%. Turner Asia Pacific would also put in a further US$50mn as primary capital infusion to fund business. NDTV Chairman Prannoy Roy said, "NDTV Group will be in a position to be cash-surplus and debt -free on a consolidated basis." The sale by NDTV would also mark the conclusion of restructuring of its subsidiary, NDTV Networks Plc, Roy said.
Hindustan Unilever alters trademark pact with Unilever
Hindustan Unilever announced that its Board of Directors approved amendments to the existing Technical Collaboration Agreement (TCA) with Unilever Plc to include: (i) additional product categories where technical inputs are provided by Unilever and (ii) products of specified categories manufactured by third party manufacturers where technical inputs developed by Unilever are made available to the third party manufacturer. In addition, the company's Board approved a trademark license agreement with Unilever which provides for payment of trademark royalty at the rate of 1% of net sales on specific brands, where Unilever owns the trade mark and HUL is the licensed user. The above amendments are within the Government of India guidelines for payment of royalty. The revised TCA and the trademark license agreement will come into effect from January 1, and will enable the company to continue to leverage Unilever's capabilities to further build and grow the business in India.
Suzlon repays acquisition loan
Suzlon Energy repaid US$780mn (around Rs37bn) acquisition loan. This has also made the company achieve a net reduction in overall debt by US$350mn (around Rs17bn). The payment was made from proceeds of a partial stake sale in Hansen Transmissions International NV, in addition to a new five-year US dollar denominated loan of US$465mn (around Rs21.9bn) from State Bank of India (SBI). The company did not elaborate on the loans that have been repaid. But the firm had raised finances to acquire Hansen and Germany’s Repower Systems. "This transaction concludes the first phase of our refinancing exercise. We have achieved an overall improvement in our debt profile, with reduction of nearly 15%. We continue to work towards optimising our capital structure," said Sumant Sinha, COO of Suzlon Energy. The company in is filing to the stock exchanges said that the new five-year US$456mn loan provides for a two-year moratorium on repayments of principal as well as two-year holiday on debt covenants.
Bharti Airtel eyes Bangladesh's Warid Telecom
Bharti Airtel is reportedly planning to buy a 70% stake in Bangladesh operator Warid Telecom. The size of the acquisition is estimated around US$900mn, according to reports. India’s leading cellular operator has applied to the Bangladesh Telecommunications Regulatory Commission (BTRC) for permission to buy a 70% stake from the Abu Dhabi group, the owner of Warid, the regulatory body’s chairman Zia Ahmed was quoted as saying. A Warid Telecom executive said that Bangladesh' fourth largest telecom operator and Bharti Airtel were in exclusive discussions on similar lines as the deal between Essar group and the Abu Dhabi group. The Essar group announced last month that it is investing in Warid Telecom’s operations in Uganda and the Republic of Congo, valuing them at a total of US$318mn. Akhil Gupta, deputy CEO of Bharti Enterprises Ltd. had earlier said that the company has always been interested in acquisition opportunities in Bangladesh and other markets in South Asia. The development comes just two months after Bharti Airtel failed in its second attempt to merge with South Africa’s MTN. Warid has under 3 million customers, or about 5.5% of the country’s 52 million cellular subscribers. Reports citing Dhabi group CFO Ali Tahir said that Warid expects to seal a deal by mid-January 2010.
DLF merges arm with holding co of DLF Assets
DLF Ltd., the country’s largest property developer, is indirectly acquiring DLF Assets Ltd. (DAL), a promoter owned entity. Now the deal opens the possibility of DAL going ahead with a real estate investment trust (REIT) listing in Singapore that has been pending for over two years now. The fund raised there would be used to retire debt of DAL. As per the deal, the commercial rental business of DLF - DLF Cyber City Developers Ltd. - is being merged with Caraf Builders & Constructions Pvt. Ltd., the promoters’ holding company of DAL. DLF will own around 60% of the merged entity that would in turn own the assets of DAL. The proposed transaction will bring all commercial assets of DLF under one company giving the parent listed firm a revenue stream of around Rs25bn annually and help it hedge against the uncertainties of the property market. Caraf has four rent yielding properties with leased area of over 3 million sq ft besides 96% economic interest in DAL which, in turn, has four SEZ properties with leased area of over 6 million sq ft. DLF Cyber City has commercial buildings with leased area of close to 7 million sq ft besides two malls in Gurgaon and Delhi.
November air passenger traffic up 30% YoY up
The total domestic passengers carried by the Scheduled Airlines of India in November 2009 was 38.98 lakhs, up nearly 30% compared to the corresponding month last year. The total passengers carried by domestic airlines in the October 2009 was 39.69 lakhs. The total passengers carried by the domestic carriers in September 2009 was 35.05 lakhs. Passengers carried by domestic airlines from January to November 2009 were 399.66 lakhs as against 378.99 lakhs in the corresponding period of 2008, thereby registering a growth of 5.45%. Domestic airlines such as Jet Airways and SpiceJet, among others, clocked over 70% flight occupancy in November. Jet Airways recorded a 33% increase in its domestic passenger traffic and 19% in international traffic for November over the previous year, and flew 7.6 lakh passengers domestically and 3.2 lakh passengers on international routes. In terms of market share, the Naresh Goyal-owned airlines Jet and JetLite maintained their lead with a 27% share in November, even though it was down from 27.7% in October. Kingfisher had 21.1% share as compared to 20.7%. However SpiceJet's market share at 12.2% in November was down from the previous month.
GSM operators add 11mn new users in Nov
The GSM-based cellular service providers have reported subscriber additions of 11.08mn during November, as against addition of 10.32mn in October, the Cellular Operators Association of India (COAI) said. With this, the cumulative All India GSM subscriber base has now grown to 366.78mn in November, up from 355.25mn in October, the lobby group for GSM operators said. Among the companies, Vodafone Essar added 2.78mn new users in November, taking its total base to 88.61mn while market leader Bharti Airtel saw its total base rise by 2.8mn to 116.01mn. Idea Cellular added 2.55mn new customers, boosting its subscriber base to 55.91mn, while Aircel increased its base by 1.61mn to 29.35mn. BSNL added 1.22mn new customers, taking its reach to 55.19mn. Loop Mobile added 50,303 new subscribers, taking its total to 2.6mn. MTNL added 73,019 new customers, boosting its total base to 4.51mn. Bharti Airtel continues to be the top GSM operator in the country, with a market share of 31.63% followed by Vodafone Essar at 24.16%, BSNL at 15.05% and Idea at 15.24%.
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