August 2007
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VSNL may invest $200 mn in South Africa telecom

After losing its bid for a stake in South African government-owned telecom network operator Infraco, Tata-controlled Videsh Sanchar Nigam Ltd is planning to invest in the submarine cable projects of the state-owned entity. VSNL may invest close to $200 million for the cable project, group sources said. “Currently, it is in the very early stages of negotiations. Just now, they came out with an idea of inviting partners for the submarine projects. We are interested in partnering in that,” a top company official said. Infraco, South Africa's third network operator, which has been formed to lower the broadband costs, is planning to invest close $700 million to build an undersea cable network. The cable network will connect Africa, America and Europe. “VSNL has a stake in SA's second national operator, Neotel. Now the company is interested in equity participation in the undersea cable projects of Infraco,” sources said. […]

VCs, PEs go mum, keep deals under wraps

It’s the season of stealth for venture capital (VC) and private equity (PE) firms. A host of PEs and VCs have gone into a ‘private’ mode and are keeping new investments under wraps. Firms such as Nexus India Capital, Bessemer Venture Partners (BVP), Kotak Private Equity, Matrix Partners and Sequoia have chosen to be discreet about some of their investments. Nexus India Capital, which recently announced a $100-million fund, has officially announced only three of its six completed deals. Similarly, Bessemer Venture Partners, which recently earmarked $350 million out of its newly-raised $1 billion fund, has announced just 50% of its deals in India. Industry watchers estimate the value of such deals could be more than $500 million and will only grow with time. Interestingly, even Anil Ambani refused to share the list of his PE investors in the recent Reliance Telecom Infrastructure (RTIL) deal. Some investee companies deliberately choose to hide their investments because costs, such as real estate, go up, as people jack up prices expecting the companies to be loaded with cash. Also, some VCs and PE funds insist on keeping deals under wraps because new entrants flush with dollars approach companies and lure them with much higher valuations for the next round of funding, thus creating an awkward situation for the original fund managers. The firms want to lie low in some cases for strategic reasons too, especially when they feel it is in the best interest of the company. “We are not looking for publicity, we will announce the deals when it is best for the business of the company,” explains Nexus managing director Naren Gupta. Firms say they often leave the decision to decide when they want to go public with the news with the investee companies. […]

Tatas taking 35% stake in Mozambique project

In a move to secure raw material for its Corus facilities in UK and Europe and other global businesses, Tata Steel Ltd has entered into a Memorandum of Understanding (MoU) with Riversdale Mining Ltd, an Australian Stock Exchange listed company. Through this pact, the company will become a strategic investor in Riversdale’s Mozambique coal project by acquiring a 35 per cent stake for A$100 million (around Rs 345 crore). The Mozambique coal project includes the coal tenements of premium hard coking coal in Benga and Tete, located in the Tete province in Mozambique, which are fully owned by Riversdale through its subsidiary. The Benga and Tete tenements together cover an area of 24,960 hectares. “The Riversdale management expects that the potential mineralisation of the area will be substantially high,” it said. The two companies are likely to develop the project. Riversdale is presently conducting a scoping study which is likely to be completed in August 2007. The definitive agreements are expected to be finalised and executed by November 30, 2007. […]