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Business conglomerate Essar group is understood to have initiated discussions for acquiring 50% stake in a Kenyan refinery from international oil players as part of its move for a global footprint. The refinery in Mombasa, in which the government of Kenya owns a 50% stake, has an annual production capacity of about 4 million tonne. According to sources close to the development, Essar is looking to buy out the remaining 50% stake held by three global energy giants – Chevron, Royal Dutch and British Petroleum – in Kenyan Refinery and Petroleum. Essar is looking at this potential deal, the announcement for which is expected shortly, in pursuance with its worldwide expansion plans and it would further expand its presence in the African sub-continent. The group already has three exploration and production blocks in Madagascar and one additional block in Nigeria. […]
Volvo, the world's No.2 truck maker, said on Monday it planned to invest $350 million to expand in the fast-growing Indian market through a joint venture with Eicher Motors. Global truck makers are keen for a larger share of a market that is the world's fifth-biggest and is forecast to expand with improving infrastructure and new emission and safety rules. Volvo will buy 8.1 percent in Eicher Motors, India's third-biggest truck maker, giving it 50 percent in the venture, which has not yet been named and which will take on market leaders Tata Motors and Ashok Leyland. “This is doubtless a strategic position in the Indian market,” Nordea analyst Johan Trocme said. “It's not cheap, but I think investors will let that pass today, considering how exciting the investment is.” Nissan Motor Co has firmed up ventures with Ashok Leyland for light trucks, engines and transmissions. Daimler, which recently began assembling some Actros trucks locally, is scheduled to announce a venture partner shortly. Volvo will add its Indian truck sales business, valued at $75 million, and $275 million in cash to the venture. […]
Indiabulls Wholesale Services, the retail arm of Indiabulls Real Estate, has acquired Piramyd Retail, a company owned by the Ashok Piramal Group which runs 35 neighbourhood retail stores and seven lifestyle stores. Indiabulls Wholesale has acquired 63.92 per cent stake in Piramyd Retail at an enterprise value of around Rs 208 crore, said sources close to the deal. It will be making an open offer over the weekend to acquire an additional 20 per cent of the fully diluted paid-up capital of Piramyd Retail, at Rs 74.73 per share. Thus, it would shell out Rs 174.55 crore for 84 per cent stake in the company. Piramyd runs a lifestyle retail (Piramyd Megastore) and convenience store chain (Trumart) with 42 stores spread over 10 lakh square foot of retail space in states like Maharashtra, Gujarat, Rajasthan, Delhi, Punjab and Madhya Pradesh. […]
The spill-over effect of Vodafone’s battle with Indian tax authorities may prove costly for several other deal makers. The Central Board of Direct Taxes (CBDT) has reopened about 400 cases of big and mid-sized transactions that took place during the past six to seven years. According to sources close to the development, the cases include foreign corporates and PE firms selling stakes of companies based in India, and not paying any capital gains tax. One of the first such cases that the tax department is currently probing is Montreal-based Alcan Inc’s selling of the controlling stake in Indian Aluminium Company (Indal) to Hindalco Industries seven years ago, sources in the finance ministry told SundayET. Significantly, there were around 300 PE deals clocked in India in 2006 alone. The tax department had earlier slapped a notice on Vodafone Essar, demanding $2 billion as capital gains tax over its $1-billion acquisition of a majority stake in Hutchison Essar, India’s fourth largest mobile telephone company. The case is now locked in the Bombay High Court. […]
Integrated townships seem to be the preferred investment option for private equity (PE) players in India. In fact, a Cushman and Wakefield (C&W) report finds that 28% of PE investors favour investment through this route in the real estate market. According to the real estate global consultancy, till date, foreign funds and institutions have raised approximately $30 billion to be invested in Indian real estate with an estimate of $3 billion that has been committed. Integrated townships — as a low risk investment avenue due to their diversification benefits and low entry cost — are a highly attractive option. Agrees Sandeep Singh, national head, capital markets, C&W, “In today’s high land price scenario, integrated townships offer higher value creation opportunities due to low entry costs for land and synergies created by mixed-use development within them. Says Kunal Banerji, president, marketing, Ansal API, “Yes, it is true that private equity players are showing a lot of interest in this model. The returns on investment are good and the demand for integrated townships is ever increasing. An investor needs to look at both the micro and macro aspects and this model incorporates both.” […]
IT major Infosys is learnt to be eyeing UK-based Aviva’s offshoring centres in Bangalore and Colombo as well as its two Pune facilities that are currently operated by WNS and EXL under the build-operate-transfer (BOT) model. The deal is expected to be in the range of $75-80 million. The Colombo and Bangalore units are now run by Aviva Global Services (AGS)—Aviva’s global BPO and IT offshoring arm. The two Pune facilities were to be transferred to AGS in January 2008. But Aviva, UK’s largest insurance provider, recently deferred its decision to repossess the centres by a quarter to April 2008. “We can confirm that we have decided to defer the transfer of Pune by three months and we are taking the opportunity to thoroughly review the options available to us around our offshoring capabilities. Aviva continues to remain fully committed to maintaining its offshore operations and is proud of what has been achieved. Aviva Global Services will continue to play a key role in supporting the UK businesses,” said an Aviva spokesperson. […]
The Tayals, the promoters of Bank of Rajasthan (BoR), are likely to bring down their stake in the 64-year-old private bank to around 25% from the current 43.9%. The bank is likely to go in for a series of preferential allotments to Indian and overseas investors. Private sector bank promoters have been under pressure to bring down their stakeholding in the bank to 10%. The board of BoR on Friday issued 2.35 lakh shares and warrants to investors, including BNP Paribas and Avenue Capital Group. They include 65 lakh shares at Rs 200 per share to Glasia Mauritius II (Avenue Capital Group), 70 lakh shares to BNP Paribas at Rs 200 per share, 35 lakh warrants to Naman Developers at Rs 202 per warrant and 65 lakh warrants to Darashaw & Company for Rs 202 per warrant. The bank would garner Rs 471 crore through the fresh issue of shares. The bank had earlier issued one crore shares at a price of Rs 166.75 per share on a preferential basis to Indus Capital Partners LLC New York and Max India. In recent months, the RBI has been pressurising private banks to bring down their promoter holding. Promoters of Dhanalakshmi Bank — another old private sector bank — have also bought down their holding from 37% in June-end to less than 10% by September. […]
3i India Infrastructure Fund, part of the London-based private equity and venture capital company 3i Group Plc, has invested $101 million (Rs 398 crore) in Hyderabad-based infrastructure company Soma Enterprise. Though the companies have not disclosed the exact stake the fund picked up, Avinash Bhosale, joint managing director, Soma Enterprise said, “3i has got minority stake; the stake figure is in mid-teens (between 13% and 17%).” This figure values the company at over Rs 3,400 crore. Soma will use the money for expansion. “We will invest the money to further build capacities to undertake bigger projects. This includes buying infrastructure machineries,” Bhosale. Hyderabad-based Rajendra Prasad Maganti and his family owns majority stake in the infrastructure firm. Pune-based flamboyant real estate developer and hotelier Avinash Bhosale is the other promoter. […]
PTC India Financial services, subsidiary of PTC India, will immediately get Goldman Sachs Strategic Investments and Macquarie Securities Asia on board as `strategic financial partners`, reports Business Standard. The companies will pick up 20% each in PTC Financial Services, a non-banking finance company (NBFC). The total investments will be Rs 500-600 million, including a premium of Rs 3-5 on a face value of Rs 10 a share. `FIPB has already given its approval for this investment. We are now finalizing the shareholder's agreement,` said a senior PTC executive. PTC India will continue to hold the remaining 60% stake in the NBFC. […]
Hindustan Unilever Ltd (HUL) is selling its Modern Foods unit to Middle East-based Switz Group for about 1 bln rupees, local business daily The Economic Times said quoting sources close to the deal. The Middle East-based Switz Group is owned by Mumbais Khorakiwala family, which also owns Indian pharmaceutical firm Wockhardt Ltd, retail chain Akbarallys and bakery chain Monginis. The report cited unnamed sources as saying that HUL will not sell the plant, real estate and manufacturing facilities of Modern Foods as part of the deal. […]
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