March 2011
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PE investors see logic in logistics again

Private equity or PE firms are once again actively looking for investments in the logistics sector, which had experienced a drop in the pace of deal activity due to a mismatch in valuations. PE firms were previously looking at deals of at least $50 million, while smaller logistics companies were keen on deals of only up to $20 million. “A good number of PE deals in the sector concluded in the (current) financial year as well as a healthy number of deals in the pipeline are reflective of the strong PE interest in the sector,” said Manish Saigal, executive director and national industry head, transportation and logistics, KPMG India Pvt Ltd. […]

3i invests Rs 200 cr in Ind-Barath Energy

3i India Infrastructure Fund, an investment fund is investing around $45 million (around Rs 200 crore) for a minority stake in Ind-Barath Energy (Uktal), a subsidiary of Ind-Barath Power Infra (IBPIL). Utkal is building a 700 MW (two units of 350 MW each) coal fired power plant based in Orissa. This is the second deal by 3i in this month. Earlier this month the fund invested $111.51 million in KMC Infratech, which develops and operates national, state and urban highways and roads. “Utkal is well positioned to take advantage of the demand for power in India which is growing strongly. This investment allows us to partner with IBPIL which is a power generation company with an established track record of delivery,” said Anil Ahuja, Managing Director and Head of 3i Asia. […]

India govt allows 100% FDI in selected agri- sectors

India government Department of Industrial Policy and Promotion has released 'Consolidated FDI Policy– Circular 1 of 2011', that would kick in 100% FDI in development and production of seeds and planting material, floriculture, horticulture, and cultivation of vegetables & mushrooms under controlled conditions. Besides, animal husbandry (including of breeding of dogs), pisciculture, aquaculture under controlled conditions; and services related to agro and allied sectors has also been allowed 100% FDI. […]

Vodafone to buy Essar stake in telecom joint venture

UK-based telecom major Vodafone Group has exercised its option to acquire Essar’s stake in their joint venture, Vodafone Essar, which will result in a cash flow of $5 billion for the Indian firm. “Vodafone Group announces that the Essar Group has exercised its underwritten put option over 22 per cent of Vodafone Essar Ltd (VEL). Following the exercise by the Essar Group of its put option, Vodafone has exercised its call option over the remaining 11 per cent of VEL owned by the Essar Group, resulting in a total cash payment of $5 billion,” Vodafone said in a statement today. […]

Dodsal acquires 100% stake in Chennai's AE&E IDEA

UAE-based engineering, procurement and construction company Dodsal Group has acquired Chennai-based AE&E IDEA (India) Private Limited, it was announced here on Tuesday. The acquisition adds to Dodsal's growing portfolio and improves its project execution capabilities in the engineering, procurement and construction sectors. In its 27 years, AE&E IDEA (India) Pvt Ltd has established its presence in the power, oil and gas and infrastructure sectors and complements and enhances Dodsal's engineering division's own strengths in the fields of oil and gas, power, pipelines, infrastructure, exploration & mining. Rajen A Kilachand, the Chairman and President of Dodsal Group, said the acquisition is a strategic fit and further strengthens the company's existing business footprint in the energy, industrial and infrastructure sectors. […]

Essar concludes Zisco deal at $750 mn

The Essar Group, through Essar Africa Holdings Ltd (EAHL), has bought 54 per cent stake in Zimbabwe’s state-owned steelmaker, Zisco. The total deal value is $750 million, which includes $340 million of debt. Essar (Middle East & Africa) Resident Director and EAHL Director Firdhose Coovadia told Business Standard, “It’s a significantly distressed asset, operating at very low levels. We will invest $400 million in the joint venture to get it back to production; $340 million will be used to pay off the debt and money owed to employees as wages.” He said the company was looking to restart steel production at Zisco in 12-15 months from the date of getting all other necessary approvals in place. The transaction requires approvals from various Zimbabwean ministries and acceptable terms for the debt obligations of the government of Zimbabwe (GoZ) towards Zisco’s creditors. Essar said, “Upon closing, EAHL and GoZ will also finalise and settle liabilities such as unpaid wages and salaries and amounts due to various local creditors, etc.” […]

StanChart PE invests Rs 85 Cr in Privi Organics

The private equity arm of Standard Chartered Bank has invested Rs 85 crore in Privi Organics , a Mumbai-based aroma chemical manufacturer and exporter . Most of the products manufactured by Privi Organics are used by fragrance and flavours companies. The company also exports products to over 25 countries. Privi is planning an expansion of its manufacturing facilities at Mahad in Maharashtra and the fund infusion will partly be used to finance this expansion. The specialty and fine chemicals market is pegged at $860 million and most of the products in this segment are used as additives in the textile, leather, paper, cosmetics and detergent industries. The global chemical industry underwent a major downturn during the recession . […]

Kotak Mahindra Plans $300 Million Infrastructure Fund

Kotak Mahindra Group said Sumitomo Mitsui Banking Corp. will invest in a $300 million fund that will buy stakes in infrastructure projects. Kotak Mahindra plans to raise funds from domestic and overseas private-equity investors for Indian power generation, road, port and airport projects, it said in a statement to the Bombay Stock Exchange today. Toronto-based Brookfield Asset Management Inc. (BAM/A), Tokyo-based Sumitomo Mitsui and Kotak will together contribute 22.5 percent of the capital, it said. Prime Minister Manmohan Singh’s government is easing rules to lure cash from abroad as Asia’s third-biggest economy plans to double spending on public works to $1 trillion in the five years to 2017. India cut a withholding tax on funds that invest in infrastructure debt to 5 percent from 20 percent in a budget released on Feb. 28. […]

Motilal PE Advisors invests in ElectroMech

Motilal Oswal Private Equity Advisors, a wholly-owned subsidiary of Mumbai-based Motilal Oswal Financial Services, has invested Rs 45 core in a private equity of Pune-based ElectroMech, India’s largest industrial crane manufacturer and customised material handling solution provider. “We are investing in ElectroMech because its growth is based on its strong fundamentals, and it is also diversifying its customer base,” said Prakash Bagla, vice-president of Motilal Oswal Private Equity. He said the firm was focused to sustain a long-term competitive advantage and it was expected to deliver 30-40 per cent returns over the next three to five years. “We will use the money for capital expenditure and funding the growth plan of the company,” said Tushar Mehendale, managing director of ElectroMech. […]

United Phosphorus to buy 50% stake in Sipcam Isagro Brazil

United Phosphorus Limited (UPL), India's largest agrochemical company, on Monday said it will acquire a 50% stake in Sipcam Isagro Brazil for an undisclosed amount. The Indian firm will buy the stake from Isagro that currently holds 50% in Sipcam's Brazil arm. Sipcam Isagro Brazil is a joint venture between two Italian firms – Sipcam-Oxon group and Isagro. Both the companies have signed a pact under which Isagro will exit the joint venture and UPL will join with 50% stake, the Indian company said in a statement on Monday. “The deal size is being pegged around $600 million or 2,700 crore,” said a person close to the development. The deal is expected to be closed in the next one month and the acquisition will be funded largely through internal accrual, as the company has enough cash in hand, he said. As on December 31, 2010, the company had nearly 1,800 crore cash in balance. […]