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News Roundup: Danone, Fonterra & Nestle vie for Hyderabad-based Creamline Dairy stake

25 November, 2013

Three of the world’s biggest dairy firms – Danone, Fonterra and Nestle are in contention to acquire a stake in Hyderabad-based Creamline Dairy Products after the promoters and private investor Godrej Agrovet initiated the sale. The divestment could value Creamline, he fourth-largest private supplier of milk in South India with a 15% market share, at about Rs 1,000 crore, said two people with direct knowledge of the negotiations. Godrej Agrovet bought a 26% stake in the 27-year-old company in December 2005 and is looking to sell it. Almost 60% of the company is held by four families and another 14% by their associates. The company has hired HDFC Bank to manage the deal. Though the promoters want to sell substantial minority stake of up to 49% they are not completely averse to the idea of selling a majority stake of 51% if the valuation is attractive, a source said. (The Economic Times) 

Nava Bharat Ventures ready with funds for Zambian project: Nava Bharat Ventures Ltd is close to achieving financial closure for its coal mine-cum-thermal power project in Zambia. The Zambian mine project is set to begin work on the 300-MW thermal power plant. According to D. Ashok, Chairman, the company’s subsidiary expects to achieve financial closure for the long-term debt finance of $560 million of the $800-million project. In a communication to shareholders and exchanges, he mentioned that they were seeking participation of leading development financial institutions such as African Development Bank and some Chinese lenders. (Business Line) 

UB Group plans to pump $2 million in loss-making US brewer Mendocino: Liquor baron Vijay Mallya-led UB Group has decided to infuse $2 million in a US-based loss making firm Mendocino Brewing Company (MBC) to revive its fortunes. UB Group has also agreed to “favourably consider additional investment to underpin growth based on detailed business plan to be submitted in due course” by Mendocino, the company said in a regulatory filing. MBC, in which United Breweries (Holdings) Ltd. (UBHL) holds 68.1% stake and another group firm United Breweries of America has 24.5% equity, has exclusive licence to brew and distribute Kingfisher Premium Lager beer in certain foreign markets. UBHL is also the holding company of all the listed entities of Mallya-led UB Group, including Kingfisher Airlines. (Live Mint) 

ONGC Videsh Ltd eyes Chevron’s gas block in Vietnam: ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is looking to buy a stake in US supermajor Chevron’s $4.3 billion Block B gas project in Vietnam. Chevron, which holds 42.38% in Blocks B and 48/95 in Malay-Tho Chu Basin of Vietnam, has called for expression of interests from international firms willing to farm-in (or buy stake), sources said. OVL is keen to take part or whole of the stake in the block which has 4 Trillion cubic feet of inplace reserves, of which 63 per cent can be recovered or produced. Others who may be interested in picking up the stake include Gazprom of Russia. It has offered OVL five offshore oil and gas exploration areas in South China Sea and its Kossor block in Uzbekistan without bidding. (The Economic Times) 

Cabinet plans to take up proposal on Indian Inclusive Innovation Fund: After a gap of about three years, the Cabinet is likely to take up a proposal to set up a Rs 5,500-crore Indian Inclusive Innovation Fund (IIIF). The fund would be under the Ministry of Micro, Small and Medium Enterprises (MSME). Officials said though the Planning Commission wanted the fund to be set up under the Department of Science and Technology, not MSME, the issue had now been resolved. The fund proposes to invest in a new generation of Indian entrepreneurs who are either building or will build world-class enterprises that focus on the problems of the poor, without compromising on economic success. It will operate as a for-profit entity, with a focus on social investment. Earlier, then finance minister Pranab Mukherjee had sanctioned initial seed capital of Rs 100 crore for the fund. Officials said 20 per cent of the total funds for IIFF would be provided by the government, while the rest would come from banks. (Business Standard) 

Citi puts former headquarters on the block: US-based banking major Citibank plans to sell Citi Centre, its erstwhile headquarters in the tony Bandra Kurla Complex (BKC) here, according to people in the know. The eight-storeyed building, with about 90,000 sq ft of space, was expected to fetch about Rs 300 crore, as BKC commanded a price of about Rs 30,000 a sq ft, said consultants. Citibank’s move to sell its marquee property follows a move by the foreign lender to buy 312,000 sq ft of space in First International Finance Centre (FIFC), a building in BKC, for a record Rs 985 crore .The bank owns six floors in FIFC. The foreign lender has shifted all its front-end businesses, including consumer banking, investment banking and corporate banking, to FIFC. Sources said Citi had appointed global property consultant CBRE to manage the transaction. (Business Standard)

Cairn India board to discuss buyback plans next week: Cairn India Ltd. is planning to consider a proposal for buyback of the company’s equity shares. The move is likely to help the Anil Agarwal-led Vedanta Group increase its stake in Cairn India. The company has convened a board meeting on Tuesday to consider a buyback of its equity shares and expect to be able to share the details of the proposal after the board meeting. Cairn Plc would sell its stake of 10.27% in the company. Recently, the UK-based Cairn Energy had valued its stake in the Indian company at $955.6 million. Cairn India has net cash of $3.3 billion. In December 2011, Vedanta had acquired controlling stake in Cairn India for $8.67 billion. Currently, it has 59% holding in Cairn India. (Business Standard) 

IndiGo likely to go public, plans to induct small planes: India’s largest and only profitable domestic airline IndiGo is likely to go public and also induct small planes in its fleet to improve regional connectivity in the country. Without disclosing the timeframe, IndiGo promoter Rahul Bhatia said both these issues were on the radar. Bhatia said here Saturday at the launch of a $25 million state-of-the-art pilot training facility IndiGo’s parent company InterGlobe has launched with CAE. (The Times of India) 

Financial Technologies likely to put its warehousing arm NBHC on the block: Financial Technologies may sell its warehousing and collateral management arm National Bulk Handling Corp (NBHC) and has appointed investment bank Avendus Capital Advisors to look for financial or strategic buyers as it seeks to raise money by disposing of assets. The owner of several exchanges, including the crisis-hit National Spot Exchange (NSEL), Financial Technologies held talks on a possible sale with Jaipur-based Staragri Warehousing and Collateral Management and two global PE funds in the recent past, but negotiations didn’t progress because neither side could agree on the price, according to people with knowledge of the plan. Financial Technologies is looking to salvage its reputation, which has been hit by an Rs 5,500-crore settlement crisis at NSEL. IDFC Private Equity invested Rs 150 crore in Staragri last year. (The Economic Times) 

Ranbaxy may sell off Biovel, exit vaccine business: Drug maker Ranbaxy Laboratories is likely to sell off Biovel, a Bangalore-based vaccine manufacturing company which it had acquired in 2010, sources said. Although Ranbaxy made the acquisition to foray into the vaccine business, it failed to roll out any product in the segment for the past two years. The company recently booked impairment losses on account of Biovel. Following the US Food and Drug Administration (US FDA) enforcement on various Indian factories of Ranbaxy, there is a financial pressure on the company’s accounts. The company’s business has suffered because of regulatory issues through past years. Besides, it also had to incur additional costs to settle those issues. (Business Standard) 

TCS, Tech Mahindra in race for IT arm of S Korea’s KT Corp: Top Indian IT companies, TCS and Tech Mahindra are expected to slug it out for a piece of KT Corporation’s IT services arm in South Korea, sources with direct knowledge said. KT Corp is said to have put on the block 45% stake in its IT arm before going for a public offer of the division. TCS and Tech Mahindra are expected to submit their bids on Nov 25. KT Corporation will hold 55% of the company post sale and then via listing bring their holding to 45%. People familiar with the development said some of the global IT firms may also be interested in bidding for the company. (The Economic Times)

Courtesy: VCCEdge

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Godrej Agrovet raises stake in Creamline Dairy to 51%

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News Roundup: Danone, Fonterra & Nestle vie for Hyderabad-based Creamline Dairy stake

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