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News Roundup: Gammon may sell 24% stake in infrastructure arm

05 March, 2013

Loss-making civil contractor Gammon India has initiated talks with investors to sell up to 24% stake in its listed subsidiary, Gammon Infrastructure Projects Ltd. The 100-year-old company, which is in the midst of a severe cash crunch, is exploring the option of divestment in its subsidiaries to raise up to INR 1,000 crore ($181.72 million). The proceeds from the planned divestment will help the company pare its debt of around INR 3,500 crore ($636 million). The company is also looking to divest stakes in holding companies of other business such as real estate and power equipment along with stake sale in some of our special purpose vehicles. (The Economic Times)

Polaris may hive off IT services business: Arun Jain-spearheaded Polaris Financial Technology is likely to hive off IT services and cloud computing units in separate deals, while retaining the software products business. Polaris, which counts Citigroup as its largest client, could consolidate the $330-million revenue IT services business with one of the latter’s top outsourcing vendors, besides selling the smaller $15-million cloud division to other suitors like Japan’s NTT. Polaris would seek at least $450 million (over INR 2,470 crore) for the IT services unit, with operating profit of around $45 million. The company which has set up a committee to recommend on a potential restructuring, has started talks with investment banks and would select two of them to run a restructuring process shortly. (The Times Of India)

GSPC-Adani venture scouts for investors to pick up 25% stake: After initial hiccups and several delays, the joint venture of GSPC and Adani Groups formed for setting up of a terminal for receipt, storage and regassification of imported liquefied natural gas (LNG) at Mundra in Gujarat is now actively looking for “strategic investors” for picking up to 25% equity and rush with the project that it seeks to complete in three years. GLL, a special purpose vehicle (SPV), was formed by GSPC Ltd in 2007 to develop an LNG terminal at Mundra. It later entered into partnership with Adani Enterprises Ltd (AEL) and Essar Group. The State Government entities and AEL hold 50 per cent and 25 per cent equity, respectively, in GLL. The balance 25 per cent was held by Essar, which subsequently exited the joint venture. GLL is now trying to find investors for this balance stake. (Business Line)

Ennore Port to mop up Rs 1000 crore through tax free bonds: Ennore port, would invite Request for qualification (RFQ) from private port companies to develop a container terminal at the port within two months. The company has already received 11 expression of interest (EOI) from private port companies for the project and is now looking to award the project by the end of the financial year. In addition, the company has also received approvals from market regulator, SEBI, to raise tax free bonds from the public and the issue opened on February 28th and will close on March 15th. The company has opened a public issue of tax-free, secured, redeemable, non-convertible bonds to raise up to INR 500 crore ($90.86 million) with an option to retain over subscription of up to INR 500 crore ($90.86 million). The bonds could be issued for 10 and 15 years period with a coupon rate of 7.01% and 7.17%, respectively. Retail investors would get an additional 0.50% coupon. The company would use the money raised through the bonds to fund its capital dredging project and in setting up its rail and road infrastructure. (The Economic Times)

Birla mulls U.S. purchase driven by shale gas: Indian billionaire Kumar Mangalam Birla is considering buying its first fertilizer plant in the U.S. to benefit from a 55% drop in prices of natural gas used to fuel the factories. Aditya Birla Group (ABNL) is seeking a “mid-size acquisition” which has access to technology that can be used in the conglomerate’s operations. Birla has spent more than $1.5 billion in acquiring assets overseas in the past two years. Since January 2011, the group bought four companies in the chemical industry, including three overseas. (Bloomberg)

Axiata eyes Airtel’s Lanka business: Axiata, the Malaysia-based telecom operator has approached Bharti Airtel to acquire the Indian operator’s business in Sri Lanka. Axiata operates as Dialog Axiata in Sri Lanka. While Bharti Airtel has an estimated share of eight to nine per cent in the Lankan market, Dialog Axiata accounts for 40% market share. In January 2009, Bharti Airtel had announced the company would invest about $200 million in Sri Lanka till 2012. Axiata is also believed to have approached Hutch to acquire the latter’s Sri Lankan operations. (Business Standard)

Sumeet Industries plans to raise funds through FPO: Sumeet Industries Ltd. is looking to raise funds through follow on public offering (FPO). The company has received the approval from its board for the proposed fundraising. The other details of the FPO such as number of equity shares offered, issue size, price band etc would be decided in consultation with the merchant banker. (BSE)

M&M to consolidate component biz, in talks with investors: Auto major Mahindra and Mahindra is in talks with strategic investors and private equity firms for consolidating its component business, valued at around $1 billion. The talks are being held parallel to M&M’s plans of bringing the auto component and engineering services companies under the umbrella company Mahindra Systech, making it end-to-end solutions providers for vehicle manufacturers. (First Post)

Oil India plans for acquisitions: Oil India Ltd. is looking for two acquisitions at the moment for which talks are at an advanced stage and may be concluded by FY13-end. In October 2012, the company made a small acquisition. The company has earmarked a INR 7,000-crore ($1.27 billion) budget for acquisition and capable of deploying more funds. (Moneycontrol.com)

Russia’s Rosneft offers OVL stake in two exploration blocks: Russia’s Rosneft has offered ONGC Videsh Ltd (OVL) a stake in Magadan-2 and Magadan-3 exploration blocks in the northern part of the Sea of Okhotsk in eastern Russia. Rosneft conveyed that after OVL evaluates the blocks on the technical merits, further details about the participation by OVL would be discussed. The blocks Magadan-2 and Magadan-3 are situated in the Okhotsk sea in the eastern part of Russia. The company had in May last year written to Rosneft expressing interest in taking a stake in oil and gas blocks in the Russia’s Arctic region which have recently been given out to US major ExxonMobil, Italian giant ENI and Norway’s Statoil for exploration. (Moneycontrol.com)

Courtesy: VCCEdge


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News Roundup: Gammon may sell 24% stake in infrastructure arm

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