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News Roundup: SEBI to Probe Satyam M&A and Buyback

12 January, 2009

SEBI to Probe Satyam M&A and Buyback – According to official sources,the acquisition of the web portal India World Communications (IWC) from Rajesh Jain for Rs 499 crore by Satyam Infoway could mark the start of the company siphoning funds overseas under the guise of acquiring companies. Satyam Infoway was merged with Satyam Computers in 2002. The purchase coincides with the eight year period for which the data has been misrepresented. The inspection report by the Serious Fraud Investigation Office and SEBI will be handed over to the enforcement directorate under the finance ministry to investigate the parking of funds overseas. SEBI will also look into how the promoters announced a buy back despite knowing that there were no reserves with the company to pay for it. (Business Standard)

CLP Eyes Distressed Projects in the Power Sector – CLP India, the Indian arm of the Hong Kong-based CLP Group, is planning to take over projects in India that may be surrendered by developers who find it tough to raise funds in the present credit crunch. CLP has also been approached by bankers to to take minority equity stakes in power projects that are facing financial constraints. CLP has recently been awarded the contract to build a 1,320MW coal-fuelled project at Jhajjar in Haryana. (LiveMint. Com)

Tata Recruits Citigroup as Advisor for JLR  – The Tata group has recruited Citigroup as its advisor, seking about $1 billion help from the British government to overcome financial crunch facing Jaguar and Land Rover. Tata is seeking a short term bridging loan that could help it with the cash-flow problems. The discussions between the officials and the advisors of Tata and the British government are expected to resume this week. Citigroup was the adviser for the Tata – Jaguar Land Rover deal as well. (The Economic Times)

BSE Plans to Increase Stakes of Overseas Strategic Partners – The Bombay Stock Exchange is planning to increase the stakes of its strategic partners from the current 5% to 15% as allowed by the market regulator, SEBI. The BSE met its overseas strategic investors, Singapore Exchange (SGX) and Duetsche Borse (DB) at Jeejebhoy Towers in Mumbai, on Saturday. Reports suggest that BSE is keen that both the bourses increase their stakes in the exchange and take keener interest in offering attractive products in the market, especially in the F&O segment. (The Financial Express)

Nayak to Step Down as The Axis Bank Chairman – P J Nayak will step down as Axis Bank’s chairman & CEO from August after a nine-and-a-half year stint with the bank. Nayak’s term is due to end in July 2009. Nayak, 60, is a former bureaucrat and was the executive trustee at the erstwhile Unit Trust of India, the promoter of Axis Bank. The move is partly necessitated by the Reserve Bank of India’s insistence to split the post of chairman and managing director. The central bank is keen on having non-executive chairmen at private banks. (Business Standard)

PFC and REC Likely to Get Govt. Nod to Raise Rs 10,000 Crore Each – The government is likely to allow public sector non-banking financial institutions for power sector, Power Finance Corporation and Rural Electrification Corporation to raise Rs 10,000 crore each through tax-free bonds to mobilise funds for power projects. The bonds would be similar to the India Infrastructure Company’s (IIFCL) proposed bond issue to fund road and port projects. The proposal for issuing power bonds has been forwarded by power minister Sushilkumar Shinde to Prime Minister Manmohan Singh. The proposal is being considered by the finance ministry on a priority basis. While the Rs 10,000-crore IIFCL issue will be launched this fiscal, the power bonds will not interfere with it. (The Economic Times)

Relainec Retail Plans Private Label Sale to Kirana Stores – Relaince Retail is exploring options for supplying its private labels in food and groceries to kirana stores and small retailers in the country. A separate entity, most likely to be named Reliance Foods, will carry out the private label business. Apart from generating business volumes, the move is expected to give high retail exposure to its products in innumerable kirana stores in the country, without having to spend much on advertising and marketing expenses. According to sources, Reliance Fresh head Gunender Kapur has been made the head of private labels business in the company. Reliance Retail is also expected to launch soaps, detergents, cosmetics and non-FMCG products under its private labels segment with a new brand name. (Business Standard)

R-ADAG to Sell Stake in Insurance Distribution Biz to UK Co – Reliance ADAG is in talks to sell a minority stake in its insurance distribution business to the UK-based insurance broking firm THB for Rs 250-300 crore. Reports suggest that Reliance ADAG is talking to four international firms including Lockton, Howden and Tyser to sell a stake in Standard Composite Insurance Brokers (SCIB), ADAG’s insurance distribution company. However, THB is the lead contender for the stake purchase.  According to sources, reliance money is planning to bring in strategic expertise from foreign partners who are specialists in the reinsurance business. (The Economic Times)

Unitech to Restructure Rs 800 Crore Loan – India’s second largest listed real estate company, Unitech, is looking at restructuring a Rs 800-crore loan from public sector banks. The company is planning debt restructuring, asset and stake sales to private equity (PE) funds to pay a debt of Rs 2,500 crore, which is due by March ’09. Unitech is in talks with public sector banks for rescheduling its loans. According to sources, Unitech is seeking to restructure a loan of over Rs 800 crore. Unitech is also banking on the sale of its assets, including hotels, office building and land parcels to raise cash. The company has reportedly sold off a few land parcels meant for institutional use. The company also recently sold one school plot for around Rs 30 crore. However, deals on its hotel in Gurgaon or office building in New Delhi are yet to be finalized. (The Economic Times)

 

 


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News Roundup: SEBI to Probe Satyam M&A and Buyback

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