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News Roundup: UltraTech back in talks to buy Jaiprakash Associates’ cement units in Gujarat

27 August, 2013

After months of negotiations, Manoj Gaur’s Jaiprakash Associates is close to selling its Gujarat-based cement units to Birla’s UltraTech Cement at a far lower valuation than what it sought when it started the talks early this year. According to insiders, the cement units are to be sold at a valuation of $130 a tonne, compared to $160 a tonne it was seeking earlier. Jaiprakash, which is sitting on a mountain of debt, was expected to get around Rs 4,500 crore from the sale of its cement units, but now it will get a tad below Rs 4,000 crore, said a banker. The only consolation for Jaypee is that since early this year, the Indian currency has lost close to 20 per cent of its value against the dollar which will add to its kitty. The Gujarat units have a capacity of 4.8 million tonnes annually (mtpa) and will help Ultratech increase its presence in western India. (Business Standard)

Haldia Petro stake sale set to be delayed: Haldia Petrochemicals Ltd (HPL)’s stake sale is set to be delayed, as bidders have raised concern at the share-purchase agreement prepared by the West Bengal government and its transaction adviser, Deloitte India. A meeting is slated to happen this week between the state government and the five bidders to sort the issues. This would delay the submission of price bids beyond Saturday and further put off the state government’s selection of the final bidder, scheduled for now September 30. The West Bengal government, which holds about 40 per cent stake in HPL via West Bengal Industrial Development Corp, has put up its stake for sale. At present, Mukesh Ambani-led Reliance Industries, Cairn India and state-run Indian Oil Corp, GAIL India and Oil and Natural Gas Corp are in the hunt for the stake in eastern India’s biggest petrochemical company. (Business Standard)

Jet Airways considers merging its two fleets: Jet Airways (India) Ltd might merge the Jet Konnect (JetLite) fleet with its own under a single operating permit to improve efficiency. This is one of the options under consideration as part of restructuring Jet Konnect, the airline’s no-frills brand. Jet Airways acquired Air Sahara in 2007 and rechristened it as JetLite. The brand name, JetLite, was dropped last year while keeping two service models intact — a full service model and a no-frills model (Jet Konnect). The airline uses a mix of aircraft from both Jet Airways and JetLite fleets for its no-frills service. JetLite is run as a separate subsidiary and has a separate operating permit. JetLite’s schedule is filed separately with the Directorate General of Civil Aviation and its 15 Boeing 737s are not used for Jet Airways operations. The airline is exploring the idea of transferring aircraft from one fleet to another with a view to improve efficiency, a source said. Currently, Jet Airways uses 54 Boeing 737s and 18 ATR turbo prop planes for its domestic operations. No decision has been taken yet. Other plans under consideration include dropping no-frills Konnect brand altogether and using the entire JetLite fleet for the full service model. This would mean passengers will get free meals and better mileage points for their trips. It is said the change is being driven following Etihad’s decision to acquire 24 percent equity in Jet Airways and Jet’s offering is being aligned with Etihad service. Another plan is to continue with both full service and no-frills service models. The airline is also toying with the idea of increasing the number of business class seats (at present eight each) in JetLite-registered planes, while retaining both the service models. (Business Standard)

Saudi Aramco plans to enter Indian oil sector, eyes 30% stake in OPaL Project: The world’s biggest oil producer, Saudi Aramco, plans to acquire up to 30% stake with a key management role in a giant petrochemicals project in Gujarat, and is negotiating with ONGC Petro additions Ltd (OPaL) for the stake that can pave the way for the behemoth’s entry into the Indian oil and gas sector. The proposed deal, currently at an advanced stage, will be mutually fruitful as Middle-East oil suppliers are looking for closer links in large Asian markets, with the American continents likely to depend less on crude oil imports as domestic shale production and deep-sea oil and gas output pick up. However, Saudi Aramco has in principal agreed to pay significant premium to become the partner in the JV that was started in 2006,” he said. The proceeds will be used to fund the completion of the project. “The proposed transaction will be completed through fresh issue of shares by OPaL and resources mobilised through this route will be used to complete the project, which is expected to be commissioned in the second half of 2014,” said another person. ONGC and OpaL did not respond to ET’s queries while Aramco said it would not comment on “speculation”. However, executives in the domestic and international oil industry said talks were on but the deal was yet to be concluded. (The Economic Times)

CX Partners in talks to buy Future’s 28.3% stake in Biba for Rs 300 crore ($46.48 million): Private equity fund CX Partners is in the final stage of negotiations to purchase Future Ventures’ 28.3% stake in women’s apparel maker Biba Apparels Pvt Ltd for Rs 300 crore ($46.48 million), three persons with knowledge of the development said. “Future Ventures was in talks with half a dozen PE investors and has now moved into exclusive talks with CX Partners,” an investment banker, who did not wish to be named, said, adding the deal could be worth Rs 300 crore. A spokesperson for the Future Group declined comment. Biba’s managing director, Siddharth Bindra, and CX Partners’ founder and managing director, Ajay Rehlan, did not respond to telephone calls and emailed queries sent by ET seeking information on the talks. (The Economic Times)

HUDCO plans to raise up to Rs 12.50 bn via tax free bonds: HUDCO plans to raise up to Rs 12.50 billion ($195.28 million) via private placement of tax free bonds, an indicative termsheet seen by Reuters showed. The firm will issue 10 year bonds at 8.11 per cent, 15-year bonds at 8.56 per cent and 20 year bonds at 8.47 per cent, the document showed. The issue is rated AA+ by CARE and India Ratings and the base size of the bond sale is Rs 1 billion, it showed. The proceeds from the bonds sale will be utilised towards lending purposes, working capital requirements, augmenting the resource base, as per the termsheet. Book opening and closing for the issue is scheduled on Tuesday. ()

Kotak Group may buy stake in MCX: Stock locked in upper circuit, FT up over 10%: Shares of Multi Commodity Exchange are on a roll on reports that the Kotak Group, which has interests in the commodity business, is keen to acquire MCX, the listed commodity futures bourse promoted by Jignesh Shah-led Financial Technologies, if regulatory authorities and investigation force Shah to put its holding on the block. According to market sources, National Stock Exchange (NSE) — Jignesh Shah’s arch rival and India’s largest stock exchange — has sold off almost its entire stake in MCX over the past three weeks to insulate itself from the current controversy. In a separate development, commodity regulator Forward Markets Commission ( FMC) has decided to hold a meeting on Tuesday with some institutional shareholders of MCX to discuss, among other things, the future of the exchange. And amid all this, a leading financial services group and another smaller exchange along with some private equity investors are eyeing FT’s 26 per cent stake in MCX. (The Economic Times)

ONGC may raise overseas debt for $2.64 Billion purchase: ONGC (ONGC) Videsh Ltd., a unit of India’s biggest energy explorer, would probably raise debt overseas to fund its entire $2.64 billion purchase of a 10% stake in a Mozambique gas field from Anadarko Petroleum Corp.  ONGC is to get access to oil and natural gas reserves around the world with $6.14 billion of deals this year. The acquisition, subject to approvals in Mozambique and India, would add to Oil & Natural Gas Corp.’s interest in Rovuma Area 1, after it joined with Oil India Ltd. (OINL) in June to buy a 10% stake for $2.5 billion from Videocon Industries Ltd. (VCLF) State-run Bharat Petroleum Corp. owns 10% stake in the field, taking Indian ownership to 30%. (Bloomberg)

NHPC to issue Rs 1,000 crore worth tax free bonds this fiscal: State-run NHPC, which has ambitious diversification plans, will come out with its first tax-free bonds issue worth Rs 1,000 crore ($155 million) this financial year. The company plans to hit the market with tax-free bonds in October. Recently, the firm received approval from the Finance Ministry to raise funds through bonds. In the current fiscal, the company’s construction budget is Rs 3,450 crore out of which Rs 1,831 crore has been planned under debt funding. (The Economic Times)

RMZ, Tishman Speyer and Oberoi Realty bid for Goldman’s Bangalore project: Private equity major Goldman Sachs has received bids from a number of India’s top real estate companies including the RMZ Group, Tishman Speyer and Oberoi Realty for its mixed-use City View luxury project in Bangalore. The bids are in the range of Rs 450 crore to Rs 550 crore, according to people involved in the discussions. The winner is expected to be announced in the next two weeks. Separately, a European fund house is also said to be in the running. Bangalore-based Century Real Estate Holdings owns the remaining stake in City View, which is still under construction. London-based Westcourt Real Estate is the project developer. (The Economic Times)

Courtesy: VCCEdge


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News Roundup: UltraTech back in talks to buy Jaiprakash Associates’ cement units in Gujarat

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