Wednesday, February 14, 2007

Google invests in early stage Indian VC funds

Google has invested in Bangalore-based Seedfund and Erasmic, two early-stage venture capital funds. India is the first place where Google has made a limited partner investment in early stage funds. The company did not disclose the financial terms of the deals. Seedfund has backing from global leaders in venture capital space including Motorola Ventures, Reliance Capital and SVB Financial Group; international venture funds like Sierra Ventures and individual investors like Kanwal Rekhi, K B Chandrasekhar, B V Jagadeesh and Sridar Iyengar.

Read more in the CIOL.com article.

Deutsche Borse buys 5% stake in BSE for Rs. 189 crores

Germany's Deutsche Borse has bought a 5% stake in the Bombay Stock Exchange for Rs. 189 crores ($43 mn). The deal values the BSE at $854 mn. BSE may sell a further 21% to private equity funds. Last month the NYSE Group, private equity firms General Atlantic and Softbank Asia Infrastructure Fund and global investment bank Goldman Sachs bought a 5% stake each in the National Stock Exchange.

The BSE has been planning to sell a total stake of 26% to strategic investors and offload another 25% through an initial public offering as part of efforts to reform the country's markets. A stake in the BSE will give Deutsche Borse a foothold in one of the world's fastest growing capital markets while the BSE will gain access to the German company's technological expertise and access to western markets.

Read more in the MSNBC.com article.
Related Posts:
NYSE, Goldman Sachs, General Atlantic, SAIF to buy 26% in NSE
Deutsche Borse, Singapore Stock Exchange in race to acquire BSE interest
Singapore Stock Exchange leads race for BSE stake

France-based Thomson acquires controlling stake in Paprikaas Animation

The €5.4 bn, French digital video technologies major Thomson has acquired a controlling majority in Bangalore-based Paprikaas Animation Studios. The size of the deal has not been disclosed. The acquisition was done through Thomson’s Tehnicolour Content Services business which provides various content activities to media and entertainment sectors. With this buyout, Thomson would be looking sourcing its requirements for the global market through Paprikaas. Paprikaas employs around 150 people.

Read the article in DNA Money.

Tata Power to bid $1.6 bn for Indonesian coal mine Bumi Resources

Tata Power is preparing to bid around $1.6 bn for a 30% stake in Indonesian coal company Bumi Resources in an effort to counter-bid Japanese company Mitsubishi’s offer of $1.32 bn. Mitsubishi has made the highest bid so far.

Tata Power has been asked to submit a binding bid by February-end. Mumbai-based Tata Power major may also look at hiking the bid, if found necessary.

Bumi had put a reserve price at $1 bn. Five bidders were short listed including the Anil Ambani-owned Reliance Energy and Kepco, a power major from South Korea.

Tata Power’s bid will put the valuation of Bumi resources at $5.2 bn. Tata Power has won the 4000 MW Mundra Ultra-Mega Power Project and has been actively scouting for imported coal at cheaper rates. It would need to import around 12 mn tonnes of coal annually starting 2012 for the project.

Read The Economic Times article.
Related Post: REL, Tata Power looking at Indonesian coal company Bumi

Russia’s Rusal may counter-bid for Novelis

Hindalco’s bid for Novelis may see competition from Russian steel major Rusal. Rusal is the world’s largest aluminium and alumina producer. Hindalco will pay the shareholders of Novelis $44.93 per share, or $6 bn, to buyout the US-based company.

Hindalco’s offer has been cleared by the Novelis’ board but is yet to be approved by shareholders. Novelis was spun off Canadian aluminium major Alcan but incorporated in Atlanta in the US. Under Canadian laws, any new bidder would have to pay a break-fee and also better the existing offer. Other potential bidders, such as private equity firm Texas Pacific Group, are also considering mounting a counter-bid for Novelis. Texas Pacific Group controls US-based Aleris.

Regulations stipulate a $100 mn break-fee payable to Hindalco, if a competing bid is made and if in the event, the deal is derailed. As per terms agreed between the Hindalco and Novelis boards, about 66.66% of Novelis shareholders present and voting must tender their shares for Hindalco to go ahead with the deal.

Rusal recently created a three-way merger with Russia’s Sual group and Switzerland’s Glencore International to become the world’s largest aluminum and alumina producer. The annual production would total 4 mn tonnes of aluminum and 11 mn tonnes of alumina, accounting for about 12.5% of global aluminum and 16% of the global alumina market.

Read more in The Economic Times article.

The Reserve Bank of India hikes CRR rate by 50 bps to 6%

The Reserve Bank of India (RBI) has upped the Cash Reserve Ratio (CRR) by 50 basis points. The CRR now stands at 6%. This move by the RBI is said to drain liquidity to the tune of Rs. 14,000 crores from the system. The CRR rate hike will have it effect on banks in that many would be forced to hike interest rates. The CRR rate hike has been effected in two stages. The first hike of 25 basis points will be effective from February 17 and the second from March 3. The RBI’s move of hiking the CRR rate is aimed at checking liquidity from further compounding the inflation rate and follows a fortnight after the central bank raised its overnight lending (repo) rate to 7.5% on January 31.

Read more in the article in Business Standard.

Boutique i-bank Atherstone to raise infrastructure, real estate funds

Atherstone India Invest (AII) is raising two India-dedicated funds. These would include an infrastructure fund of $1 bn and an exclusive real estate fund of €250 mn. The funds will be partnered by European pension funds and insurance companies that are increasingly hungry for India's infrastructure and real estate sectors. AII is an asset management and business advisory firm dedicated to European and Indian cross investment businesses.

AII is a joint venture between the Mumbai-based Atherstone Group and India Invest, a firm based in Switzerland. AII is promoting commercial ties between India and Europe through India-focused funds, business consulting and merger and acquisition advisory. Atherstone Group is a two-year old global investment banking firm with an India focus. The real estate fund will be raised by March-end, followed by the infrastructure fund. The real estate fund is an open-ended fund; it will keep raising funds and deploying them in various projects.

The infrastructure fund will target a judicious mix of infrastructure service companies, technology-based vendors and project development companies. Target firms would be mid-market Indian firms having turnover up to $30 mn. Infrastructure service companies could include those engaged in toll road management, billings and collections in the power sector, demand-side energy management, logistics, and water conservation. However, AII is likely to avoid project development companies, except in sectors that offer higher returns, and where limited funds leveraged with project finance can have an impact. Similarly, technology-based vendors could include specialized vendors in railway signaling, automated tolling, electronic power meters, solar applications, energy efficiency, and pollution control.

The real estate fund will focus on townships, special economic zones (SEZs), large commercial projects and also Tier-II cities like Hyderabad and Pune. UK-based asset management group Belgravia Financial Services will help AII in risk management and asset management process.

Article in The Economic Times.

Pradip Overseas to form JV with US textile firm; hit capital markets with Rs. 200 crore-issue

Ahmedabad-based Pradip Overseas Limited, a manufacturer of household linens, is forming a JV with a US-based textile company for branding and marketing its home linen in the overseas markets. The size of the JV is around Rs. 200 crores and will be finalized by Pradip next month by signing a Memorandum of Understanding with the US company. The name of the American company has not been disclosed.

Pradip Overseas is also planning a domestic JV with at least two Mumbai-based companies. The companies would look after the branding and marketing activities of Pradip in the domestic market. The domestic JVs will also be worth Rs. 200 crores.

Pradip Overseas is planning to raise funds for its Green Field Textile Park in Ahmedabad in the debt-equity ratio of 60:40. Of the equity, 20% would be raised from the capital markets for which it plans to come out with a public issue of Rs. 200 crores in the next six months. As of December 2006, the turnover of the company was Rs. 280 crores.

Read the Business Standard article.

US-based boutique hotel brokerage Molinaro Koger plans $300 mn India-dedicated hotel fund

The Economic Times reports that Molinaro Koger, a US-based hospitality advisory and brokerage firm, is raising a $250-$300 mn fund for investing in hotel assets in India. Molinaro Koger has facilitated around $3 bn of hotel transactions and funding globally in 2006. it will launching the fund towards the end of 2007. The fund would largely target greenfield hospitality projects, especially those in the under-served markets such as religious tourist hotspots and beaches. The fund will be managed by Molinaro Koger’s Capital Markets Group. Molinaro Koger opened its India office in January this year in Mumbai and is in the process of ramping up the India team that would include hospitality advisors, analysts and brokers. Abhijit Das will be the Managing Director of Molinaro Koger India.

Lanco Infrastructure and Jindal Steel & Power buy Globeleq Singapore

Lanco Infrastructure and Jindal Steel & Power Limited (JSPL) have acquired Globeleq’s Indian assets by acquiring Globeleq Singapore. Lanco and JSPL will now implement the Rs. 16,000 crore-Ultra Mega Power Project (UMPP) in Sasan. Lanco and JSPL have purchased 60% and 40% shareholding, respectively, in the Singapore-based subsidiary of the investment arm of Department for International Development, the development agency of the British government. The consideration for the buyout has not been disclosed; Lanco management says that it is nominal.

Lanco has roped in Jindal Steel to address the concerns of the government over the successful completion of the project in the light of Globeleq’s exit from the consortium. Around two months ago, the Lanco-Globeleq consortium had emerged as the winning bidder of the Sasan project. Lanco had 30% stake, while Globeleq had 70% stake in the consortium. With the acquisition of Globeleq’s stake, Lanco will have 72% interest, direct and indirect, over the Sasan project while JSPL will have 28% stake. JSPL reserves the right to scale up its holding to 49% in the project in five years. The shareholders will chip in Rs. 3200 crores as equity contribution towards the project while the remaining Rs. 16,000 crores will be generated through debts. Lanco may also look at other assets of Globeleq which have been put up for sale.

Read the Business Standard article.
Related Posts:
Reliance Energy to bid for Globeleq's global assets
Tata Power, Kalpataru, Lanco to join Reliance Energy in bidding for Globeleq’s assets

Citigroup Property Investors to invest $120 mn in Nitesh Estates’ luxury hotels business

New York-based Citigroup Property Investors (CPI) will invest around $120 mn in Bangalore-based Nitesh Estates' luxury hotels. CPI would partner with Nitesh Estates on the latter’s forthcoming hotel properties. CPI reportedly also has committed itself to 30% in the group's recently announced $100 mn 5-star hotel property on Bangalore's Residency Road. Nitesh Estates is planning to build four more hotels in Goa, Chennai, Hyderabad and Kochi. The company is believed to have acquired land in Goa and is in the process of acquiring land in other locations. CPI has already invested close to $250 mn in India and plans to invest a further $500 mn. Of this, around 40% is expected to be invested in hotels and service apartments. Nitesh Estates had earlier received a PE funding of $100 mn from New York-based Siachen Capital for an undisclosed stake and was also known to have divested a 25% stake for $55-60 mn to New York-based hedge fund Och-Ziff Capital Management Group.

Read the Business Standard article.

Iceland-based generics pharmaco Actavis acquires Sanmar Group's API division

Iceland-headquartered generics pharma company Actavis has acquired the API (active pharmaceutical ingredient) manufacturing division of Sanmar Specialty Chemicals Limited (SSCL), a subsidiary of the Chennai-based Sanmar Group, for an undisclosed sum. The division will give Actavis a wholly-owned, FDA-approved facility as well as the ability to develop and manufacture its own APIs. Prior to the SSCL acquisition, Actavis has concluded two more acquisitions in India: Chennai-based Grandix Pharmaceuticals in December 2006 and Bangalore-based CRO (Contract Research Organisation) Lotus Laboratories in February 2005.

The SSCL division is located near Chennai and supplies APIs to international pharmaceutical companies, mostly in Europe and the US. The division currently manufactures 15 products and employs approximately 70 people. Actavis has also entered into a service agreement with SSCL to provide Actavis with API research and development services at SSCL’s research facilities. Actavis already has a wholly-owned, fully-operational API development centre set up in Bangalore. Actavis now has over 620 people employed in India, with operations in Chennai, Bangalore and Hyderabad. Actavis now has a total of 30 API projects under development in India.

Read The Economic Times and Business Standard articles.