Friday, February 23, 2007

SREI Venture to raise $250 mn infrastructure fund by April 2007

SREI Venture Capital is raising a $250 mn infrastructure-focused fund by April 2007. The company plans to tap the UK’s Alternative Investment Market (AIM) or the main UK market. This will be SREI’s first overseas fund-raising, with the company’s contribution at 2-5%. The new fund will focus on the entire gambit of infrastructure projects in India right from oil & gas to roads to power projects.

SREI Venture Capital is a wholly owned subsidiary of SREI Infrastructure Finance, which is into financing infrastructure equipment, infrastructure projects and renewable energy projects. SREI Infrastructure manages assets worth of around Rs. 4500 crores.

This is the second time that SREI is attempting to raise a Rs. 1000 crore-plus fund after it launched the India Global Competitive Fund (IGCF) in mid-2005; so far, the fund has raised around $80 mn (Rs. 360 crores) and is in the process of raising further funds.

International Finance Corporation (IFC), DEG, Germany (a financial institution owned by the Government of Germany), FMO, the Netherlands (financial institution owned by the Government of the Netherlands) and BIO (financial institution owned by the Government of Belgium) are among the large stakeholders in the company.

Read the Business Standard article.

L&T merges Datar Switchgears with itself

Larsen & Toubro Limited (L&T) has reportedly merged the Nashik-based Datar Switchgear with itself for an undisclosed amount. L&T has also absorbed 160 workers of Datar Switchgears in its Ahmednagar facility. The remaining legal formalities in this regard are expected to be completed within the next one or two months. The distressed Datar Switchgear, spread over four acres in Ambad in Maharashtra Industrial Development Corporation (MIDC) facility, was engaged in the manufacture of electrical and electronic products.

The company was a pioneer in the production of circuit breakers. The move is aimed at extending its presence in the low voltage electrical business. The Board of Industrial & Financial Restructuring (BIFR) has also reportedly given its clearance for the merger of Datar Switchgears with L&T. L&T has already shifted all the technology and machinery of Nashik-based Datar Switchgears to its Ahmednagar facility in Maharashtra.

Datar Switchgears, established in 1984 in Nashik, had indigenously developed the technology for the manufacture of earth leakage circuit breakers (ELCB) and minutes circuit breakers (MCB). Datar Switchgears was also involved in manufacturing switchgears, ultrasonic welding machines and of capacitor panels, for rental and outright sales. But the company had financially come into distress with the collapse of company’s cash flow and affecting payments of interest and principle to financial institutions, banks and other financiers, and also a loss of substantial business opportunities.

Read the Business Standard article.

Kotak AMC ties up with US-based T Rowe Price

Kotak Asset Management Company has tied up with the US-based T Rowe Price to launch a fund that will invest in the Luxembourg-domiciled T Rowe Price Funds Sicav-Global Emerging Markets Equity Fund.

Baltimore-based T Rowe Price is one of the world’s leading independent investment management firms. The fund is expected to be launched in the next couple of months. The tie-up with T Rowe encompasses only product initiatives.

The size of the fund can be up to $150 mn. The fund will aim to outperform the MSCI Emerging Markets Index over the medium-to-long-term by investing in T Rowe Price fund. The fund invests primarily in a widely-diversified, global portfolio of transferable equity and equity-related securities of companies established or conducting a significant proportion of their business activities in the emerging countries of Latin America, Asia, Europe, Africa and the Middle-East.

Read the article in Business Standard.

Firstsource Solutions, 24/7 Customer to merge

India’s fifth-largest BPO Firstsource Solutions (formerly ICICI OneSource) and 24/7 Customer, the tenth-largest, are planning to merge themselves in a move which would usher in a whole new era of consolidation in the Indian BPO / ITeS industry.

It is reported that Sequoia Capital is behind this action, which has substantial stakes in both companies. An array of strategic investments has been made in Firstsource by Sequoia, Temasek, Metavante and ICICI. In June 2003, Sequoia had led the $22 mn funding in 24/7 Customer. Firstsource employs over 10,717 people; 24/7 has 5500 people on its rolls.

Read the article in DNA Money.

WPP merges Bates with David; David head Josy Paul resigns

WPP is merging its agencies Bates Enterprise and David to form Bates David Enterprise in India. The boards of directors of both the companies have approved the merger. Integration of processes and people is expected to be completed over the next two months. The offices in Delhi, Kolkata, Bangalore, Chennai and Mumbai, will offer a complete range of communication services. Bates David Enterprise will be led by Subhash Kamath as CEO and Mohammed Khan as chairman. Josy Paul, chairman and NCD, David, has put in his papers and will not be part of the new entity.

Read more in DNA Money.

Apollo Hospitals has UK-based Abbey Hospitals on its radar

Indian healthcare major Apollo Hospitals may bid for Abbey Hospitals, a UK-based hospital chain. Abbey Hospitals has been put up for sale by its parent company, the British healthcare group Covenant. It operates a chain of six hospitals. Any sale would happen at an estimated deal size of $100-150 mn. JP Morgan’s private equity arm, One Equity Capital is likely to partner Apollo Hospitals in the buyout. The fund already has investments in the Apollo Group companies.

Covenant Group is controlled by the Cognetes Fund. Cognetes acquired Covenant from Phoenix Private Equity for about $170 mn in 2005. Capio, the other identified target is also controlled by private equity funds Apax Partners and Nordic Capital. Deloitte is managing the sale process of Abbey and is expected to kick off the procedure in the next few weeks.

Read The Economic Times article.