The Finance Minister of India Mr. P Chidambaram has presented the Union Budget for the year 2007-08 today in the Parliament. Some of the proposals suggested for the capital markets are:
PAN to be made sole identification number for all participants in securities market with an alpha-numeric prefix or suffix to distinguish a particular kind of account
Idea of Self Regulating Organizations (SRO) to be taken forward for different market participants under regulations to be made by SEBI
Mutual funds to be permitted to launch and operate dedicated infrastructure funds
Individuals to be permitted to invest in overseas securities through Indian mutual funds
Short-selling settled by delivery, and securities lending and borrowing to facilitate delivery, by institutions to be allowed
Enabling mechanism to be put in place to permit Indian companies to unlock a part of their holdings in group companies for meeting their financing requirements by issue of exchangeable bonds
Rate of dividend distribution tax to be raised from 12.5% to 15% on dividends distributed by companies and to 25% on dividends paid by money market mutual funds and liquid mutual funds to all investors
In case of venture capital funds, pass-through status will be granted to those VCFs only in respect of investments in venture capital undertakings in biotechnology; information technology relating to hardware and software development; nanotechnology; seed research and development; research and development of new chemical entities in the pharmaceutical sector; dairy industry; poultry industry; and production of bio-fuels. In order to promote business tourism, this benefit also will be granted to those VCFs that invest in hotel-cum-convention centres of a certain description and size
Wednesday, February 28, 2007
Hershey to buy 51% stake in Godrej Beverages & Foods
Hershey, America’s largest chocolate and confectionery-maker, is acquiring majority stake in the food and beverage business of the Godrej Group. Hershey is acquiring 51% equity stake in Godrej Beverages & Foods for Rs. 238 crores or about $54 mn. Hershey would also license Godrej Beverages & Foods some of its trademark rights for a lump sum payment of about $2 mn in addition to royalty payments of 5% for domestic sales and 8% for exports.
With this investment, financial investor IL&FS will exit from the venture while the holdings of the Godrej Group and that of an individual investor A Mahendran would come down. Post-acquisition, Hershey would hold 51% equity while Godrej Industries would hold 43% stake with the remaining 6% to be held by A Mahendran, a senior executive with the Godrej Group. The deal values the equity stake of Godrej Industries, a listed arm of the Godrej Group, at Rs. 200 crores. The deal values Godrej Beverages & Foods at Rs. 466 crores. Hershey would pick up the majority stake through multiple transactions. This would include acquiring the 40% equity held by IL&FS, acquisition of the convertible preference shares held by IL&FS, Godrej Industries and Mr. Mahendran as also subscription to fresh issue of capital in the company.
Godrej Beverages & Food represents the foods and beverages business of the Mumbai-based Godrej Group. It was formed last year when Godrej Industries transferred its foods division to another group company Godrej Tea. The combined entity was renamed as Godrej Beverages & Food Limited. With a turnover of around Rs. 400 crores, the company is engaged in categories such as tea, edible oils, health drinks including soymilk, tomato puree, fruit drinks and bakery fats.
Read The Economic Times article.
With this investment, financial investor IL&FS will exit from the venture while the holdings of the Godrej Group and that of an individual investor A Mahendran would come down. Post-acquisition, Hershey would hold 51% equity while Godrej Industries would hold 43% stake with the remaining 6% to be held by A Mahendran, a senior executive with the Godrej Group. The deal values the equity stake of Godrej Industries, a listed arm of the Godrej Group, at Rs. 200 crores. The deal values Godrej Beverages & Foods at Rs. 466 crores. Hershey would pick up the majority stake through multiple transactions. This would include acquiring the 40% equity held by IL&FS, acquisition of the convertible preference shares held by IL&FS, Godrej Industries and Mr. Mahendran as also subscription to fresh issue of capital in the company.
Godrej Beverages & Food represents the foods and beverages business of the Mumbai-based Godrej Group. It was formed last year when Godrej Industries transferred its foods division to another group company Godrej Tea. The combined entity was renamed as Godrej Beverages & Food Limited. With a turnover of around Rs. 400 crores, the company is engaged in categories such as tea, edible oils, health drinks including soymilk, tomato puree, fruit drinks and bakery fats.
Read The Economic Times article.
Wadhawan Food Retail close to acquiring HLL’s Sangam Direct
Wadhawan Food Retail Private Limited (WFRPL), which operates the Spinach chain of food and grocery stores, is leading the race to acquire Hindustan Lever’s Sangam Direct business. Reliance Retail, Subhiksha and RPG Retail are reportedly the other interested parties.
Sangam Direct is a unique e-tailing format very exclusive to Unilever across the globe. It has been operational for over three years and has been very popular with households in Mumbai. The service now covers almost 80% of Mumbai.
Read the article in DNA Money.
Sangam Direct is a unique e-tailing format very exclusive to Unilever across the globe. It has been operational for over three years and has been very popular with households in Mumbai. The service now covers almost 80% of Mumbai.
Read the article in DNA Money.
Gujarat Ambuja sells 11% in Ambuja Cement to Holcim
Gujarat Ambuja Cements has sold 11% stake in Ambuja Cement India Limited (ACIL) to Holcim for Rs. 526.5 crores. Gujarat Ambuja owns 33% in ACIL. It has exercised its put option for an 11% stake in ACIL and has sold 9.53 crore shares to Holcim. GACL made a profit of Rs. 240.7 crores by selling these shares. After this sale, Gujarat Ambuja owns 22% shares in ACIL and Holcim the remaining 78%. Holderind Investments, a subsidiary of Holcim, currently holds 16.51% stake in Gujarat Ambuja, while ACIL holds 9.93% stake in the company.
Read the Business Standard article.
Read the Business Standard article.
Amalgamated Bean Coffee Trading to spin off coffee chain Cafe Coffee Day into a separate company
Amalgamated Bean Coffee Trading Company Limited (ABCTCL) is planning to spin off its coffee chain Cafe Coffee Day into a separate entity. The motive behind such a move would be to list Cafe Coffee Day in the next three years. It is expected that the coffee bar business will have a turnover of a little over Rs. 800 crores by 2010 from the current Rs. 380 crores. It had recently raised close to Rs. 160 crores through a mix of debt and equity from Sequoia Capital and International Finance Corporation.
Cafe Coffee Day has its business spanning the entire value chain of coffee consumption in India. Its different divisions include Coffee Day Fresh ‘n’ Ground (which owns 386 coffee bean and powder retail outlets), Coffee Day Xpress (which owns 500 Coffee Day kiosks), Coffee Day take-away (which owns 7000 vending machines), Coffee Day Exports and Coffee Day Perfect (FMCG packaged coffee) division.
ABCTCL in its roadmap has stated it aims to double the number of coffee bars to 800 in three years, while the coffee powder vending stores will number up to 650 from the current close to 400. The Xpress brand on the other hand will be paced up to 2500 outlets from the current 500 in three years’ time frame. Cafe Coffee Day is present in 70 cities across India, and is branching out to foreign shores by setting up cafes in Vienna, Austria and is planning to set shops in West Asia, Eastern Europe, Eurasia, Egypt and South East Asia in the coming months, besides in Pakistan and the US.
Read the Business Standard article.
Cafe Coffee Day has its business spanning the entire value chain of coffee consumption in India. Its different divisions include Coffee Day Fresh ‘n’ Ground (which owns 386 coffee bean and powder retail outlets), Coffee Day Xpress (which owns 500 Coffee Day kiosks), Coffee Day take-away (which owns 7000 vending machines), Coffee Day Exports and Coffee Day Perfect (FMCG packaged coffee) division.
ABCTCL in its roadmap has stated it aims to double the number of coffee bars to 800 in three years, while the coffee powder vending stores will number up to 650 from the current close to 400. The Xpress brand on the other hand will be paced up to 2500 outlets from the current 500 in three years’ time frame. Cafe Coffee Day is present in 70 cities across India, and is branching out to foreign shores by setting up cafes in Vienna, Austria and is planning to set shops in West Asia, Eastern Europe, Eurasia, Egypt and South East Asia in the coming months, besides in Pakistan and the US.
Read the Business Standard article.
Hong Kong-based ADM Capital to invest Rs. 80 crores in Rama Pulp and Papers
ADM Capital, a Hong Kong-based distressed debt fund will invest about Rs. 80 crores in mid-sized paper company Rama Pulp & Papers, which will use the funds for capex and for future programmes, including an acquisition (See Related Post). ADM is learnt to have been selected from players like Bank of America, Actis and DBZ.
ADM Capital joins a growing list of foreign private equity firms such as Citigroup, Standard Chartered, WL Ross, Clearwater and Eight Capital that have been cherry picking underperforming companies in India that they think have the potential to grow and churn profits in the next 4-5 years.
Formed in 1996, ADM Capital advises investment funds that make principal investments in distressed companies and special investment opportunities. ADM Capital had earlier joined Asian Development Bank to raise a $138mn fund to rehabilitate distressed companies in Asia. India’s distressed assets are estimated at $55 bn (about Rs. 253,000 crores). Distressed debt funds typically focus on companies that have either filed for bankruptcy or are likely to do so in the near future. The fund gets involved in restructuring to pull the company out from bankruptcy. Distressed debt firms often forgive the debt obligations of the company in return for equity.
Read the article in The Economic Times.
ADM Capital joins a growing list of foreign private equity firms such as Citigroup, Standard Chartered, WL Ross, Clearwater and Eight Capital that have been cherry picking underperforming companies in India that they think have the potential to grow and churn profits in the next 4-5 years.
Formed in 1996, ADM Capital advises investment funds that make principal investments in distressed companies and special investment opportunities. ADM Capital had earlier joined Asian Development Bank to raise a $138mn fund to rehabilitate distressed companies in Asia. India’s distressed assets are estimated at $55 bn (about Rs. 253,000 crores). Distressed debt funds typically focus on companies that have either filed for bankruptcy or are likely to do so in the near future. The fund gets involved in restructuring to pull the company out from bankruptcy. Distressed debt firms often forgive the debt obligations of the company in return for equity.
Read the article in The Economic Times.
Actis and the Burmans seek re-bids for Punjab Tractors
Private equity fund Actis and the Burman family, the promoters of Dabur, who together hold a controlling 43.5% in Punjab Tractors (PTL), have rejected offers for the acquisition of their stake from seven interested parties. These companies include Mahindra & Mahindra, Ashok Leyland and Sonalika Tractors and have now been asked to make binding bids by next Monday.
The re-bid was reportedly prompted due to the non-binding nature of the offers. Also, the bids were much lower than the company’s share price, which has shot up around 30% in the month after the bids were invited.
Actis holds 29.5% and the Burmans hold 14% in the Rs. 958-crore tractor company, while the rest is held by financial institutions, the public and banks. Punjab Tractors is India’s fourth-largest tractor making company, with an 8% market share.
Read Business Standard article.
Related Posts:
M&M, TAFE eye Actis’ 29% in Punjab Tractors
M&M, Escorts vie for stake in Punjab Tractors; Actis, Burmans to sell out
Ashok Leyland bids for Punjab Tractors
The re-bid was reportedly prompted due to the non-binding nature of the offers. Also, the bids were much lower than the company’s share price, which has shot up around 30% in the month after the bids were invited.
Actis holds 29.5% and the Burmans hold 14% in the Rs. 958-crore tractor company, while the rest is held by financial institutions, the public and banks. Punjab Tractors is India’s fourth-largest tractor making company, with an 8% market share.
Read Business Standard article.
Related Posts:
M&M, TAFE eye Actis’ 29% in Punjab Tractors
M&M, Escorts vie for stake in Punjab Tractors; Actis, Burmans to sell out
Ashok Leyland bids for Punjab Tractors
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