Monday, March 12, 2007

British media mogul Roger Parry to launch India-dedicated media fund

Roger Parry, the media executive who tried to mount a bid for British television broadcaster ITV last year, is planning to launch a fund to invest in India’s media and entertainment sectors. The fund, to be called the India Media Fund, is expected to announce plans for a $150 mn-$200 mn fundraising on the London Stock Exchange AIM in this week, having already identified 14 possible investments ranging from television channels to newspapers.

Mr. Parry, the chairman of Johnston Press and Future, the magazine group, will chair the company, whose investments will be managed by two founders, Andrew Carnegie and Ronnie Screwvala. India Media Fund is advised by investment bank Dresdner Kleinwort. Mr. Carnegie, a former SG Warburg investment banker, is a veteran of Rupert Murdoch’s News Corporation. Mr. Screwvala is the chairman of UTV, the Mumbai-based film and TV production company. Both executives will sit on the boards of each company in which the fund invests.

Read the blog entry on FT Alpahville.com.

M&M makes open offer of Rs. 490 crores to public shareholders to acquire Punjab Tractors

Mahindra & Mahindra Limited made a Rs. 490 crores ($110 mn) open offer for a further 20% in Punjab Tractors Limited and its subsidiaries, as required by law after it won the bidding for a 43.3% stake last week.

Mahindra, India's top tractor and utility vehicle maker, and subsidiary Mahindra Holdings & Finance Limited are buying stakes held by private equity firm Actis and the Burman family in a deal that values Punjab at nearly Rs. 2200 crores.

In a newspaper advertisement, Mahindra made an offer to buy up to 12.15 mn shares from shareholders of Punjab Tractors, which makes tractors and farm equipment at Rs. 360 a share, the same price that it agreed to pay for the 43.3% stake. Separately, Mahindra made an offer to buy almost 480,000 shares, or 20%, in Swaraj Automotives Limited, in which Punjab Tractors owns 24.2%, at Rs. 244 per share. Mahindra also made an open offer to buy 20%, or 2.48 mn shares in Swaraj Engines Limited, in which Punjab Tractors owns 33.2%, at Rs. 151 a share.

The financing of the three offers would be through internal accruals and/or corporate borrowings. The offers open on May 3 and close on May 22.

Read the article in The Economic Times.
Related Post:
M&M wins Punjab Tractors bid; to pay Rs. 951 crores for 43.5% stake

IDFC invests Rs. 45 crores in logistics company DARCL

Logistics company Delhi Assam Roadways Corporation Limited (DARCL) has raised Rs. 45 crores through stake sale to private equity firm IDFC Private Equity for part funding its expansion plans, which include starting container train operations.

The company has entered into an agreement with the Indian railways to operate container trains throughout the country and expects the new business to push it overall revenues to the Rs. 1000 crore-mark by 2008-09. The company would invest Rs. 50 crores in acquiring three rakes and 600 containers and the container freight business expected to be operational by September 2007.

The company expects the container train business to contribute Rs. 300 crores to its overall revenues in the next two years. The company operates over 5000 trucks through out the country and caters to a host of corporate and public sector companies.

Read more in The Economic Times article.

Future Capital invests Rs. 20 crores in Biba Apparels

Future Capital, the financial arm of the Future Group, has picked up a minority stake in Mumbai-based Biba Apparels Private Limited for Rs. 20 crores, reportedly in the range of 7-15%. The investment is learnt to be in the form of convertible debentures. Biba Apparels retails ethnic women’s wear at multi-brand outlets like Shoppers’ Stop and Lifestyle and at 42 Biba exclusive outlets in Mumbai, Delhi, Hyderabad and Bangalore. Biba’s projected revenues for the current fiscal are about Rs. 60 crores. It plans to expand in the national capital region (NCR), Chandigarh, Ahmedabad, Surat and Kolkata.

Biba has tied up with the Dubai-based retailer Lulu for its overseas foray. The apparel retailer plans to open 20 Biba outlets in Dubai in the next three months, for which it is in the process of identifying locations and getting its label registered. It is also learnt to be in talks with Reliance Retail for supplying a value apparel brand, priced lower than Biba.

Future Capital manages the private equity fund, Indivision Capital, and real estate funds Kshitij and Horizon. Apart from the investment in Biba Apparels, Future Capital also has some small real estate investments. Indivision had recently invested Rs. 50 crores in health and wellness chain VLCC and earlier picked up a 26% stake in construction firm BE Billimoria.

Read the article in The Economic Times.

Thomas Weisel plans $200 mn private equity fund-of-funds for India

US-based investment bank Thomas Weisel International is planning a $200 mn, India-dedicated private equity fund of funds. The company is also keen on rolling out its asset management business in India, focusing only on institutional investors. The fund of funds, which is yet to close, has already made two investments worth $25 mn in infrastructure financing company IDFC and private equity firm ilabs.

The fund has invested $15 mn in IDFC’s $400 mn fund and another $10 mn in ilabs. The company’s India office was set up in October 2005 and is its first international office outside USA. Thomas Weisel focuses on mid-cap companies in growth sectors including technology, healthcare and alternative sources of energy. In India, these are the sectors where it will continue to focus on, besides infrastructure. The company is also keen on starting its asset management business in India. This would be a 100% subsidiary of the company.

Currently, the company offers institutional brokerage to its clients. While its PE business is operational, the company’s mutual fund business is expected to be rolled out by year-end. Internationally, the firm offers investment banking, institutional brokerage and equity research. Its subsidiary, Thomas Weisel Asset Management, includes three private equity investments funds and a distribution management service for private equity and venture capital funds.

Read The Economic Times article.

Indian Oil to buy French company Maurel & Prom’s assets in Congo for $1.5 bn

Indian Oil Corporation is likely to acquire French company Maurel & Prom's stake in oilfields in Congo for about $1.5 bn.

Maurel & Prom had announced sale of its interest in the producing fields of M'Boundi and Kouakouala and other exploration areas in Congo to Eni of Italy for $1.434 bn. Maurel & Prom had announced sale of its 48.6% interest in the M'Boundi oil field and 66 % in the Kouakouala A oilfield to Eni. Besides, it was selling 50% in Kouakouala B, C, D exploration blocks and 50% Kouilou exploration permit. But the transaction was subject to waiver of pre-emption right by partner Burren Energy of UK. The British firm has time till the end of March to exercise its pre-emption right. Indian Oil and its partner Oil India Limited are in advanced stage of discussions with Burren Energy for possible takeover of Maurel & Prom's interest in Congo.

Burren Energy wants operatorship of the fields in Congo. By exercising its pre-emption right, it will first acquire Maurel & Prom's interest in the fields and through a back-to-back agreement sell most of it to Indian Oil-Oil India combine. Burren Energy has 31.5% interest in M'Boundi field and 25% interest in Kouakouala. If the acquisition goes through, IOC-OIL will get 17,000 barrels of oil per day from M'Boundi field in 2007. This will increase to 28,000 barrels per day in 2010.

Read The Economic Times article.

SEBI to amend Clause 49 rules to tighten listing requirements

The Securities and Exchange Board of India (SEBI) has proposed to initiate a series of changes in Clause 49 rules, which relate to corporate governance, so as to tighten the listing norms for companies.

As per the proposed changes, the government nominees in public sector companies would not be treated as independent directors as they have “material pecuniary relationship with the government”.

The market regulator also has made it mandatory for companies to disclose relationship between independent directors, as well as other directors. SEBI has stipulated that companies would disclose the relation between independent directors inter-se, as well as the other directors of the company not holding management position, in all documents where the details of the board of directors are incorporated. SEBI also has proposed deletion of the provision allowing nominee directors appointed by the institutions to be considered as independent directors. The proposals came after SEBI received complaints that some companies were appointing independent directors related to other directors on the board. SEBI also proposed to fix the minimum age of 21 for independent directors.

The proposed norms have been made public for feedback.

Read the Business Standard article.

Italian coffee company Lavazza buys Barista Coffee Company and Fresh & Honest Café for $125 mn

Lavazza, Italy’s largest coffee company with a turnover of $1.2 bn has acquired coffee chain Barista Coffee Company and coffee vending business Fresh & Honest for an estimated combined valuation of around $125 mn. The two coffee businesses belonged to the Chennai-based Sterling Infotech Group, controlled by NRI takeover tycoon C Sivasankaran. Lazard was the financial advisor to Lavazza on the deal.

C Sivasankaran had bought 65% in Barista from Turner Morrison three years ago, and later purchased the remaining 35% stake from the Tata Group. His Sterling Group was learnt to have paid around Rs. 65 crores for the acquisition of 100% in Barista. Sivasankaran had put the coffee chain on the block in August last year and had appointed Standard Chartered to look for a buyer.

Lavazza earns two-thirds of its annual turnover from packet sales of roast-and-ground coffee powder and the balance from out-of-home cafe and vending business. The company sells packet coffee under the Lavazza brand name through 24,000 outlets in 80 countries. It imports 12% of its total coffee beans from India.

Read the articles in Business Standard and The Economic Times.
Related Link: Lavazza to pump in Rs. 600 crores in Barista

HAL forms aerospace joint venture with US-based VC firm Edgewood Ventures

Government-owned defence aerospace manufacturing company Hindustan Aeronautics Limited (HAL) has formed a 26:74 JV with US-based venture capital firm Edgewood Ventures. Edgewood Ventures has obtained permission from FIPB for the same. Edgewood Ventures would invest in JV through its Indian arm, Edgewood Technologies.

The JV will design and develop high-tech products in the fields of electronics, software, hardware and aeronautical systems required for aviation, aerospace and satellite projects. It will set up a manufacturing facility of multi-chip module vertical integration and system-in-package to create products for customers in the defence and space segments. The joint venture company will invest Rs. 1.56 crores in the various activities in India. The JV will design, develop, manufacture and promote high-tech projects and products to promote research and development in various fields ranging from electronics and aviation to space. The company will also set up a centre for design and development of chip data encryption and digital design. It will further develop secured communication between aircraft and ground, and radar systems design and development. The modules to be executed by the JV, known as 3D System will be licensed from France-based firm 3D Plus, under a technology collaboration arrangement.

Article in The Economic Times.

Temasek, Crown Castle in talks with Tata Teleservices for stake in towers business

Singapore-based government private equity arm Temasek Holdings and wireless tower operator Crown Castle International are in talks to buy around 15% in the mobile phone towers business of Tata Teleservices Limited. Tata Teleservices is in talks with several firms about spinning off its mobile phone towers into a separate unit, part or all of which could then be sold. The tower business of Tata Teleservices has been valued at up to $1 bn. Temasek already holds nearly 10% of the company, which has more than 5000 mobile phone towers. Tata Teleservices, along with subsidiary Tata Teleservices (Maharashtra) Limited, has more than 15.5 mn subscribers in India.

Rival firm Reliance Communications Limited is spinning off its towers business into a separate unit. American Tower Corporation as well as private equity firms including Blackstone, Carlyle and Temasek have shown interest in Reliance Communications' towers unit.

Read the article in The Economic Times.

PE fund Evolvence India to list on LSE; would raise $65 mn

Isle of Man-based Evolvence India Holdings is planning to raise $65 mn (Rs. 290 crores) through placement of shares on London Stock Exchange. Evolvence is a private equity fund company which principally targets investments in the Indian subcontinent would place up to 65 mn ordinary shares of $1 per share. The company would primarily focus on India and give weightage to co-investment opportunities. The company would passively invest 70% of the investible funds to the Evolvence India Fund (focused on PE, real estate and infrastructure development in India), 10% in the Evolvence India Life Science Fund (focused on small to mid-sized Indian biotech firms) and 20% of the funds in direct investments.

Read The Economic Times article.