Wednesday, March 14, 2007

Peter Mukerjea's private equity-funded broadcast venture INX Media officially launched

Two new media companies INX Media Private Limited and INX News Private Limited, promoted by ex-Star CEO Peter Mukerjea and his wife Indrani, have been officially launched. The full bouquet of channels will include a Hindi entertainment channel, an English news channel, various entertainment channels in regional languages, a music channel and city-specific channels. INX Group promoter Indrani Mukerjea will be chairperson of the venture.

The Hindi general entertainment channel, the music channel and the English news channel will be launched by the last quarter of the year while the other channels will be rolled out over the next two years. Funding for the entertainment company INX Media has come in from Temasek Holdings via Dunearn Investments, New Silk Route, New Vernon, Kotak and SREI Group. The news company, INX News, will be 26% owned by the entertainment company and, in accordance with government regulations, by a single Indian entity drawn from the INX Group. Heading INX News as CEO and editorial head is Vir Sanghvi.

No single fund will own more than 25% of the entertainment channel. A portion of the equity will be kept aside as sweat equity for key employees both in the entertainment and the news companies. The two companies have already applied for necessary permissions.

Kotak Investment Bank is the exclusive adviser to the INX Group on this transaction. Amarchand & Mangaldas & Suresh A Shroff & Co. are the legal advisers to the group. The investors in INX Media which will have the entertainment and the music channels include Dunearn Investments, a wholly owned subsidiary of Temasek Holdings, NSR PE, a fund advised by New Silk Route Partners, New Vernon Private Equity, SREI, Kotak Mahindra Capital Company and Kotak Private Equity and IM Media Private Limited.

Read more in the article on indiantelevision.com.

RBI refuses Catholic Syrian Bank to let PE firm AIF Capital Development up stake above 5%

The Reserve Bank of India (RBI) has refused clearance to allow the preferential allotment of about 15% stake in Thrissur-based Catholic Syrian Bank to Asian private equity firm, AIF Capital Development. This has made a dent in (CSB) capital raising plans. The Foreign Investment Promotion Board (FIPB) has cleared the proposal but the RBI guidelines restrict any single private equity firm’s holding in a private sector bank to 5%.

Strangely, AIF Capital has 5.56% stake in Yes Bank, a new generation private sector bank. In addition to Yes Bank, AIF Capital’s portfolio in India includes Bharti Tele-Ventures and GVK Industries.

CSB had a capital adequacy of 11.24% at the end of March 31, 2006 and has been struggling to raise capital. It is imperative for CSB to raise capital to adhere to the RBI’s norms on minimum capital requirements for private sector banks, which require all private sector banks to increase their net worth to a minimum of Rs. 300 crores. CSB’s net worth in at the end of 2005-06 was around Rs. 215 crores.

Read more in the Business Standard article.
Related Post:
Catholic Syrian to sell 15% stake to AIF Capital Development; seeks RBI nod for sale

BNP Paribas buys 34.4% stake in broking firm Geojit Financial Services

BNP Paribas, the French banking giant has bought 34.35% in Geojit Financial Services for about Rs. 207 crores ($47 mn). The deal at Rs 26 per share is a combination of equity shares and warrants that could be converted into shares. The bank will also make an open offer to the shareholders of Geojit for another 20% in the company.

With its entry into the retail broking space, BNP has completed another leg of its financial services business in India. BNP already has presence in the life insurance sector through SBI Life Insurance and in the asset management business through Sundaram BNP Paribas Mutual Fund. Riding on Geojit's experience in Indian stock market, BNP is now considering entry into institutional broking business.

In October, Geojit's board had approved issuance of up to 79.6 mn shares (of Re. 1 face value) to BNP Paribas. The financial services firm has now issued 56.8 mn shares to BNP Paribas at Rs. 26 per share. It has also issued 22.8 mn warrants to the bank, which would be converted to as many shares at the same price in 18 months.

The post-deal open offer, expected in a few days, could increase BNP Paribas's stake in Geojit to over 50%. The company's name will be changed to 'Geojit BNP Paribas Financial Services' and three members nominated by the French bank will join Geojit's board. The current management will continue to be in charge of the company.

Read The Times of India article.

Consulting firm Tholons partners US-based Baird Private Equity

Business Standard reports that investment, advisory and consulting firm Tholons has partnered Baird Private Equity, a global private equity group of investment firm, Robert W Baird & Company. The partnership allows Tholons to expand its footprints in the globalization of services consulting space by helping Baird Private Equity's portfolio companies leverage the benefits of global outsourcing. The partnership will enable Baird to establish its presence in the fast-growing offshore markets. Tholons will have dedicated resources for Baird to be located at its Bangalore centre. They will work exclusively with Baird Private Equity's portfolio companies, particularly those in the business services sector, to evaluate, develop and execute appropriate strategies in India. Several of Baird’s portfolio companies including HireRight, TrueAdvantage and Cerillion have a presence in India and stand to benefit from Baird’s presence there.

Rain, Oxbow bids C$13.50 for GLC Carbon; draws Rain Commodities into bidding war

US-based Oxbow Carbon & Minerals Holdings, Inc. has bettered Rain Commodities’ offer of C$ 13.25 for the assets of Great Lakes Carbon Income Fund consisting of 73.56% ownership interest in GLC Carbon USA, Inc., the world’s biggest calcinated petroleum coke (CPC) maker.

Rain had acquired 20% ownership in the GLC Income Fund in March 2006 at an enterprise value for GLC Carbon at $656 mn. The company was looking at buying out the remaining equity and had entered into an agreement with the GLC Income Fund at a price of C$11.60 per unit. Oxbow entered the bidding on March 7 with an offer of C$13 per unit, forcing Rain to increase the bid to C$13.25. However, Oxbow seems to have bettered Rain’s revised bid with an offer of C$13.50 on Monday.

Oxbow is the world’s largest marketer of petroleum coke, a byproduct of oil refining, used in the production of electrodes for the steel and aluminum industries. Acquiring GLC Carbon will clearly give Oxbow a strangle-hold over the global market. Likewise for Rain, the acquisition means adding to its own substantial CPC capacity through wholly owned subsidiary Rain Calcining which will give it 28% market share in the West and a footprint across the Middle East, US and Argentina.

GLC Carbon has three plants in the US and one in Argentina. Rain has five days to make a revised offer. Oxbow also holds 5% equity in Rain Calcining which is set to be merged with the parent later this month. Rain stands to gain a break-up fee of C$17 mn in case GLC accepts another offer.

Read the article in DNA Money.
Related Post:
Rain Commodities enters bidding war for GLC Carbon; raises bid price

Reliance Industries likely to buy stake in Welspun Gujarat Stahl Rohren

Metal pipes manufacturer Welspun Gujarat Stahl Rohren Limited, the flagship company of the $1 bn-Welspun Group, may reportedly dilute its stake to Reliance Industries.

Reliance Industries wanted to have control in one of the steel pipe-making companies due to its larger interest in oil and gas where pipe companies have a larger role to play. The company recently has made two new natural gas discoveries in its east coast blocks in the Krishna-Godavari and Mahanadi basins. Moreover, the current global boom in oil and gas and spurt of investments in oil companies has sent pipeline demand skyrocketing across the world.

In December, ABN-AMRO picked up 0.67% stake by acquiring 900,000 equity shares of Welspun at a price of Rs. 93 each.

Meanwhile, Welspun Gujarat Stahl Rohren has earmarked an investment of Rs. 1300 crores funded through a mix of equity, overseas and domestic debt to set up a captive steel plant and plate mill. Its manufacturing facilities are located near Dahej in Gujarat.

In the global markets, Welspun Gujarat supplied pipes to oil and gas majors such as British Gas, Exxon Mobil, Shell and Saudi Aramco and in domestic front, it supplies to Gas Authority of India, Indian Oil, ONGC and Bharat Petroleum.

Read more in the DNA Money article.

GIC and IDFC Private Equity buy 31% stake in Quipo Infrastructure for Rs. 150 crores to fund growth plans

GIC Special Investments, Singapore and IDFC Private Equity have picked up around 15.5% share each, totaling 31%, in Quipo Infrastructure Equipment Limited (QIEL) for Rs. 150 crores.

Quipo has been promoted by the SREI Group, one of the largest equipment retail companies in the country. It will use the funds to part-finance a capital expenditure plan of over Rs. 3400 crores over the next two years. Following this, the paid-up equity capital of the company is estimated to be around Rs. 90 crores with a total net worth around Rs. 225 crores. SREI’s shareholding in Quipo has come down to 15.5% from 22%. Dutch FMO and SwedFund hold around 22%, while other shareholders like Ingersoll Rand and other venture capital funds hold the balance.

Apart from internal cash generation, the company plans to go in for various debt options to fund its capex plans. Around Rs. 1200 crores of debt will be raised next fiscal. A large part of the capital expenditure of almost Rs. 2000 crores will go towards building almost 6000 telecom towers across the country. Quipo, through its subsidiary has been involved in the renting of towers to leading telecom operators.

The company is expected to gross a turnover of around Rs. 200 crores in the current fiscal and the new business is likely to double revenues from next year.

Read the article in DNA Money.

Fidelity buys 5% in pharma packaging company Ess Dee Aluminium

Mutual fund house Fidelity International has picked up 5% equity in Ess Dee Aluminium, India’s largest provider of pharma packaging solutions, in an open market transaction. The fund has invested close to Rs. 40 crores in the company’s stock that pegs its enterprise value at around Rs. 800 crores. Ess Dee also has been approached by other private equity funds, including Blackstone, for investment opportunities.

The ICICI Group and famous Asian financial commentator Marc Faber already hold around 3.5% and 4% equity, respectively, in Ess Dee. Other investors include Nimesh Kampani of the JM Financial Group and Jagdish Master of Enam.

For more, read The Economic Times article.

3i in talks to invest $100 mn in Mantri Developers

UK-based private equity major 3i is in talks with Mantri Developers for investing up to $100 mn. Mantri and 3i have had several rounds of talks and the investment could be routed into a special purpose vehicle (SPV) for a specific project. Mantri Developers has already attracted private equity funding in an earlier round from Morgan Stanley Real Estate Fund for 10% stake for $68 mn, valuing the company at $650-680 mn in early 2006.

Some of the biggest PE transactions in the realty space include TPG-Axon investing $100 mn in DivyaSree Developers, Citigroup Property Investors tying up with Nitesh Estates to invest $100 mn to build the 250-room Ritz Carlton in Bangalore, UK-based Trinity Capital infusing £9.1 mn in Hyderabad-based Manjeera Construction, New York-based Och-Ziff Capital which picked up a 25% stake in Nitesh Estates for $ 51 mn and US-based Samsara Capital investing $32 mn in IDEB Projects.

So far, 3i has made seven direct investments in India, the latest being in Indiareit, the real estate fund of the Piramal Group. In the last 18 months 3i has invested over $200 mn in India, and plans to invest a further $1 bn in Asia over the next three years.

Read more in the article in The Economic Times.