Tuesday, April 10, 2007

Trent partners PE real estate firm Xander for retail expansion

Trent, a Tata group company, has tied up with global private equity investor Xander for developing real estate properties for its various retail ventures. As per the agreement, Xander will invest in the development of an institutional retail real estate portfolio in the country. Trent will have anchor tenancy rights and manage the portfolio with Xander. Currently, Xander invests in the Indian real estate market through Xander Master Fund, a real estate fund.

Xander Real Estate Partners, part of the Xander Group, recently bought a 20% stake in a joint venture between Reliance Industries and the Maker Group, to develop commercial, residential and retail real estate in Bandra-Kurla Complex in Mumbai. The 20% stake was reportedly valued at over $100 mn.

Read more in The Economic Times article.

Suzlon acquires 7.7% of REpower; raises bid to €150 per share

Indian wind power major Suzlon Energy has revised its offer price for REpower Systems of Germany to €150 per share, with an acquisition of 7.7% stake in the German firm. Suzlon has purchased 627,000 shares of REpower Systems through it two step-down, wholly-owned subsidiaries, SE Drive Technik GmbH and Suzlon Windenergie GmbH. With this acquisition, the company has revised the offer price of the voluntary public tender offer to €150 from the €126 for acquiring up to 100% share of REpower. Suzlon has teamed up with Martifer, a unit of Portugal's largest builder, Mota-Engil, to launch a bid for REpower. Martifer owns more than 25% of REpower.

Earlier in March, French nuclear power firm Areva offered €140 per share for REpower, raising its previous offer of €105 by a third, to top Suzlon's bid of €126 per share.

Read The Economic Times article.
Related Posts:
Suzlon Energy bids $1.3 bn for German company REpower
Areva ups bid price for REpower to €140 / share; Suzlon mulling counter-bidding options

Private equity investors to buy 24% in NDTV Networks

A number of private equity investors including Lehman Brothers, Goldman Sachs, Credit Suisse, etc. would acquire nearly 24% stake in NDTV Networks, a wholly-owned subsidiary of NDTV India, for $120 mn. NDTV Networks is a UK-based company and has five companies in its fold. It holds 100% in NDTV Labs, which will develop market and sell software and technology products; NDTV Imagine, which will operate a non-news Hindi mass entertainment channel; NDTV Lifestyle, which will provide content to TV channels in India and abroad; and NDTV Convergence, which would house all dotcom and mobile properties of the group. NDTV Networks also owns 50% in NDTV Media Services with Genpact for media process outsourcing.

NDTV India controls news channels, NDTV 24x7, NDTV Profit, among others. The company is also believed to have scrapped its initial public offer for the moment and may reconsider it later.

Read the Business Standard article.

Carlyle teams up with Ramesh Vangal to acquire Cambridge Solutions

Private equity giant Carlyle along with serial entrepreneur Ramesh Vangal are said to be the frontrunners in acquiring Cambridge Solutions, one of the largest listed BPO companies. Carlyle may purchase 42% of the other promoters’ stake for sale at $170 mn. The joint bid would control around 60% stake, valued at around $250 mn, in the acquired company, thus valuing the company at an EV of $400 mn. Other firms in the fray include bidders like global IT major EDS, PE firm Apollo and Indian IT company HCL.

The Cambridge acquisition will be Carlyle’s largest investment in India till date. The PE major is joining hands with Mr. Vangal, a co-founder and the largest individual shareholder in Cambridge with 18% stake, is assisting Carlyle in effecting a buyout.

Carlyle’s move to buy is seen in the context of Cambridge, which has substantial revenues locked up in the insurance processing domain that could unleash synergies given its rather large exposure to the insurance sector in the US. Almost two-thirds of Cambridge’s Rs. 1200 crore-revenue comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US.

Read more in The Economic Times article.
Related Posts:
HCL Technologies may bid for Cambridge Solutions
Scandent to sell stake in Cambridge Solutions; Apollo, Fidelity, EDS approached

IIFC to raise $500 mn through the ECB route; Standard Chartered appointed as lead arranger

India Infrastructure Finance Company Limited (IIFC) will raise $500 mn through the external commercial borrowings (ECB) route. Standard Chartered Bank will be the lead arranger to the issue. The funds are being raised for a period of 10 years. The resource will be used for financing some major infrastructure projects in the country.

During 2007-08, IIFC, a wholly-owned special purpose vehicle of the Indian government for core sector lending, intends to sanction some 46 projects, aggregating Rs. 15,000 crores and disburse nearly Rs. 3000 crores. A major chunk of this Rs. 3000 crores funding requirement will be met through overseas borrowings.

IIFC’s paid-up capital is Rs. 100 crores. It sanctions loans up to 20% of the project cost. Out of the 46 projects which are under the IIFC’s consideration, 31 are road development ventures, 12 are power projects, 2 are port-related infrastructure ventures, while 1 is an airport project. To ensure proper usage of funds, IIFC has appointed ICRA to work out a detailed business roadmap. ICRA is expected to submit the report within a month. It will also recommend an HRD strategy suited to IIFC’s needs.

Apart from some of major infrastructure projects, IIFCL is also working with the municipal corporations and urban local bodies to develop urban infrastructure projects. IIFC has tied up with IDBI, Canara Bank and IL&FS to create a Rs. 3000 crore-pooled municipal debt obligation (PMDO) facility. The fund will be channelized for urban infrastructure development.

Read more in The Economic Times article.
Related Post:
Citigroup, Blackstone, IDFC, IIFC tie-up for $5bn India Infrastructure Financing Initiative fund

BPO service providers Sutherland, Genpact plans IPO on US bourses

The Economic Times reports that following the lead of the listing of its peers EXL Service Holdings and WNS on NASDAQ and NYSE, respectively, Sutherland Global Services, a US-based third party BPO service provider, is planning a NYSE / NASDAQ listing by the last quarter of 2007 to raise around $250 mn. Private equity firms Oak Investment Partners and Standard Chartered Private Equity (through its Merlion Fund) are invested in Sutherland. Sutherland offers services including process consulting, back-office processing, account management, customer care, technology support across verticals such as technology, telecom, retail, healthcare and banking, financial services and insurance (BFSI). It has about 18,000 professionals on its global rolls, 50% of them based in India and has other global facilities in locations like Mexico, Canada, and the Philippines.

Meanwhile one of the India’s largest BPO firms Genpact is mulling a US listing through an initial public offering to raise over $600 mn for the company and its promoters. The company, previously part of the US-based industrial conglomerate General Electric, is planning to offload about 15% equity through a public float on NYSE / NASDAQ later this year. The company’s major shareholders, GE and US-based private equity firms Oak Hill Capital and General Atlantic, are likely to sell part of their holding through this IPO, valuing the company at around $4 bn. Genpact has appointed Morgan Stanley, JP Morgan and Citigroup for the offering and it may file the regulatory prospectus in the next few weeks.

Related Post:
Genpact plans largest IPO on US markets by an Indian company at $500-600 mn

Calcutta Stock Exchange facing problems in demutualization

The Calcutta Stock Exchange (CSE) seems to be facing a huge problem in its demutualization scheme. After having failed its original deadline for soliciting expressions of interest (EoIs) on March 23, it has again failed in its efforts to rope in strategic investors, as it has received insufficient response to the revised deadline of March 5. It is now further extending the date for submitting EoIs to April 30.

The CSE and its consultant-advisor PriceWaterhouseCoopers are conducting road shows within India and overseas to hard-sell the benefits of picking up a stake in CSE. PriceWaterhouseCoopers has already made presentations to leading bourses in Asia. Some of them are interested, but the main hindrance is the 5% limit in investment

As per SEBI guidelines, all exchanges have to divest 51% to financial institutions (FIs), foreign institutional investors (FIIs) and corporate bodies other than broking outfits before August 2007. The guidelines state that no individual investor, be it FIs, FIIs or corporates, can hold more than 5% in an individual capacity in any stock exchange. The collective holding of the non-brokers would be 51%, whereas brokers would hold 49%.

Currently, there is very little trading which happens on the CSE, which was once India's third largest bourse with a daily turnover in excess of Rs. 1000 crores.

Read the article in The Times of India article.
Related Post:
Morgan Stanley, Citigroup, Actis buy 6% in NSE

Citigroup in talks to buy to hedge fund Old Lane for $600 mn; fund boss Vikram Pandit may get to head Citi’s alternative investments unit

Global banking giant Citigroup is in talks to buy Old Lane, a hedge fund firm co-founded by ex-Morgan Stanley senior executive Vikram Pandit. If such a deal happens, Mr. Pandit would probably be on his way to heading the bank’s alternative investments unit, and probably, also the top job at the world’s largest bank.

The purchase price for Old Lane is estimated to be around $600 mn. Old Lane is thought to have more than $4 bn of assets under management. The alternative investments unit is the smallest of Citigroup's four main businesses. In 2006, profit at the unit fell 11% to $1.28 bn, and revenue dropped 15% to $2.9 bn. The unit at year-end oversaw $49.2 bn of assets, including $10.7 bn of Citigroup's prop money.

Vikram Pandit is a former head of Morgan Stanley's institutional securities division. Once considered a potential successor to former Morgan Stanley chief executive Philip Purcell, Pandit left the investment bank in March 2005 as part of an exodus of senior bankers and traders. He later founded Old Lane with his Morgan Stanley colleagues John Havens and Guru Ramkrishnan.

Read more in The Economic Times article.

Major financial houses in race to acquire UTI Securities stake

Major international financial powerhouses Citigroup, Macquarie Bank, Standard Chartered, Societe Generale and Kuwait-based Global Investment House are in the race to acquire 49% stake in UTI Securities. UTI Securities is currently owned by the Securities Trading Corporation of India (STCI).

STCI had bought 100% stake in UTI Securities for Rs. 265 crores in 2006 from the Specified Undertaking of UTI (SU-UTI). It is now looking to sell 49% stake to a strategic partner. As per the deal, STCI has a minimum lock-in of 51% stake in UTI Securities for three years, which will end in 2008.

The company will now divest 49% stake to a strategic partner, preferably a foreign investor, considering the expertise they would bring in. The talks were at an advanced stage and a prospective strategic partner would be short-listed soon.

Read more in the Business Standard article.

Texas Pacific among other PE firms in race to acquire Air Deccan stake

US-based private equity giant Texas Pacific Group is among three others who are in talks with low-cost carrier Air Deccan for picking up a minority stake. Air Deccan is planning to raise around $100 mn, to be utilized for expansion, by diluting 5-7% stake to private equity firms, and has mandated Edelweiss Capital (see Related Post) for the same.

Edelweiss has short-listed 3-4 players willing to invest in Air Deccan, and a deal is likely to be signed in the next 10 days. Among them, Texas Pacific has emerged as the most aggressive bidder. Texas Pacific has made investments in airlines globally. However, it had dropped its plans to invest $30 mn in Delhi-based budget carrier SpiceJet owing to differences in valuation.

Indian airliners are tapping private equity avenues for shoring up capital to strengthen their balance sheets and to meet their expansion needs. SpiceJet has raised nearly Rs. 300 crores from private equity firms, while the Chennai-based Paramount Airways has managed to get over Rs. 80 crores. Meanwhile, full-service carriers such as Kingfisher Airlines and Jet Airways are also in talks with private equity for raising funds.

Read the article in the Business Standard.
Related Post:
Texas Pacific pulls out of investing in SpiceJet

House of Pearl acquires Gurgaon-based Texport Fashions

Apparel company House of Pearl Fashions Limited has acquired textile exports firm Texport Fashions, for just above $1 mn. Texport will exclusively handle orders from departmental store chain JC Penny of the US. House of Pearls is also looking to acquire another facility in Bangladesh.

The new Gurgaon-based facility will also be used by the House of Pearl for servicing its international clients. It has recently received an order of $8-10 mn from JC Penny and the entire production at the newly acquired unit would be used to meet this demand. House of Pearl has concentrated on the woven segment till now but the acquisition of the Gurgaon facility would help it establish a stronghold in the knits segment as well and would also contribute $15 mn to the company.

With regards to the unit at Bangladesh, where House of Pearls already has a presence, the company may run the facility with a joint venture partner with the details to be worked out in a month's time.

Read The Economic Times article.

NetWeb Solutions acquires WebPercept from JV partner Percept Holdings

The Economic Times reports that media company Percept Holdings has sold its 51% stake in WebPercept, an online and digital media agency, to its joint venture partner NetWeb Solutions. The JV was established in 1999-2000. Post acquisition, WebPercept will be re-christened id8 Labs. NetWeb plans to build id8 Labs into India’s first fully integrated online and digital media agency. The company plans to merge its existing business franchises – under Intentias, its brand in SEM & Media, IMACS (brand in online research) and the NetWeb brand in application development – into id8 Labs. id8 Labs will invest $5 mn in the next 12-18 months through internal accruals, promoter funding and strategic investments to expand its franchise in India and global markets through offices in Dubai and Singapore.