Credit-default swaps (CDS) on the Mumbai-based company rose 10 basis points to a record 503 basis points at 3:48 pm in Hong Kong, according to ABN Amro Holding prices. That means it costs $503,000 annually to protect $10 million of Tata Motors’ debt from default for five years.
Tata Motors’ five-year credit-default swaps have more than doubled and its share price fallen 12 per cent since Ford announced the automaker as the preferred bidder for Jaguar and Land Rover on January 3.
Tata Motors plans to raise the 15-month loan from nine banks led by Citigroup and JPMorgan Chase & Co, three people with direct knowledge of the deal said
It will pay less than 2 percentage points more than the London interbank offered rate (Libor) as interest and fees for the loan, the people said. About $2.5 billion will fund the cost of the acquisition and the rest will be used for working capital, the people said. Tata Motors is also talking to Bank of Tokyo Mitsubishi UFJ, BNP Paribas, Calyon, ING Groep, Mizuho Financial Group, Standard Chartered and State Bank of India to arrange the loan, according to the people who declined to be identified because the information was not public.
For more read the article on Business Standard / Bloomberg dated 07.03.2008
Friday, March 7, 2008
VC gets Pass Through Status in Budget
From the Finance Minister’s Union budget speech:
“Venture capital funds are a useful source of risk capital, especially for start-up ventures in the knowledge-intensive sectors. Since such funds enjoy a pass-through status, it is necessary to limit the tax benefit to investments made in truly deserving sectors. Accordingly, I propose to grant pass-through status to venture capital funds 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, I also propose to allow this benefit to venture capital funds that invest in hotel-cum-convention centres of a certain description and size“
M&A Activity 2007
Here's a merged graphic on last years Banker Activity. It sure has been a busy year.
CLICK TO ENLARGE. For more detailed reference click Business Line
The PE Pitch : A Different Ball Game
PE investors, long known for their nimble profit seeking minds, have found yet another opportunity.
The Cricket Pitch.
Chennai Super Kings, the team owned by India Cements (ICL), has been approached by private equity investors. Admitted N Srinivasan, vice chairman and MD, India Cements: "A few private equity investors met me. They were interested in knowing if I would be willing to dilute my stake in the team's equity."
However N Srinivasan is banking on GBP 9 Bn. Manchester United valuation, with much smaller soccer audience compared to cricket, for a better deal.
According to I-Banking sources other IPL franchisee too may be willing to offload minority stake. The other names doing rounds include Deccan Chronicle (Hyderabad), Vijay Mallya (Bangalore), Ness Wadia and Preity Zinta (Mohali) and Shah Rukh Khan's Red Chillies Entertainment (Kolkata).
According to UTI Venture CEO K E C Rajakumar, Opportunistic PE Investors, Cricket win momentum, 4+ years of time to prove the concept and lower valuations in the nascent stage all point to this being a good deal now.
PE investors insist their interest in the cricket business is based on sound logic. Said one of them, "Let's get it straight. Mukesh Ambani, Vijay Mallya, GMR are businessmen who are not given to doing stupid things. Also, keep in mind that Anil Ambani and K V Kamath (of ICICI Bank) also wanted to enter this business."
Read it all on ToI
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