India’s leading aluminium company Hindalco Industries may bid for the US subsidiary of Canadian aluminium major Alcan. Alcan is the world’s second largest aluminium maker.
Revenues of the undisclosed unit are estimated to be in the range of $2 bn and $3 bn.
Hindalco already has a joint venture with the Canada-based Alcan, called Utkal Alumina, to build an alumina refinery in Orissa. The proposed bid would be part of the company’s ambitious plans to become one of the top 10 aluminium producers globally over five to six years.
Hindalco recently formed a joint venture partnership with Almex USA, Inc. to make high-strength aluminium alloys used in the aerospace, sporting goods and surface transport industries. The joint venture is to be named Hindalco-Almex Aerospace. Hindalco owns 70% of the equity capital, with Almex holding the balance 30%.
Read the articles in The Economic Times and Business Standard.
Friday, January 12, 2007
Reliance Industries may bid for GE Plastics
Reliance Industries Limited (RIL) is reportedly planning a bid to acquire the plastics division of US-based industrial conglomerate General Electric (GE). This would be the largest outbound acquisition deal by an Indian company. The last acquisition made by RIL was German specialty polyester manufacturer and market leader Trevira for €80 mn (Rs. 430 crores). Early last year, Reliance Industries had made an unsuccessful $8-billion bid for British Petroleum’s Innovene.
GE Plastics had estimated revenues of $7 bn and is valued at around $10 bn. The plastics division contributes about 8% to GE’s total revenue and 5% to its net profit. However, factors such as increasing raw material costs, rising competition and a downtrend in the automobile industry, have hurt the company’s bottomline in the recent past. In the first three quarters of 2006, GE plastics’ revenue was flat at $5 bn, but operating profit dropped 13% to $560 mn. The possibility of the sale of the plastics business has been speculated for long time ever since GE chairman Jeffrey Immelt hinted that GE might pull out of some of its commodity businesses.
Reliance may not be the only one to bid for the GE unit; global petrochemicals majors such as Dow Chemicals, Rohm and Haas, PetroChina, BASF and DuPont as well as private equity funds, including Apollo Management, Blackstone Kohlberg Kravis Roberts (KKR) should also be interested in acquiring the company. US-based investment banking giant Goldman Sachs has been reportedly mandated by GE to coordinate with private equity firms and other companies interested in bidding for the company’s plastics division.
Reliance’s 3.5 mn tonne plastics business is largely commodity-led. Even though 30% of the volumes are exported, most of it is through the trading route, where margins are relatively low. It has a negligible presence in the superior engineering plastics business, which is largely used by auto components and consumer durable manufacturers. Reliance sees a good strategic fit with GE Plastics, if acquired.
Reliance is said to be exploring options for the bid; possibly a tie-up with Dow Chemicals. The US major has signed a MoU with Reliance to set up a unit in Reliance’s Jamnagar SEZ. In turn, Dow would offer a substantial stake in its struggling petrochemicals unit in the US. A formal announcement is expected anytime. Sources say the bid for GE Plastics is contingent on whether Reliance is able to expand its strategic relationship with Dow Chemicals.
Read the articles in The Economic Times – 1 2 and Business Standard.
GE Plastics had estimated revenues of $7 bn and is valued at around $10 bn. The plastics division contributes about 8% to GE’s total revenue and 5% to its net profit. However, factors such as increasing raw material costs, rising competition and a downtrend in the automobile industry, have hurt the company’s bottomline in the recent past. In the first three quarters of 2006, GE plastics’ revenue was flat at $5 bn, but operating profit dropped 13% to $560 mn. The possibility of the sale of the plastics business has been speculated for long time ever since GE chairman Jeffrey Immelt hinted that GE might pull out of some of its commodity businesses.
Reliance may not be the only one to bid for the GE unit; global petrochemicals majors such as Dow Chemicals, Rohm and Haas, PetroChina, BASF and DuPont as well as private equity funds, including Apollo Management, Blackstone Kohlberg Kravis Roberts (KKR) should also be interested in acquiring the company. US-based investment banking giant Goldman Sachs has been reportedly mandated by GE to coordinate with private equity firms and other companies interested in bidding for the company’s plastics division.
Reliance’s 3.5 mn tonne plastics business is largely commodity-led. Even though 30% of the volumes are exported, most of it is through the trading route, where margins are relatively low. It has a negligible presence in the superior engineering plastics business, which is largely used by auto components and consumer durable manufacturers. Reliance sees a good strategic fit with GE Plastics, if acquired.
Reliance is said to be exploring options for the bid; possibly a tie-up with Dow Chemicals. The US major has signed a MoU with Reliance to set up a unit in Reliance’s Jamnagar SEZ. In turn, Dow would offer a substantial stake in its struggling petrochemicals unit in the US. A formal announcement is expected anytime. Sources say the bid for GE Plastics is contingent on whether Reliance is able to expand its strategic relationship with Dow Chemicals.
Read the articles in The Economic Times – 1 2 and Business Standard.
Thursday, January 11, 2007
Cinemax India Limited IPO priced at Rs. 135 to Rs. 155
One of India’s leading theatre chains, Cinemax India Limited, is coming out with an Initial Public Offering (IPO) with an issue of 8.92 mn shares of Rs. 10 each at a price band of Rs. 135 – Rs. 155 per share. The issue comprises a fresh issue of 7 mn shares and an offer for sale of 1.92 mn shares by existing shareholders. The net issue will constitute 31.86% of the fully diluted equity share capital of Cinemax India Limited.
The capital raised from the issue will be deployed to set up several theatres in various locations across India. As a part of their expansion plans, over the next two years, they propose to set up 19 theatres at identified key locations in which a total seating capacity of approximately 15,864 seats will be created.
Enam Financial Consultants Private Limited, JM Morgan Stanley Private Limited, Edelweiss Capital Limited and Ambit Corporate Finance Private Limited are the Book Running Lead Managers to the IPO. The shares will be listed on The Bombay Stock Exchange and The National Stock Exchange of India.
Read the press release here.
The capital raised from the issue will be deployed to set up several theatres in various locations across India. As a part of their expansion plans, over the next two years, they propose to set up 19 theatres at identified key locations in which a total seating capacity of approximately 15,864 seats will be created.
Enam Financial Consultants Private Limited, JM Morgan Stanley Private Limited, Edelweiss Capital Limited and Ambit Corporate Finance Private Limited are the Book Running Lead Managers to the IPO. The shares will be listed on The Bombay Stock Exchange and The National Stock Exchange of India.
Read the press release here.
Deutsche Borse, Singapore Stock Exchange in race to acquire BSE interest
The Singapore Stock Exchange (SGX) and Deutsche Borse are two of some of the leading stock exchanges that may get to buy a stake in Bombay Stock Exchange (BSE).
The London Stock Exchange (LSE) and NASDAQ are two other exchanges that seem to be interested in acquiring a stake in BSE. At one point of time, even NYSE was considering an investment in BSE and was said to have done a due diligence. This was before the government had stipulated a 5% limit for a foreign investor in stock exchanges. NYSE has now invested $115 mn in the National Stock Exchange for a 5% stake (See Related Post).
BSE seems to be in a hurry to find a strategic partner as soon as possible as it wants to complete its IPO before May 2007. A strategic partner is expected to give BSE a higher valuation. Going by the valuation that has NSE received for its stake sale to NYSE and other three foreign entities, it seems that BSE will get anywhere between $750 mn and $1 bn.
Currently, BSE senior management and merchant bankers are busy in fulfilling formalities related to finding a partner and filing a draft prospectus. BSE will also have to increase its capital base from the present Rs. 70 lakhs and is considering a bonus to meet the minimum capital requirements.
Read the article in Business Standard.
The London Stock Exchange (LSE) and NASDAQ are two other exchanges that seem to be interested in acquiring a stake in BSE. At one point of time, even NYSE was considering an investment in BSE and was said to have done a due diligence. This was before the government had stipulated a 5% limit for a foreign investor in stock exchanges. NYSE has now invested $115 mn in the National Stock Exchange for a 5% stake (See Related Post).
BSE seems to be in a hurry to find a strategic partner as soon as possible as it wants to complete its IPO before May 2007. A strategic partner is expected to give BSE a higher valuation. Going by the valuation that has NSE received for its stake sale to NYSE and other three foreign entities, it seems that BSE will get anywhere between $750 mn and $1 bn.
Currently, BSE senior management and merchant bankers are busy in fulfilling formalities related to finding a partner and filing a draft prospectus. BSE will also have to increase its capital base from the present Rs. 70 lakhs and is considering a bonus to meet the minimum capital requirements.
Read the article in Business Standard.
Texas Pacific pulls out of investing in SpiceJet
Private equity giant Texas Pacific Group is pulling out of its $30 mn investment in low-cost airline SpiceJet. Reasons cited are as varied as differences over valuation to the US-based fund having expressed its inability to participate in this round of fund-raising by the low-cost carrier as its top management was busy with an ongoing $11 bn deal for buying out Australian airline, Qantas, by a consortium of private equity players.
In its current round of fund raising, SpiceJet has raised around Rs. 300 crores by divesting around 25% stake, giving the company a valuation of around Rs. 1200 crores. The Tata Group, through two of its investment arms, is picking up 7% stake for Rs. 75 crores. Existing shareholder, Istithmar, Dubai government’s private equity arm, is putting in another $25 mn for increasing its stake from 3% to 11%. BNP Paribas will invest $15 mn for a 4% equity stake, while Goldman Sachs is picking up 1.5% stake for around $5 mn. A clutch of small investors will hold another 4% stake between them.
The company is holding its EGM on Thursday to ratify the preferential allotments. The shares were offered at an average price of Rs. 51.36 per share. After this round of dilution, the stake of the promoters including those of the UK-based Kansagra family, director Ajay Singh and associates, will come down from around 18% to 15%.
Read more in The Economic Times article.
In its current round of fund raising, SpiceJet has raised around Rs. 300 crores by divesting around 25% stake, giving the company a valuation of around Rs. 1200 crores. The Tata Group, through two of its investment arms, is picking up 7% stake for Rs. 75 crores. Existing shareholder, Istithmar, Dubai government’s private equity arm, is putting in another $25 mn for increasing its stake from 3% to 11%. BNP Paribas will invest $15 mn for a 4% equity stake, while Goldman Sachs is picking up 1.5% stake for around $5 mn. A clutch of small investors will hold another 4% stake between them.
The company is holding its EGM on Thursday to ratify the preferential allotments. The shares were offered at an average price of Rs. 51.36 per share. After this round of dilution, the stake of the promoters including those of the UK-based Kansagra family, director Ajay Singh and associates, will come down from around 18% to 15%.
Read more in The Economic Times article.
California-based company invests in Indian design firm CG CoreEL
The Economic Times reports that California-based Xilinx, Inc., the world’s largest programmable logic services company is investing in CG CoreEL. CG CoreEL is a Noida-based design firm providing embedded systems design services.
Xilinx seems to be following the ‘corporate venturing’ strategy of private equity and is investing out of its $75-million corporate venture capital fund called the Asia Pacific Technology Fund. CG CoreEL is the first recipient of its funding activities and is currently negotiating terms with Xilinx. The deal size would be disclosed later. Xilinx is also in talks with few other companies in India for investment, all of which are at an early stage.
Xilinx seems to be following the ‘corporate venturing’ strategy of private equity and is investing out of its $75-million corporate venture capital fund called the Asia Pacific Technology Fund. CG CoreEL is the first recipient of its funding activities and is currently negotiating terms with Xilinx. The deal size would be disclosed later. Xilinx is also in talks with few other companies in India for investment, all of which are at an early stage.
Avendus Advisors to divest 20% stake to Old Lane and Mayfield Ventures
Hedge fund Old Lane Partners and venture capital firm Mayfield Ventures may buy around 20% stake in leading boutique investment bank Avendus Advisors for a sum of Rs. 80 crores. This puts the valuation of the bank at around Rs. 400 crores. Avendus is expected to gross annual revenues of $12 mn in 2006-07. The organization has grown from 16 professionals to 40 in 2006.
Avendus was founded in 1999 by Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal. They and employees of Avendus hold around 70% of the bank’s equity stake. Americorp, a Spanish institutional investor, holds 20% and the rest is held by Californian entrepreneur-investor Anil Godhwani. A minority stake earlier held by Infinity Venture, a venture capital fund, had been bought back by promoters around 2 years back.
Recently, Avendus has inducted two senior officials as vice presidents. Kishore Srinivasan, former joint GM and Head, Closely Monitored Assets (CMA) at ICICI Bank, joined Avendus as vice president and is now heading its corporate debt services. Also, Rajiv Shukla, former director, business development, at Pfizer, has joined Avendus as vice president, heading its life science vertical. Mr. Shukla is known to have played a leadership role on 5 acquisitions at Pfizer totaling $63 bn. Just a couple of days ago, Avendus was in the news for the exit of some of its high-profile employees, notably, Deepesh Garg, Assistant Vice-President, Consumer Products and Services Team, and Shiraz Bugwadia, Assistant Vice-President, Pharmaceuticals and Healthcare.
Avendus focuses on wealth management, institutional broking and debt solutions. It offers private equity syndication, mergers & acquisitions (M&A), and strategic advisory services to corporates and funds. Currently, it is in the process of expanding its operations abroad by opening offices in New York and Munich.
Read The Economic Times article.
Related Post: Key senior people exit Avendus Advisors to float boutique investment bank
Avendus was founded in 1999 by Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal. They and employees of Avendus hold around 70% of the bank’s equity stake. Americorp, a Spanish institutional investor, holds 20% and the rest is held by Californian entrepreneur-investor Anil Godhwani. A minority stake earlier held by Infinity Venture, a venture capital fund, had been bought back by promoters around 2 years back.
Recently, Avendus has inducted two senior officials as vice presidents. Kishore Srinivasan, former joint GM and Head, Closely Monitored Assets (CMA) at ICICI Bank, joined Avendus as vice president and is now heading its corporate debt services. Also, Rajiv Shukla, former director, business development, at Pfizer, has joined Avendus as vice president, heading its life science vertical. Mr. Shukla is known to have played a leadership role on 5 acquisitions at Pfizer totaling $63 bn. Just a couple of days ago, Avendus was in the news for the exit of some of its high-profile employees, notably, Deepesh Garg, Assistant Vice-President, Consumer Products and Services Team, and Shiraz Bugwadia, Assistant Vice-President, Pharmaceuticals and Healthcare.
Avendus focuses on wealth management, institutional broking and debt solutions. It offers private equity syndication, mergers & acquisitions (M&A), and strategic advisory services to corporates and funds. Currently, it is in the process of expanding its operations abroad by opening offices in New York and Munich.
Read The Economic Times article.
Related Post: Key senior people exit Avendus Advisors to float boutique investment bank
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