Delhi-based infrastructure player DS Constructions is about to receive a funding of Rs. 900 crores mix of debt and equity. Part of the debt will be convertible into equity at a later date. The money will be used to fund the equity commitments of the company for the various BOT projects. ICICI Securities is the strategic advisor for the deal.
Three institutions are in fray for the deal, which include a leading Indian bank, a leading European bank and the alternative investment vehicle of a Hong Kong-based hedge fund. At $185 mn, this is one of the largest transactions in the Indian private equity space. Of the total amount, the company is picking up $135 mn right now and has an option to take up the remainder later. About 25% of the total ($35 mn) will be convertible to equity if DS Constructions decides to go for a listing. The company is being tentatively valued at $800-1,000 mn, based on revenues and projects at hand.
DS Constructions is a mid-size construction company. It recorded a turnover of Rs. 450 crores last year. The company has an order backlog of Rs. 4000 crores, primarily in the road sector. DSC has a 67% stake in a Rs. 1900 crore-expressway in Haryana. It is also executing two road projects of total value of Rs 740 crore in Uttar Pradesh. All these projects have achieved financial closure. In addition to these, the company has also been awarded two hydel projects adding up to 1260 MW and worth Rs. 6500 crore. The company is considering an IPO in 6-12 months to fund our power projects. In addition to roads and hydel projects, DS Constructions has also done a railway project on BOT. The company has recently formed a 80:20 JV with Munich Airport International to bid for airport modernization projects.
Read the article in The Economic Times.
Thursday, January 18, 2007
Clearing Corporation of India to collaborate with The Euroclear Group
The Clearing Corporation of India Limited (CCIL) has signed a memorandum of understanding (MoU) regarding post-trading processing transactions. The entities have agreed to collaborate on post-trade processing and explore the feasibility of a communications gateway between CCIL and European Bank, the international central securities depository (CSD).
The Euroclear Group includes Euroclear Bank as well as Euroclear Belgium, Euroclear France, Euroclear Netherlands and CRESTCo, the CSDs of Belgium, France, the Netherlands, and the UK and Ireland, respectively, and settles securities transactions of over €350 trn every year.
Read the complete article in Business Standard.
The Euroclear Group includes Euroclear Bank as well as Euroclear Belgium, Euroclear France, Euroclear Netherlands and CRESTCo, the CSDs of Belgium, France, the Netherlands, and the UK and Ireland, respectively, and settles securities transactions of over €350 trn every year.
Read the complete article in Business Standard.
BankMuscat buys stake in domestic brokerage Mangal Keshav
Oman’s largest listed company, BankMuscat, is buying 43% stake in brokerage firm Mangal Keshav for an undisclosed sum. This acquisition makes BankMuscat the single-largest investor in the Indian financial services and securities sector from the Sultanate. The financial due diligence on behalf of BankMuscat was done by PriceWaterhouse Coopers India, while the legal due diligence was done by Amarchand Mangaldas. The transaction is expected to be completed in first quarter of 2007.
The Mangal Keshav Group was set up in 1939 and is one of the oldest brokerage houses in India. It is present in securities trading, commodities trading, insurance broking and IPO / mutual fund distribution space. The group is one of the top 20 brokers in the country by market share and is a member of all leading equity and commodity exchanges. It is also a member of the Dubai Gold & Commodities Exchange and has an office in Dubai.
As per Morgan Stanley research, the Indian equity markets is seeing one of the strongest rallies and trading volumes are expected to double to $3.2 trn in 2010 from about $1.6 trn currently. Morgan Stanley projects the Indian brokerage business to grow to $3.9 bn by 2015. Several leading international banks such as Citigroup, BNP, ABN-AMRO, etc. have announced their foray in the securities business in India.
Read the article in Business Standard.
The Mangal Keshav Group was set up in 1939 and is one of the oldest brokerage houses in India. It is present in securities trading, commodities trading, insurance broking and IPO / mutual fund distribution space. The group is one of the top 20 brokers in the country by market share and is a member of all leading equity and commodity exchanges. It is also a member of the Dubai Gold & Commodities Exchange and has an office in Dubai.
As per Morgan Stanley research, the Indian equity markets is seeing one of the strongest rallies and trading volumes are expected to double to $3.2 trn in 2010 from about $1.6 trn currently. Morgan Stanley projects the Indian brokerage business to grow to $3.9 bn by 2015. Several leading international banks such as Citigroup, BNP, ABN-AMRO, etc. have announced their foray in the securities business in India.
Read the article in Business Standard.
SEBI asks Actis to pay Phoenix Lamps’ minority shareholders same price as paid to promoters
The Securities and Exchange Board of India (SEBI) has asked private equity firm Actis to increase the open offer price for the minority shareholders of Phoenix Lamps by 25% to Rs. 190 a share.
Actis made the open offer it bought the entire 37%t stake in Phoenix Lamps from its promoters, the Gupta family. Priced at Rs. 152 a share, the mandatory 20% public offer was supposed to open on August 31 and close on September 19. SEBI has asked Actis to pay the same price it offered to the promoters. Actis had agreed to pay Rs. 190 a share to the promoters of the company, 25% higher than the price of the open offer, on account of non-compete fees. However, SEBI does not seem to be convinced of Actis’ argument.
This is the second instance of the SEBI coming down heavily on acquirers for paying the promoters more on account of non-compete fees. Last month, it had asked the German cement company Heidelberg Cement, which had acquired Mysore Cement, to raise the open offer price by 25% to Rs. 72.50 a share, the price it agreed to pay the promoters including non-compete fees. Heidelberg, however, challenged the SEBI order with the Securities Appellate Tribunal. Actis’ future course of action might be linked to the outcome of the SAT ruling on Heidelberg Cement.
Phoenix Lamps is the third management buyout by Actis in India after Nitrex and Punjab Tractors. Phoenix Lamps, owner of Halonix brand, posted a net profit of Rs. 24 crores last year on total sales of Rs. 230 crores.
Read the article in Business Standard.
Actis made the open offer it bought the entire 37%t stake in Phoenix Lamps from its promoters, the Gupta family. Priced at Rs. 152 a share, the mandatory 20% public offer was supposed to open on August 31 and close on September 19. SEBI has asked Actis to pay the same price it offered to the promoters. Actis had agreed to pay Rs. 190 a share to the promoters of the company, 25% higher than the price of the open offer, on account of non-compete fees. However, SEBI does not seem to be convinced of Actis’ argument.
This is the second instance of the SEBI coming down heavily on acquirers for paying the promoters more on account of non-compete fees. Last month, it had asked the German cement company Heidelberg Cement, which had acquired Mysore Cement, to raise the open offer price by 25% to Rs. 72.50 a share, the price it agreed to pay the promoters including non-compete fees. Heidelberg, however, challenged the SEBI order with the Securities Appellate Tribunal. Actis’ future course of action might be linked to the outcome of the SAT ruling on Heidelberg Cement.
Phoenix Lamps is the third management buyout by Actis in India after Nitrex and Punjab Tractors. Phoenix Lamps, owner of Halonix brand, posted a net profit of Rs. 24 crores last year on total sales of Rs. 230 crores.
Read the article in Business Standard.
Government may remove distinctions between FDI and FII
The government is contemplating the removal of the distinction between FDI and FII investments. The new policy will require changes in the Foreign Exchange Management Act (FEMA) regulations, and will look at foreign investments in a company as a whole, instead of treating foreign institutional investors (FIIs) as a separate entity.
The proposed policy change will impact several sectors, notably, the asset reconstruction companies, direct-to-home distribution of broadcast signals and real estate, where separate sub-ceilings or conditions apply at present for foreign direct investment (FDI), leaving FII investments outside their scope.
Senior finance ministry officials are set to hold a meeting later this week with the Reserve Bank of India (RBI) and the Department of Industrial Policy and Promotion (DIPP) to take a final view on this matter. The debate over removing distinctions between FII investments and FDI came up following the DIPP proposal over foreign investments in the real estate sector.
Read more in The Economic Times.
The proposed policy change will impact several sectors, notably, the asset reconstruction companies, direct-to-home distribution of broadcast signals and real estate, where separate sub-ceilings or conditions apply at present for foreign direct investment (FDI), leaving FII investments outside their scope.
Senior finance ministry officials are set to hold a meeting later this week with the Reserve Bank of India (RBI) and the Department of Industrial Policy and Promotion (DIPP) to take a final view on this matter. The debate over removing distinctions between FII investments and FDI came up following the DIPP proposal over foreign investments in the real estate sector.
Read more in The Economic Times.
Amruth IMFL brands attract attention from Radico Khaitan, Mason & Summers’ Vangal
Radico Khaitan and serial entrepreneur Ramesh Vangal seem interested in buying some liquor assets of the South-based Amruth Group. E&Y has been mandated by the Jagdale family-owned Amruth Distilleries to find suitors for its three IMFL brands and a bottling plant in Kerala which has a valuation of around Rs. 100-150 crores.
Amruth may offload Old Port Rum, Bejois Brandy and Prestige Whisky along with its plant as part of a re-structuring exercise. E&Y has opened talks with several potential buyers in recent weeks. The three brands together sold over a million cases with net revenues of Rs. 68 crores in FY 2006. Old Port Rum is the largest amongst the three brands that sell mainly in the southern markets. Old Port Rum and Bejois Brandy hold respectable share in their respective segments with Kerala being a key market.
Radico Khaitan, the second largest domestic liquor company, has made a slew of mid-sized acquisitions in recent years including the takeover of the IMFL portfolio of Brihans Maharashtra Sugar Syndicate. Ramesh Vangal, who steered Pepsi and Seagram into the country, returned to the liquor space two years back with a start-up entity Mason & Summers. He has been on the prowl for acquisitions to strengthen the operations.
Read the article in The Economic Times.
Amruth may offload Old Port Rum, Bejois Brandy and Prestige Whisky along with its plant as part of a re-structuring exercise. E&Y has opened talks with several potential buyers in recent weeks. The three brands together sold over a million cases with net revenues of Rs. 68 crores in FY 2006. Old Port Rum is the largest amongst the three brands that sell mainly in the southern markets. Old Port Rum and Bejois Brandy hold respectable share in their respective segments with Kerala being a key market.
Radico Khaitan, the second largest domestic liquor company, has made a slew of mid-sized acquisitions in recent years including the takeover of the IMFL portfolio of Brihans Maharashtra Sugar Syndicate. Ramesh Vangal, who steered Pepsi and Seagram into the country, returned to the liquor space two years back with a start-up entity Mason & Summers. He has been on the prowl for acquisitions to strengthen the operations.
Read the article in The Economic Times.
UTI to divest 36.58% stake in SICOM
The Unit Trust of India has invited bids from financial investors to sell its 36.58% stake in State Industrial Corporation of Maharashtra (SICOM), the investment arm of Maharashtra government. UTI holds 40% stake in SICOM - 36.58% through Specified Undertaking of Unit Trust of India (SU-UTI) and 3.5% is held by UTI Mutual Fund (UTI AMC).
The bids have been invited for the entire 36.58% stake held by SU-UTI. Foreign investors, including International Finance Corporation (IFC), the private sector lending arm of the World Bank Group and DEG, one of the largest European development finance institutions, have approached investment bankers to take stake in SICOM. Standard Chartered Private Equity (SCPE), Lehman Brothers, Singapore's Temasek Holdings and a couple of hedge funds may also be interested in picking up stake in SICOM (See Related Post).
Apart from UTI's 40%, the Maharashtra government holds 49% stake in the corporation. The remaining stake is held by other financial institutions and employees.
Read the article in The Economic Times.
The bids have been invited for the entire 36.58% stake held by SU-UTI. Foreign investors, including International Finance Corporation (IFC), the private sector lending arm of the World Bank Group and DEG, one of the largest European development finance institutions, have approached investment bankers to take stake in SICOM. Standard Chartered Private Equity (SCPE), Lehman Brothers, Singapore's Temasek Holdings and a couple of hedge funds may also be interested in picking up stake in SICOM (See Related Post).
Apart from UTI's 40%, the Maharashtra government holds 49% stake in the corporation. The remaining stake is held by other financial institutions and employees.
Read the article in The Economic Times.
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