A day after HSBC, Canara Bank and Oriental Bank of Commerce announced their three-way life insurance tie-up, real estate giant DLF has joined hands with US-based financial player Prudential Financial, Inc. (PFI) for a foray in life insurance business. The two partners will invest about $250 mn (Rs. 1000 crores) over the next ten years in the venture. Under the terms of agreement, Prudential will have 26% stake and the remaining 74% will be held by DLF Group in the JV. The joint venture has been christened as DLF Pramerica Life Insurance Company Limited. Pramerica is a brand name used in select countries by Prudential Financial. The company will initially have a paid-up capital of Rs. 100 crores, including Rs. 26 crores by Prudential. Both the partners would have representatives on the Board, while Prudential would take care of the operations. The company would be based in New Delhi
The company is applying for a license from the Insurance Regulatory and Development Authority (IRDA), and hopes to start operations by early 2008. Prudential is in talks with several banks and non-banking finance companies (NBFCs) to distribute its insurance products, apart from having its own distribution products.
Prudential Financial has about $616 bn of assets under management by December-end 2006 and operates in the US, Japan, Mexico as well as in many countries of Asia and Latin America.
Read articles in The Economic Times and Business Standard.
Wednesday, March 7, 2007
Ashok Leyland, M&M lead Punjab Tractors bid race; TAFE, Tatas back out, Tata Group buys plant in South Africa
Ashok Leyland Limited and Mahindra & Mahindra Limited appear to be the frontrunners in the race to acquire a stake of around 43% in Punjab Tractors Limited. The 43% stake has been put on the block by owners, Delhi-based private equity fund Actis and the Burman family, promoter of Dabur. According to unconfirmed reports, Ashok Leyland has placed a higher bid in the range of Rs. 320-380 per share. The Ashok Leyland bid demands some guarantees from the management. Details of M&M’s bid were not known.
If it does eventually manage to acquire the share, Ashok Leyland will have to make a mandatory open offer of another 20% of Punjab Tractors and would eventually become a majority shareholder of the company. An announcement on the stake sale is expected shortly. However, it is still not clear whether Leyland has also managed to acquire the 14% stake Punjab Tractors holds in group company Swaraj Mazda Limited and the 33% stake in Swaraj Engines Limited through the bidding process.
Punjab Tractors has strong brand equity in the tractor market, especially in the northern part of India and the winning bidder could enter the fast-growing tractor segment through this acquisition.
In a related development, of the four front-runners, the Tata Group, uncomfortable with the valuation of the deal, has backed out of the bidding process, while Tractor and Farm Equipment (TAFE) is also believed to have pulled out of the race. The final bids have seen the list of bidders for Punjab Tractors coming down significantly. That list includes Sonalika (International Tractors), Escorts, Italian tractor company Same Duetz-Fahr and a private equity consortium that was backing Punjab Tractors’ former boss Yash Mahajan.
Meanwhile, the Tata Group has acquired a car making plant in Pretoria in South Africa for an undisclosed amount, which will be used as a base for Tata Motors exports to Europe, besides catering to the South African market.
Read the articles in DNA Money and Business Standard.
Related Post: Actis and the Burmans seek re-bids for Punjab Tractors
If it does eventually manage to acquire the share, Ashok Leyland will have to make a mandatory open offer of another 20% of Punjab Tractors and would eventually become a majority shareholder of the company. An announcement on the stake sale is expected shortly. However, it is still not clear whether Leyland has also managed to acquire the 14% stake Punjab Tractors holds in group company Swaraj Mazda Limited and the 33% stake in Swaraj Engines Limited through the bidding process.
Punjab Tractors has strong brand equity in the tractor market, especially in the northern part of India and the winning bidder could enter the fast-growing tractor segment through this acquisition.
In a related development, of the four front-runners, the Tata Group, uncomfortable with the valuation of the deal, has backed out of the bidding process, while Tractor and Farm Equipment (TAFE) is also believed to have pulled out of the race. The final bids have seen the list of bidders for Punjab Tractors coming down significantly. That list includes Sonalika (International Tractors), Escorts, Italian tractor company Same Duetz-Fahr and a private equity consortium that was backing Punjab Tractors’ former boss Yash Mahajan.
Meanwhile, the Tata Group has acquired a car making plant in Pretoria in South Africa for an undisclosed amount, which will be used as a base for Tata Motors exports to Europe, besides catering to the South African market.
Read the articles in DNA Money and Business Standard.
Related Post: Actis and the Burmans seek re-bids for Punjab Tractors
Tuesday, March 6, 2007
Indiareit funds invest $32 mn in Mumbai-based Neptune Developers
Indiareit Offshore Fund and Indiareit Fund Scheme I, real estate private equity funds with a joint corpus of $300 mn, made investment of approximately $32 mn in a project involving development of commercial properties in Kurla, Mumbai by Neptune Developers Private Limited. Neptune, one of the renowned real estate developers in Mumbai, is engaged in the business of real estate construction and development in India. Nishith Desai Associates acted as legal counsel to Indiareit Offshore Fund and Indiareit Fund Scheme I for this investment.
Temasek sells stake in Apollo Hospitals for Rs. 134 crores
Singapore government's investment company Temasek Holdings has sold its entire holding of 5.26% stake in healthcare major Apollo Hospitals Enterprise for Rs. 133.68 crores. The stakes were held by two investment firms Maxwell Mauritius and Aranda Investments.
Maxwell Mauritius sold 2.079 mn shares, while Aranda Investments sold 640,000 shares for Rs. 491.50 each in a bulk deal in the open markets. Aranda Investments’ holding represented a 1.24% stake while that of Maxwell Mauritius represented 4.03% in the Chennai-based healthcare group.
Meanwhile, another fund house Fid Funds Mauritius of Fidelity Investments bought 2.94 mn shares (5.7%) of Apollo for around Rs. 144.62 crores at the same price Temasek's units sold their stakes. Fidelity Select Portfolios Medical Delivery Portfolio already holds 723,000 shares representing a 1.4% stake in Apollo Hospitals.
Article in Business Standard.
Maxwell Mauritius sold 2.079 mn shares, while Aranda Investments sold 640,000 shares for Rs. 491.50 each in a bulk deal in the open markets. Aranda Investments’ holding represented a 1.24% stake while that of Maxwell Mauritius represented 4.03% in the Chennai-based healthcare group.
Meanwhile, another fund house Fid Funds Mauritius of Fidelity Investments bought 2.94 mn shares (5.7%) of Apollo for around Rs. 144.62 crores at the same price Temasek's units sold their stakes. Fidelity Select Portfolios Medical Delivery Portfolio already holds 723,000 shares representing a 1.4% stake in Apollo Hospitals.
Article in Business Standard.
Jupiter Aviation may pick up stake in Airbus’ Indian MRO outfit
Bangalore-based aviation venture development company Jupiter Aviation may pick up a stake in the proposed maintenance, repair and overhaul (MRO) unit of European aircraft manufacturer Airbus Industrie. Jupiter Aviation has been promoted by ex-BPL chief Rajeev Chandrasekhar and is a venture development subsidiary of Jupiter Capital, a venture development and investment firm. Jupiter Capital has invested in infrastructure, entertainment, technology and aviation. State-run aerospace major Hindustan Aeronautics Limited (HAL) is also planning to team up with Airbus for the MRO that will come up in Nashik and Bangalore.
The Rs. 450 crore-MRO project is a commitment by Airbus to the Indian government for buying 43 aircrafts for Indian Airlines, costing nearly Rs. 10,000 crores. Airbus is in talks with eight international MRO operators to run the project in India. The talks are at an advanced stage. The investment details and nature of the MRO unit will be finalized by the international MRO operator, who will pick up a stake in the project.
Earlier, Jupiter Aviation and Airbus’ parent company and aerospace group EADS had signed a strategic memorandum of understanding (MoU) to collaborate in aviation ventures focusing on lifecycle support and training. Jupiter investments in these aviation ventures are expected to exceed $250 mn (nearly Rs. 1100 crores). The company is also investing in and launching the country’s first fractional share aviation company, to be called PrivateAir, and is negotiating the purchase of a fleet of business jets and corporate helicopters.
Read the Business Standard article.
The Rs. 450 crore-MRO project is a commitment by Airbus to the Indian government for buying 43 aircrafts for Indian Airlines, costing nearly Rs. 10,000 crores. Airbus is in talks with eight international MRO operators to run the project in India. The talks are at an advanced stage. The investment details and nature of the MRO unit will be finalized by the international MRO operator, who will pick up a stake in the project.
Earlier, Jupiter Aviation and Airbus’ parent company and aerospace group EADS had signed a strategic memorandum of understanding (MoU) to collaborate in aviation ventures focusing on lifecycle support and training. Jupiter investments in these aviation ventures are expected to exceed $250 mn (nearly Rs. 1100 crores). The company is also investing in and launching the country’s first fractional share aviation company, to be called PrivateAir, and is negotiating the purchase of a fleet of business jets and corporate helicopters.
Read the Business Standard article.
IFC to invest $40 mn in West Coast Paper
The World Bank-private equity arm International Finance Corporation (IFC) will invest $40 mn (Rs. 180 crores) in West Coast Paper Mills Limited. It has completed the due diligence of West Coast and a formal announcement is expected to come soon.
The Rs. 550 crore-West Coast Paper Mills will get the investment from IFC by April. The investment will be made in the form of debt for the company’s Rs. 1000 crore-expansion plans, but there would be no equity sale to IFC.
Private equity investment in domestic paper companies is rising steadily and could grow further as the sector prepares to spend Rs. 13,000 crores in the next three years to expand capacity. IFC earlier had invested $40 mn in Andhra Pradesh Paper Mills Limited in debt and equity.
West Coast has plans to ramp up capacity from 180,000 tonnes to 300,000 tonnes per annum in the next three years. The company has recently placed orders to global firm Metso for pulp line.
Local paper companies, including Ballarpur Industries (Bilt), Tamil Nadu Newsprint, JK Paper and West Coast, will be adding over 2 mn tonnes in capacity to the current total capacity of over 6 mn tonnes in next three-year period.
Read the article in DNA Money.
The Rs. 550 crore-West Coast Paper Mills will get the investment from IFC by April. The investment will be made in the form of debt for the company’s Rs. 1000 crore-expansion plans, but there would be no equity sale to IFC.
Private equity investment in domestic paper companies is rising steadily and could grow further as the sector prepares to spend Rs. 13,000 crores in the next three years to expand capacity. IFC earlier had invested $40 mn in Andhra Pradesh Paper Mills Limited in debt and equity.
West Coast has plans to ramp up capacity from 180,000 tonnes to 300,000 tonnes per annum in the next three years. The company has recently placed orders to global firm Metso for pulp line.
Local paper companies, including Ballarpur Industries (Bilt), Tamil Nadu Newsprint, JK Paper and West Coast, will be adding over 2 mn tonnes in capacity to the current total capacity of over 6 mn tonnes in next three-year period.
Read the article in DNA Money.
HSBC forms life insurance JV with Canara Bank and Oriental Bank of Commerce
British banking giant HSBC has formed a life insurance JV with Bangalore-based Canara Bank and New Delhi-based Oriental Bank of Commerce.
Canara Bank will hold 51% stake in the venture with HSBC taking 26% and Oriental Bank of Commerce settling with 23%. The business has been capitalized with a corpus of Rs. 2 bn ($44.97 mn).
HSBC joins a league of global firms such as New York Life, Prudential and Allianz in setting up an insurance venture in India which has a population of 1.1 bn people, and an insurance market that has doubled to more than $20 bn dollars in annual premiums since it was thrown open to foreign investment in 2000.
Read The Economic Times article.
Canara Bank will hold 51% stake in the venture with HSBC taking 26% and Oriental Bank of Commerce settling with 23%. The business has been capitalized with a corpus of Rs. 2 bn ($44.97 mn).
HSBC joins a league of global firms such as New York Life, Prudential and Allianz in setting up an insurance venture in India which has a population of 1.1 bn people, and an insurance market that has doubled to more than $20 bn dollars in annual premiums since it was thrown open to foreign investment in 2000.
Read The Economic Times article.
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