Reliance Industries to form separate holding company for offshore oil assets

Reliance Industries Limited will transfer all its overseas oil assets to a new company to be called as Reliance Exploration and Production DMCC, to be headquartered in Dubai. The subsidiary will first take over the assets Reliance has secured in the West Asian countries. Modeled on ONGC’s ONGC Videsh, the investment arm for ONGC’s overseas oil assets, the new Reliance subsidiary will be the holding company for all overseas upstream assets in oil and gas. This restructuring is being done to reduce the risks on Reliance’s balance sheet as many of these oil assets are in politically risk-prone areas.

Reliance earlier had confined itself mainly to exploration and production within India, but has now taken up overseas expansion in a major way. Armed with its success in the Krishna Godavari deep waters (KG basin), the company has been looking at opportunities in oil-rich nations including Russia and Central Asian countries. The political risks in these countries are huge and exposing Reliance to such uncertainties could impact valuations. The subsidiary was floated in the third quarter of 2006-07.

Reliance has interests in exploration of overseas blocks in Yemen and Oman. It has already made oil discoveries in the onshore Malik 9 block in Yemen. The development plan for the block has been approved by the Republic of Yemen and test production commenced in December 2005. In the Oman offshore block, where RIL is the operator, the existing seismic data has been collected and 2D reprocessing of data is underway.

Read The Economic Times article.

Raksha TPA and UAE-based business group form healthcare JV

Haryana-based Raksha TPA, India’s third-largest health insurance claims administrator, has set up a joint venture with UAE-based industrial conglomerate Rais Hassan Sadi in Dubai. Rais Hasan Sadi is a 92-year old business group with interests ranging from shipping to real estate. The JV, to be called as RHS-Raksha TPA, with Raksha holding 49% and RHS holding the balance, will seek to direct patients needing tertiary healthcare to hospitals in India. Tertiary healthcare is specialized medical services that include cancer care, neurosurgery and burns care.

Initially, RHS-Raksha will empanel hospitals in Abu Dhabi and Sharjah and later Oman for cashless treatment of health insurance policyholders. For tertiary care cases, the JV will consider sending patients to Raksha’s network of hospitals in India.

Ritu Nanda, chairperson and CEO of RNIS College of Insurance, and Rajan Nanda of Escorts together hold 60% stake in Raksha TPA and the other 40% is held by Naresh Trehan, executive director of Escorts Heart Institute.

Read the Business Standard article.

Engineering company Greaves Cotton buys German firm Bukh-Farymann

Greaves Cotton, an engineering company and part of the Thapar Group has acquired 100% stake in Bukh-Farymann, a German firm through its wholly-owned subsidiary Greaves Cotton Netherlands BV for an enterprise value of approximately of €4.24 mn. Bukh-Farymann is a profit making company and engaged in the manufacture and marketing of Farymann diesel engines and components. The German subsidiary was incorporated recently. The acquisition includes existing debt of approximately €1.59 mn. Greaves expects the acquisition to facilitate its global plans and also boost export initiatives.

Read the Business Standard article.

TV18 group firm Web18 buys movie ticketing firm Bigtree Entertainment

Web18, the Internet arm of the TV18 Group has acquired around 60% stake in movie and entertainment ticketing company Bigtree Entertainment for $3-4 mn. Bigtree Entertainment is a comprehensive entertainment ticketing applications and solutions provider and services across 35 cities in India. The company provides ticketing applications to cinemas and entertainment venues via a complete suite of software products like box office ticketing, concessions management, web ticketing, loyalty management software, film programming, bar code ticketing, voucher management and others. Bigtree provides the necessary software, processes, systems, door delivery options, cash collection, warehousing and accounting services. It currently handles over 2.5 mn ticketing transactions annually for all major exhibition chains across the country.

The latest acquisition strengthens Web18's position in the e-transactions space, both on the PC as well as mobile phones. It had acquired a significant stake in travel portal Yatra.com and placement portal Jobstreet.com India a few months ago. Web18 already owns popular portals like cricketnext.com and products comparison site compareindia.com.

Read the article in Business Standard and The Economic Times.

Geodesic Information Systems to buy Chandamama for Rs. 10.02 crores

Software firm Geodesic Information Systems Limited will acquire 94% in children’s magazine publisher Chandamama India Limited for Rs. 10.02 crores. The cash component of the cash-cum-stock deal would amount to Rs. 1.6 crores. Geodesic is planning a makeover of the 60-year old magazine whereby the content would also be available on the Internet and mobile media.

Geodesic provides content over its universal instant messaging system, which is available on desktops, mobile devices and also over Internet radio. Chandamama, with a monthly circulation of around 200,000 copies, will continue to have its own identity. There have been reports in the past of Walt Disney planning to acquire a stake in Chandamama. Geodesic expects to complete the acquisition by March-end, and the consolidation of the accounts will commence from April 1, 2007.

Read more in the article on Reuters.com.

Singapore Stock Exchange takes 5% stake in BSE for $42.7 mn

Singapore Stock Exchange (SGX) has picked up 5% in Bombay Stock Exchange (BSE). SGX is the second overseas bourse after Germany's Deutsche Borse to buy a stake into the BSE. SGX has paid Rs. 5200 per share of BSE, totaling to a sale of $42.7 mn. This is the same amount paid by Deutsche Borse, which values the exchange at $855 mn. The BSE stake is the first foreign acquisition by the SGX, which is Asia's third-largest listed bourse. Earlier, the New York Stock Exchange (NYSE) had acquired 5% in National Stock Exchange (NSE) for $115 mn valuing NSE at $2.3 bn.

Read the article in The Economic Times.
Related Post: Deutsche Borse buys 5% stake in BSE for Rs. 189 crores

Sherwin Williams pursuing business options with Nitco Paints

US-based paints company Sherwin Williams is believed to be in advanced stages of talks with Nitco Paints, an associate company of Mumbai-based Nitco Tiles, for a possible business tie-up. Nitco Tiles is engaged in the building business. Sherwin Williams is pursuing various options like joint venture, buyout and a joint holding company.

Sherwin Williams is the second-largest paint company in the world. Its entry in India is expected to change the dynamics of the colour space in the country, which is currently dominated by biggies like Asian Paints, Berger, Kansai Nerolac, ICI Paints and Shalimar. The paints segment in India is growing at an average 15%.

Read the article in DNA Money.

In a related development, Nitco Tiles Ltd also plans to spend $25-30 mn to acquire stake in a Chinese tile manufacturer within the next two months. Nitco will use the capacity in China to cut costs and to export tiles to other countries directly. The acquisition will be financed out of a proposed Rs. 250 crore-issue of securities to overseas investors or to qualified institutional buyers. The company has already obtained shareholder approval for the issue.

Read more on this in The Economic Times.