Tuesday, February 13, 2007
Essar Steel to invest $527 mn in steel plant JV with Vietnamese PSUs
The Times of India reports that Essar Steel is forming a JV with two government-run Vietnamese companies for setting up a 2 mn tonne-steel plant in southern Vietnam at a cost of $527 mn (about Rs. 2371.5 crores). The company, through its Singapore subsidiary Essar Steel Vietnam Holdings Private Limited (ESVHL), has signed an agreement with Vietnam Steel Corporation (VSC) and Vietnam General Rubber Corporation (GERUCO) to set up the plant in the Phu My Industrial Zone in southern Vietnam. The project is expected to be completed in 30 months. ESVHL would hold 65%stake, while VSC and GERUCO would hold 20% and 15% equity. Vietnam's steel consumption is expected to rise from 6 mn tonnes at present to 10 mn tonnes by 2012.
Daewoo Motor India’s assets sold for Rs. 765 crores
Crosslinks Finelease, a company promoted by Hyundai’s ex-president BVR Subbu and SpiceJet promoter Ajay Singh, along with the backing of a number of private equity firms, have bought out Daewoo Motor India’s Surajpur assets for Rs. 765 crores. A payment of Rs. 300 crores will be made immediately and the balance Rs. 465 crores will be paid on a staggered basis through monies raised through convertible debentures and debt.
The Crosslinks bid was earlier contested by some of the other bidders such as JBM Auto and Adzons Media and was accordingly referred to the Debt Recovery Tribunal (DRT). However, The DRT has upheld ARCIL’s award of the bid by Crosslinks, thus ruling in the latter’s favour. Crosslinks will pump in an additional Rs. 300 crores to upgrade the plant, which will be completed in six months and the plant will become operational soon after.
The Crosslinks’ business plan is to turn the Surajpur plant into a neutral product platform for large scale auto component play. Crosslinks intends to use the plant to make engines, transmissions and pressed components on lease manufacturing basis for domestic as well as overseas markets.
Asset reconstruction company ARCIL, which had acquired Daewoo Motor India’s debt from banks, had recommended Crosslinks’ bid to the DRT. The Crosslinks’ bid is the highest that the asset has ever attracted. There were two rounds of auction for the Surajpur plant earlier, which did not work out because of the very high floor prices of Rs. 2000 crores and 1000 crores, respectively. This time around, the bids ranged from Rs. 400 crores to Rs. 700 crores and the names in the fray included the likes of Suryamoney Finance and Moksh Infotech. One of the major attractions of the asset is the 200 acre-land, though ARCIL has been clear it wants the plant to be used for manufacturing.
Read The Economic Times article.
The Crosslinks bid was earlier contested by some of the other bidders such as JBM Auto and Adzons Media and was accordingly referred to the Debt Recovery Tribunal (DRT). However, The DRT has upheld ARCIL’s award of the bid by Crosslinks, thus ruling in the latter’s favour. Crosslinks will pump in an additional Rs. 300 crores to upgrade the plant, which will be completed in six months and the plant will become operational soon after.
The Crosslinks’ business plan is to turn the Surajpur plant into a neutral product platform for large scale auto component play. Crosslinks intends to use the plant to make engines, transmissions and pressed components on lease manufacturing basis for domestic as well as overseas markets.
Asset reconstruction company ARCIL, which had acquired Daewoo Motor India’s debt from banks, had recommended Crosslinks’ bid to the DRT. The Crosslinks’ bid is the highest that the asset has ever attracted. There were two rounds of auction for the Surajpur plant earlier, which did not work out because of the very high floor prices of Rs. 2000 crores and 1000 crores, respectively. This time around, the bids ranged from Rs. 400 crores to Rs. 700 crores and the names in the fray included the likes of Suryamoney Finance and Moksh Infotech. One of the major attractions of the asset is the 200 acre-land, though ARCIL has been clear it wants the plant to be used for manufacturing.
Read The Economic Times article.
Ashok Leyland bids for Punjab Tractors
Truck and bus manufacturing company Ashok Leyland has put in a bid for Punjab Tractors Limited (PTL). With the acquisition of PTL, Ashok Leyland intends to gain access in the tractor business. Ashok Leyland’s tractor foray is part of its bigger strategy of becoming an integrated automotive player.
The company has already been cranking up its component business and has set up a separate auto components division. It is also setting up a new gear manufacturing facility for its component business with special focus on third-party jobs.
Read The Economic Times article.
The company has already been cranking up its component business and has set up a separate auto components division. It is also setting up a new gear manufacturing facility for its component business with special focus on third-party jobs.
Read The Economic Times article.
Peterson Partners invests $3 mn in Coimbatore-based KPR Mills
Peterson Partners, a US-based private equity firm, has made a $3 mn investment in KPR Mills Limited. KPR Mills is a Rs. 450 crore-integrated textile and apparel company and owns spinning, knitting and garment making facilities. It was established in 1975. It has a global presence in the garment exporting industry including cotton yarn, fabric and knitted apparel.
KPR Mills is also the recipient of the largest PE investment in the Indian textile sector. In December 2006, Blue River Capital along with partners Brandot Investments and Argonaut Private Equity had invested Rs. 105 crores in the Coimbatore-based company.
Peterson Partners is based in Salt Lake City in Utah, USA. Peterson specializes in small to mid-sized companies. It was founded in 1995 and has over $300 mn under management through four funds.
Read the press release here.
KPR Mills is also the recipient of the largest PE investment in the Indian textile sector. In December 2006, Blue River Capital along with partners Brandot Investments and Argonaut Private Equity had invested Rs. 105 crores in the Coimbatore-based company.
Peterson Partners is based in Salt Lake City in Utah, USA. Peterson specializes in small to mid-sized companies. It was founded in 1995 and has over $300 mn under management through four funds.
Read the press release here.
Norway-based Orkla Foods to buy MTR Foods for $100 mn
As reported earlier, Orkla ASA, the $8.8 bn, Oslo-based diversified conglomerate with interests ranging from branded foods to finance, will buy MTR Foods for $100 mn deal. The deal will see the exit of MTR’s current investors and private equity firms JP Morgan Partners and the Singapore-based Aquarius India Fund. Aquarius had acquired a 20% stake in MTR Foods in 2000, later followed by JP Morgan Partners in 2002, who paid Rs. 20 crores for an additional 28% stake.
JP Morgan headed the company’s nationwide rollout into ready-to-eat foods, ready-to-cook ingredients and branded spices. Four years later, all these products had established brand equity, but the going was getting increasingly difficult due to severe competition.
It has been widely reported that JP Morgan Partners forced the owner’s hand as it was seeking to liquidate what was a small-sized investment for itself. Further, with MTR Foods taking time to achieve profits an IPO exit was not feasible at the current juncture.
Read the article in DNA Money.
JP Morgan headed the company’s nationwide rollout into ready-to-eat foods, ready-to-cook ingredients and branded spices. Four years later, all these products had established brand equity, but the going was getting increasingly difficult due to severe competition.
It has been widely reported that JP Morgan Partners forced the owner’s hand as it was seeking to liquidate what was a small-sized investment for itself. Further, with MTR Foods taking time to achieve profits an IPO exit was not feasible at the current juncture.
Read the article in DNA Money.
Ambit RSM merges tax practice with PriceWaterhouseCoopers
Indian accounting firm Ambit RSM Private Limited and global accounting major PriceWaterhouseCoopers (PwC) are merging to form India's largest accounting firm with a total staff strength of around 4000 people. The deal size has not been disclosed. RSM Advisory Services Private Limited, the taxation advisory arm of Ambit RSM Private Limited, would merge with PwC's tax practice effective April 1; the combined operations would be under the common brand of PwC. RSM managing partner Ashok Wadhwa will not join the combined firm and will continue to manage the Ambit group of businesses. The Ambit Group comprises of Ambit Corporate Finance, Ambit Capital and the new joint ventures of Ambit with TV18 and Centurion Bank of Punjab for online broking and with Nikko Asset Management for asset management business in India. Current revenues of PwC are at about Rs. 650 crores and would scale up to Rs. 800-900 crores post-merger. RSM has some large clients such as General Electric, Wal-Mart, Microsoft, Sony, British Airways, Bayer Group, Visa, Dell Computer, and in India companies from the Tata Group.
Read the article in The Economic Times.
Related Post:
Ambit RSM up for sale; may tie with UK-based accounting firm BDO International
Read the article in The Economic Times.
Related Post:
Ambit RSM up for sale; may tie with UK-based accounting firm BDO International
Monday, February 12, 2007
SEBI-RBI tiff stymies realty venture capital
The differences between the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have stalled foreign venture capital real estate funds from setting up shop in India. The RBI is insisting that funds floated by foreign venture capital investors (FVCIs) be brought on a par with real estate funds coming through the foreign direct investment (FDI) route for regulatory purposes.
At present, the FDI in the real estate sector is permitted through the automatic route and does not require the Foreign Investment Promotion Board (FIPB) nod. But fund houses have to adhere to certain project and financial restrictions.
The rules governing venture financing are liberal and allow funds to park money and withdraw it at their will. But financial conditions governing FDI rules require these funds to stay here for a minimum three years. Repatriation of any of the initial investment by funds before the stipulated period requires FIPB approval. The project conditions governing FDI rules prohibit sale of undeveloped land – a developer may purchase undeveloped land but must develop it before selling it. Also, it states that at least 50% of the project must be completed within five years from the date of obtaining statutory clearances.
Nearly 20 FVCI applications to invest in the Indian real estate sector are pending with the RBI, but have been approved by SEBI. Investments in the pipeline are estimated to be worth around $2 bn.
Article in The Financial Express.
At present, the FDI in the real estate sector is permitted through the automatic route and does not require the Foreign Investment Promotion Board (FIPB) nod. But fund houses have to adhere to certain project and financial restrictions.
The rules governing venture financing are liberal and allow funds to park money and withdraw it at their will. But financial conditions governing FDI rules require these funds to stay here for a minimum three years. Repatriation of any of the initial investment by funds before the stipulated period requires FIPB approval. The project conditions governing FDI rules prohibit sale of undeveloped land – a developer may purchase undeveloped land but must develop it before selling it. Also, it states that at least 50% of the project must be completed within five years from the date of obtaining statutory clearances.
Nearly 20 FVCI applications to invest in the Indian real estate sector are pending with the RBI, but have been approved by SEBI. Investments in the pipeline are estimated to be worth around $2 bn.
Article in The Financial Express.
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