Govt seeks to become party between warring Ambani brothers

Govt seeks to become party between warring Ambani brothers --September 29, 2008 Government is seeking to become party to the court case between Mukesh and Anil Ambani as to get the injunction on sale of gas from the nation's prime D6 fields lifted, Oil Secretary R S Pandey said today. Natural gas from Mukesh-run Reliance Industries' eastern offshore D6 field will help bridge the energy deficit in the country, Pandey, who met Mukesh Ambani at his office this morning, said. However, the legal dispute between the brothers and the petition that the Government had moved did not figure during the 45-minute discussions. "We did not discuss about this case. He did not talk about this," Pandey said, but did not say what future action the Government may take if the Bombay High Court did not vacate the stay on gas sales from D6. "We will cross the bridge when we reach it," he said when asked if the Government may move Supreme Court. Anil Ambani's Reliance Natural Resources Ltd claims right over 28 million standard cubic meters per day of gas from D6 as per a family agreement that split the Dhirubhai Ambani empire into Mukesh and Anil. RNRL's claim is disputed by RIL. The Bombay High Court on plea of RNRL had stayed sale of gas from D6 to anyone other than RNRL and state power utility NTPC, to which RIL had in 2004 bid to sell 12 mmscmd gas at $2.34 per million British thermal unit (mmBtu). "Our lawyers have already moved an application (in the Mumbai High Court) seeking vacating the injunction," Pandey said. Government had impleaded in the gas row between the two brothers on the advice of Attorney General and the Law Ministry which saw the Government as an "affected party" from the Bombay High Court stay on sale of gas from D6.

3 major funds offload Rs 170 cr shares in 7 days

3 major funds offload Rs 170 cr shares in 7 days Monday, September 29, 2008 The worsening financial crisis in the US has led to a selling frenzy among the foreign funds invested in Indian stocks, with three of the major ones Morgan Stanley, Goldman Sachs and Merrill Lynch offloading as much as Rs 170 crore in the open market transactions. Analysts believe the liquidity crunch being witnessed by major global financial institutions has made them heavy sellers in stocks from emerging markets including India as they need cash back home. As a result, Indian stock market has witnessed the net sale by FIIs touching nearly two billion dollar mark so far this month. According to data available with market regulator SEBI the foreign institutional investors (FIIs) have sold off shares worth USD 1,998.50 million (Rs 8,061 crore) so far, this month. While in the past week alone FIIs have offloaded shares worth USD 549 million (about Rs 2,277 crore). "Majorly the foreign investors based in US are the main sellers in Indian equities as they need cash back home to shore up their balance sheets," Bonanza Portfolio President Research P K Agarwal said. Morgan Stanley alone sold off shares worth Rs 104 crore, while Merrill Lynch and Goldman Sachs offloaded equities worth Rs 36 and 30 crore respectively, in a host of domestic companies in various bulk deals on the bourses in the past week.

Market crashes on more corporate failures

Market crashes on more corporate failures Monday, September 29, 2008 Indian markets tumbled post sun-outage break on dismal cues from global markets. Players frenziedly cut positions on fears there will be more corporate failures and the US bailout plan may fail to resolve the credit crisis. The failure of US financial services sector is now spilling over to European companies. Fortis, the largest Belgian financial service firm, recently filed for the bailout. Bradford & Bingley Britain's biggest lender to landlords may also be taken over. At 2:11 pm, National Stock Exchange's 50-share Nifty dropped 4.33 per cent to 3812 and BSE Sensex was at 12490, down 4.67 per cent. Nifty October futures was at a premium of 9 points to the spot and it added 35 lakh shares in open interest. Rising open interest coupled with narrowing premium indicates short build up in the contract. On BSE, all sectors were in red. Realty, banking, consumer durables and IT were the worst hit sectors. Top losers of BSE were ICICI Bank (-11.41%), Jaiprakash Associates (-12.39%), Reliance Infra (-7.43%), DLF Ltd (-8.80%) and Satyam Computers (-8.25%). There were no gainers on Sensex. On NSE, SAIL (0.97%), Hero Honda (0.65%), Cipla (0.57%) and GAIL (0.42%) were marginally up. Meanwhile, stocks dropped in Europe and Asia on rising numbers of corporates awaiting bailout.

Rescue bill unveiled The federal government would put up as much as $700 billion in a far-reaching plan to rescue the nation's troubled financial system, according to a bill unveiled by lawmakers on Sunday. House Speaker Nancy Pelosi, D-Calif., said she hopes the House will take up the bill on Monday. Sen. Majority Leader Harry Reid, D-Nev., said he believes the Senate can move on the legislation by Wednesday. Pelosi said the provisions added by Congress will protect taxpayers from having to pay for the bailout. "We sent a message to Wall Street - the party is over," she said at a press conference with Reid and other Democratic leaders from the House and Senate. The core of the bill is based on Treasury Secretary Henry Paulson's request for authority to purchase troubled assets from financial institutions so banks can resume lending and so the credit markets, now virtually frozen, can begin to operate more normally. But Democrats and Republicans - concerned about the potential taxpayer cost - have added several conditions and restrictions to protect taxpayers on the down side and give them a chance at some of the potential upside if the companies benefit from the plan. "People have to know that this isn't about a bailout of Wall Street. It's a buy-in so we can turn our economy around," Pelosi said. Key negotiators for the financial rescue plan will be busy trying to line up votes on Capitol Hill on Sunday to support the accord they reached soon after midnight. House Majority Leader Steny Hoyer, D-Md., told CNN he believes a majority of representatives on both sides of the aisle can and will support the bill. President Bush, in a statement Sunday evening, said "this is a difficult vote, but with the improvements made to the bill, I am confident Congress will do what is best for our economy by approving this legislation promptly." On Sunday evening, the House Republican working group, which was stringently opposed to earlier drafts of the plan and offered a counterproposal, indicated it would support the bill, and its members are encouraging other Republicans in the House to do the same. "Nobody wants to have to support this bill, but it's a bill that we believe will avert the crisis that's out there," House Minority Leader John Boehner, R-Ohio, told reporters.

IDFC PE buys 17.1% in Suzlon's forging arm

IDFC PE buys 17.1% in Suzlon's forging arm IDFC Private Equity has picked up a 17.1% stake in Tulsi Tanti-promoted SE Forge — a 100% subsidiary of Suzlon Energy (SEL) — for Rs 400 crore. The transaction values SE Forge at a little over Rs 2,300 crore. IDFC PE has made this investment out of its recently closed Fund III, which has a corpus of about $700 mn. SE Forge, manufacturer of forging and casting products, primarily catering to the wind power industry, intends to use funds for its expansion plans. The company is setting up one of the largest foundry and forging capacities in the world to cater to the fast growing wind energy segment. SE Forge is setting up two facilities — a 120,000 mt foundry unit in Coimbatore and a ring-rolling forging facility at Vadodara, with a capacity to produce 42,000 rings annually. IDFC PE will be represented by Shyam Sundar on the company board. The company is expected to make an announcement to this effect shortly. Yes Bank was the sole advisor to SE Forge for this transaction. “We are extremely pleased to partner with Suzlon to build world-class component manufacturing facilities for the wind energy sector in India through SE Forge,” Luis Miranda, president and CEO, IDFC PE, said. “The wind energy sector is expected to maintain its high growth, supported by strong tail-winds like increasing cost-competitiveness of wind energy, high crude prices, thrust for green power and support from governments. There is a demand-supply gap for large casting and forging products globally and an increasing requirement from the wind and other industries for such products,” he added. SE Forge’s foundry unit at Coimbatore will manufacture ductile iron castings of weight ranging from 1 to 25 tonnes per piece. However, it can also produce castings of larger size. For the wind industry, the foundry unit will produce large castings like hub, rotor shaft, main-frame and bearing housing used in the manufacturing of wind turbine generators (WTGs). The foundry unit also plans to cater to the needs of other industries like diesel engines, machine tools and engineering equipments and is initially planning to produce engine blocks and gearbox castings. Its forging unit near Vadodara will manufacture forged rings for WTGs namely flanges for tabular towers, gear rim, ring gear for gear boxes and bearing rings which will be supplied to WTG or WTG component manufacturers. The forgings unit is established with a capacity of about 42,000 rings pa. Meanwhile, flagship company Suzlon Energy, which recently acquired Germany’s REpower, has announced that it will raise Rs 1,800 crore from a rights issue. The world’s fifth-largest wind turbine maker recently bought Portuguese energy major Martifer’s 22.48% stake in REpower for about Rs 1,748 crore. IDFC PE manages funds of $1.3 bn. Some of its investments include Delhi International Airport, L&T Infrastructure Developers, Gujarat Pipavav Port and Chalet Hotels.