Letter forged, say Sebi, Pyramid Saimira

Pyramid Saimira Theatre, the Chennai-based entertainment firm, was in the limelight Tuesday after it announced it was the victim of a forgery and the stock was frozen at circuit filer of 10 per cent on In an early morning statement, the company confirmed it had received a letter from the stock market regulator, Securities and Exchange Board of India (Sebi), asking its chairman PS Saminathan to make an open offer to buy 20 per cent in the company at Rs 250 a share. A couple of hours later, Pyramid called a press conference to say Sebi’s letter was forged and that the company planned to launch a formal complaint with the Central Bureau of Investigation (CBI). Meanwhile, Sebi issued a statement saying it had not issued any such letter to the company as has been widely reported in the media. “It appears that the letter is being circulated with ulterior motives,” the statement said. In a release in the evening, Sebi said it was investigating the matter including the origin of the letter. “Sebi is also separately inquiring into the dealing in the scrip following the press reports, including alleged violation of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997,” the statement said. the Bombay and National Stock Exchanges for the second day in a row.

Unitech in talks with PEs to raise $500 m via debt issue

Unitech, the financially troubled Gurgaon-bAccording to a person with direct direct knowledge of the company’s plan, Unitech, which is desperately looking for a cash infusion to repay a debt of Rs 2,700 crore in three months, is holding negotiations with a host of global PE players, including TPG Axon, Carlyle, Och-Ziff, Sun Apollo and IL&FS funds.The realty firm is looking at issuing debt instruments that will be converted to equity in the next 18 months or so. At the current market capitalisation, $300-500 million would equate to 22-36% of the company’s equity stake. The promoters, Ramesh Chandra and family, own 74.5% stake in the company. According to an investment banking executive, the conversion price could be in the range of Rs 60 a share, but it couldn’t be independently verified. Unitech is also looking at raising about $200 million from its various residential projects through special purpose vehicles. UBS is advising Unitech on its entire fund-raising effort. Unitech MD Sanjay Chandra said, “Multiple funds have shown interest in investing in the company as well as its projects. We are evaluating the proposals.” On Monday, Unitech’s board approved the proposal to raise Rs 5,000 crore through the issuance of securities. However, there are doubts about the Gurgaon-based company’s ability to find an investor at an attractive price. An analyst with a Mumbai-based domestic brokerage says it won’t be easy for Unitech to raise funds and no institutional investor will be willing to pay a huge premium for investing in the company. Unitech shares declined by 7.5% on BSE to close at Rs 42 on Tuesday. Fitch Ratings on Tuesday downgraded Unitech’s long-term rating to ‘BBB(ind)’ from ‘A-(ind)’. The downgrade reflects the ongoing delay in the completion of asset sales, and its impact on Unitech’s ability to service its short-term debt obligation, according to Fitch. On December 11, Singapore-based securities broking group Kim Eng came out with a report on Indian realty in which it mentioned that Unitech has to raise Rs 1,800 crore over the next three to four weeks to stay afloat. Meanwhile, Unitech’s Gurgaon hotel deal may get delayed over the valuation. While Unitech has been expecting a valuation of Rs 270 crore, the potential buyers — four businessmen who separately run Dilbagh, Vimal, Pan Bahar and Rajshree gutkha companies — are not willing to pay more than Rs 210 crore, said a person who is leading the discussions. While hotel chains like ITC and Accor have also evinced interest, a source said Unitech will have to considerably lower its asking price for a deal to go through with the hotel companies. A Unitech executive said the deal may not go through as the gutkha players lack funds to back the deal. ased realty company, is planning to raise $300-500 million.

SEBI asks Pyramid promoter to make open offer at Rs 250 or more

According to Sebi, Mr Saminathan crossed the creeping acquisition limits by acquiring company’s shares in the period between June and December 2008. Shareholders of the company would definitely rejoice, as the stock is currently trading at Rs 75.40, much below the proposed open offer price. Interestingly, it appears that a section of market players had an inkling of such a development, as the stock price has already doubled since the start of the current month. The stock that closed at Rs 75.40 on Friday was trading around Rs 38 on December 1. SEBI, in its order dated December 19, noted that Mr Saminathan acquired 4.89% shares during June 2008 at Rs 250 per share and again in the period between November 19 and December 5, 2008, he acquired 6.91 lakh shares from the market. “By making these market purchases, it is clearly observed that you have crossed the creeping acquisition limits and triggered public announcement for open offer,” says the Sebi order. The market regulator has ordered Mr Saminathan to “file prospectus for public announcement for open offer and acquiring further 20% of the shareholding within 14 days” at Rs 250 per share. In its order, Sebi has also questioned Mr Saminathan about reports (in October 2008) that he intended to acquire a further 25% stake in the company from other two promoters — NC Ravichandran and Nirmal Kotecha — for around Rs 150 crore at Rs 200 per share, when the market price was only Rs 60. SEBI asks Pyramid promoter to make open offer at Rs 250 or more.

Stimulus package to rely on rate cut

The slight rise in credit to industry by banks in the fortnight ending December 5, reversing a sustained decline through November, has given government managers the hope of a revival in the industrial sector. According to RBI data, non-food credit to industry has turned positive at Rs 7,560 crore for the fortnight ended December 5 after turning to a negative of Rs 9 crore in the previous fortnight.

RIL gets Rs 2.8-cr US grant for liquid fuel project

Reliance Industries has received a grant of $600,000 (less than Rs 3 crore) for its proposed coal-to-liquid fuel project. The domestic petrochemicals giant is contributing $3,91,305 (less than Rs 2 crore) to fund the feasibility study for the project while another US company Headwaters is also putting in $1,20,000. The grant has been provided by the US Trade and Development Agency (USTDA) and has been disclosed in the ‘2008 National Export Strategy’ report from the US government’s Trade Promotion Coordinating Committee (TPCC). The grant to RIL is to “partially fund a feasibility study for a lignite/petroleum

Pressure mounts on govt for another fuel price cut

The SP MPs wanted foreign minister and leader of the House Pranab Mukherjee, who pointedly busied himself with some papers, to respond. While Mukherjee wore a bemused look, the SP MPs, with the obvious support of other sections of the House, clamoured that the government make a statement. The House met again soon after, but it is clear that political pressure is beginning to mount on the government to go in for another fuel price cut with the international price of crude down. Congress MPs said the demand for lower fuel prices was reasonable and would provide direct relief to a large section of consumers from urbanites to farmers. Asked whether the demand for a fuel cut could gather steam as polls approached, Congress MPs said they did not feel the government should wait much longer. "We would like a reduction right away. A drop in price of diesel will help bring down transport costs and the price of vegetables. It will help farmers who run pump sets," said an MP.

Satyam top honchos were selling shares from April

The management of Satyam Computer Services Ltd, which has been having a tough time explaining the motive for the aborted $1.6-billion acquisition of Maytas Infra and Maytas Properties, will probably find it more difficult to explain the offloading of the company’s 6.01 lakh shares by its top management this financial year. To add to its woes, market regulator Securities and Exchange Board of India is studying the corporate governance issue concerning the Maytas deal.