M&As
IDFC Eyes 35% In GE’s Construction Equipment Biz: Infrastructure Development Finance Company (IDFC) is in negotiations with GE Commercial Finance, GE’s financial arm, to buy about 35% stake in the latter’s construction equipment finance business in India. GE is mulling hiving off its construction equipment finance business into a JV company wherein IDFC will hold about 35% and GE Commercial Finance will hold the remaining 65%. The valuation of the JV is expected to be around Rs 650-800 cr.
Reliance Retail – Wincanton’s JV Called Off: Reliance Retail (RRL) has called off its proposed JV with the UK-based supply chain firm Wincanton. The JV was being formed to manage RRL’s transportation, warehouses and inventory so that stocks reached the stores in time which would have solved the critical problems and glitches in supply chain of Reliance. RRL and Wincanton had signed an MoU and reached an advanced stage of negotiations. The proposed deal was shelved after Wincanton realised that RRL might not be able to meet its initial growth projections and generate expected volumes.
Videocon, HFCL May Part Ways: Videocon and HFCL, the co-promoters of the new telco Datacom may part ways. The two partners are negotiating an out- of- court settlement. Videocon holds 64% in Datacom, and HFCL the rest. Differences between them arose when HFCL raised issues relating to corporate governance highlighting that Videocon was taking the major decisions without consulting the minority partner.
IDBI Bank Scouting For Buyers For Home Loan Arm: IDBI Bank has decided to sell its housing loan arm, IDBI Home Finance (IHFL) against its earlier plan to merge the unit with itself. It may soon invite bids from interested buyers soon. The aim is to consolidate its home loan finance business which is currently being rolled out through the bank's own housing finance division and its wholly owned subsidiary - Pune based IHFL. In another news, the bank has reduced its home and educational loan rates by 0.5% with immediate effect for both the existing and new customers. Home loans will now be available at interest rate of 11%.
Policy
Bar Council Mulls Allowing Entry Of Foreign Law Firms In India: The Bar Council of India (BCI) which had initially opposed the entry of foreign law firms into the country while debating the idea for a whole year, is now considering taking a calibrated approach to allow their entry into India. Foreign law firms in countries including UK, US, New Zealand, Singapore and Australia have expressed interest in entering the Indian legal services sector. BCI is the regulatory body in India that lays down the standards of professional conduct for lawyers and also the standard of legal education.
Interest Earned By Foreign Firm On Convertible Debentures Taxable: The Authority for Advance Rulings (AAR) has ruled that the interest paid to a foreign company on convertible debentures is a part of the foreign company’s income and is liable to be taxed in India. Indian firms raise foreign currency denominated funds in the form of external commercial borrowings (ECBs) or foreign currency convertible bonds (FCCBs). While ECBs are pure loans, FCCBs have an in-built option for the lender to convert them into equity, though both in ECB and FCCB, the borrower is expected to make interest payments.
Capital Markets
Anil Ambani Looks To Raise Promoters' Stake In Rel-Infra: Anil Ambani is looking to increase his stake in Reliance Infrastructure (R-Infra) by about 5% through the newly allowed creeping acquisition route in a bid to increase the promoters’ holding above 50% so that any hostile takeover bids can be warded off easily. The promoters and promoter group firms controlled by him, are expected to buy R-Infra shares in this financial year from the open market. At a price of about Rs 429.65 the transaction will cost them about Rs 500 cr. The scrip has fallen about 45.88% in the last one month due to the global economic slowdown.
Foreign Firms May Be Roped In To Revive Eight Sick Fertilizer Units: The government may rope in foreign companies for investment in eight closed fertiliser units worth a total of Rs 36,000 cr, apart from encouraging the domestic firms for the same. The Cabinet has recently approved the setting up of an Empowered Committee of Secretaries under the chairmanship of Fertiliser Secretary Atul Chaturvedi to come up with possible financial models for the revival of the closed plants at Barauni, Haldia, Talcher, Ramagundam, Durgapur, Gorakhpur, Korba and Sindri.
Others
ICICI Retires Rs 24,000 Cr Expensive Deposits: Defying rumors that it was under financial pressures, ICICI Bank has retired about Rs 24,000 cr expensive deposits in last six months, to reduce cost and improve its bottomline. Simultaneously, they have increased the Current and Savings Account (CASA) deposits by Rs 3,000 cr in this period.
Panasonic Eyes To Buy Sanyo:
Japanese electronics maker Panasonic Corp and two other major stakeholders of Sanyo Electric Co to buy a controlling stake in the latter. Sanyo's three main stakeholders are Daiwa Securities SMBC, Sumitomo Mitsui Banking Corp and Goldman Sachs. The combined entity is set to become Japan's largest electronics maker in terms of revenue, pushing down Hitachi Ltd. Reportedly, the heads of Panasonic and Sanyo have agreed in principle to the deal.