Andhranews

Hyderabad, Sept. 4: Dr Reddy’s Laboratories Ltd, the second-largest pharmaceuticals company in India, is reportedly scouting for acquisitions in the regulated markets of North America and the Europe, and is believed to be raising a war chest estimated at $300 million to fund the acquisition. The route for raising the money is stated to be through American Depository Receipts. When contacted, a senior Dr Reddy’s executive said on Monday, “We are not confirming or even talking about this at this point.”

Dr Reddy’s had raised $132 million through its ADR issue in the US in April 2001, and its ADS’ are listed on the New York Stock Exchange. Merril Lynch had managed the ADR issue. According to sources, Dr Reddy’s is believed to be looking at potential acquisition targets in the United States, where it has a large research facility, and in the European Union.

Dr Reddy’s, which launched the “authorised” generic versions of Merck’s Zocor and Proscar in the US in June, has been on an acquisition drive in the past one year. The company acquired Roche’s active pharmaceutical ingredients (bulk drugs) business in Mexico for $59 million in November last year, and followed it up with the acquisition of betapharm, the fourth largest generic drug manufacturer in Germany, for $570 million in February this, the single largest overseas acquisition by an Indian pharmaceuticals company.

“The betapharm acquisition was funded through debt,” the senior Dr Reddy’s executive said. The reported new ADR issue is, therefore, expected to be bankroll the acquisition plan. What gives credence to a likelihood of an acquisition in the US is that Dr Reddy’s presence in the world’s largest drug market is through its generic drugs business, and through the custom pharmaceuticals services offered by its operations in Mexico.

The company acquired a small firm specialising in dermatology products in the US. A possible acquisition in the US would give the company a stronger foothold there, according to industry analysts. The “authorised” generic versions of Zocor (simvastatin), a cholesterol-lowering drug, and Proscar (finasteride), indicated for the treatment of prostate problems, generated substantial revenues, contributing Rs 334.6 crores of the Rs 1,400-crore revenues in the first quarter of 2006-07. “Both simvastatin and finasteride are continuing to do well in the US,” the executive said, declining to elaborate.

Mumbai, Sept. 4: The Aditya Birla group announced on Monday that it has reached an agreement with Hubei Jing Wei Chemical Fibre Company in China — a 30,000 tpa VSF manufacturer quartered in the Hubei Province of China — to form a joint venture company that would double the VSF capacity from 30,000 tonnes per annum to 60,000 tpa by December next year. The total investment is estimated at $70 million. This will enable the group, which is already in a leadership position, to grow even further globally in the VSF sector, said Mr Kumar Mangalam Birla, chairman of the group.

Releasing details of the joint venture, the company said that the Aditya Birla Group, through its cellulosic fibre companies, namely Grasim Industries Limited, Thai Rayon Public Company Limited and P.T. Indo Bharat Rayon, Indonesia and Hubei Jing Wei will form a joint venture company (JV) — “Birla Jingwei Fibres Company Limited” — that will acquire the existing assets of Jing

Wei. The Aditya Birla Group will have a majority stake of 70 per cent in the new JV of which Grasim Industries Limited will have a stake of a little over 30 per cent. This JV will further enhance the global revenues of the group which today accounts for 30 per cent of the total revenues. Mr Birla said, “Our intent is to grow even further globally in this (VSF) sector.

Our new JV, in which we have made a strategic investment, marks a major milestone in China. The Asian and Chinese markets offer enormous potential for commodity and speciality fibres, in both of which our group has a strong foundation.” This JV will be the second JV the Aditya Birla group has entered in China.

Hyderabad, Sept. 4: The FM space looks set to see some “big” competition as Adlabs Radio, a part of the Anil Dhirubhai Ambani Group, launches its service in 45 cities, beginning with Hyderabad later this month. Adlabs Radio will be investing Rs 400 crores in the FM push, Mr Tarul Katial, CEO of Adlabs Radio, told this newspaper here on Monday.

The company’s FM is called Big 92.7 FM, and the frequency would be the same across the country, Mr Katial said. Big 92.7 will be taking a bow in Hyderabad in the third week of September. “The Hyderabad station will feature a mix of Telugu and Hindi music, aimed at a young adult audience. We will also be playing music in the English language, but it will be only a small portion,” Mr Katial said.

According to Mr Katial, the Hyderabad launch will be followed by Big 92.7 FM going to cities in Southern and western India, and then the rest of the country. “Adlabs Radio has 45 radio licences, and in Andhra Pradesh, we will be launching stations in Visakhapatnam, Tirupati and Rajahmundry,” he said. Asked whether Adlabs was a late entrant into the FM space, which has some established players, Mr Katial said, “There is room for growth, and our 24-hour programming will be different from the others. Over 40 per cent of the programming will be exclusive to Big 92.7 FM,” he said. The FM station will also have talk shows.

Mr Katial said Adlabs Films Ltd, in which Reliance Capital of ADAG has a majority stake, will be launching FM stations in northeastern states, including Assam and Gujarat, Maharashtra and Karnataka. “Radio is now the fastest-growing medium in India, and we see substantial opportunity in this space,” he said.

Mumbai, Sept. 4: The boards of the Centurion Bank of Punjab Limited and the Lord Krishna Bank Limited on Monday approved the merger of the two banks to create a strong private sector banking entity with pan-India footprint. The share swap ratio has also been fixed at 5:7, i.e. for every 5 shares of Lord Krishna Bank, its shareholders will receive 7 shares of Centurion Bank of Punjab.

“Post-merger, the combined entity will emerge as one of the dominant players in Kerala and would build upon the inherent strengths of Lord Krishna Bank,” said Mr Shailendra Bhandari, managing director and chief executive officer, Centurion Bank of Punjab. The board of directors of Centurion Bank of Punjab also approved a proposal to raise additional capital through a preferential issue of fresh equity, which is still subject to shareholder, regulatory and statutory approvals.

The proposed issue will be upto 75 million fully paid up equity shares at a price of Rs 24.54 per equity share for a consideration of upto Rs 1,840.5 million to India Advantage Fund V. “The proposed merger with Lord Krishna Bank firmly establishes Centurion Bank of Punjab’s role as an industry consolidator. The merger of both the banks has been an unqualified success, and we are confident that the proposed merger will accelerate the bank’s growth momentum and help it move towards becoming the best full-service bank in the country,” said Mr Rana Talwar, chairman, Centurion Bank of Punjab.

New Delhi, Sept. 4: The government on Monday said that it will take a view on the various suggestions received regarding the participatory notes (PNs) in due course. An official note from the finance ministry said that for the time being, “status quo” on the policy for PNs will continue.

The Tarapore Committee on Fuller Capital Account Convertibility (FCAC), appointed by the RBI at the request of the Government of India, has recently given its report. On the issue of PNs, the report said the majority view is that fresh issue of PNs should be disallowed and existing PNs be phased out in one year.

There is a strong buzz going around in the government circles that the government will not go along with the Tarapore panel’s recommendations on prohibition of participatory notes. Also, two of the six members of the Tarapore committee, namely Mr A.V. Rajwade and Mr Surjit S. Bhalla have given a dissenting opinion on this recommendation.

Earlier, the expert group on encouraging FII flows while reducing the vulnerability of the financial system to the flow of speculative capital, chaired by Dr Ashok K. Lahiri, had submitted the report to the government in November last year. The majority view of the expert group was that the current dispensation for participatory notes may continue.

The majority view also stated that the Sebi should have full powers to obtain information regarding the final beneficiary or any holder in case of any investigation or surveillance action. However, the RBI representative in the expert group had given a dissenting opinion.

Chennai, Sept. 4: President A.P.J. Abdul Kalam on Monday said the banking industry should continue to focus on rural development in a major way to uplift the rural population. “Banking should reach to 70 per cent of the rural population. It is essential for the economic development of the rural areas, especially for the upliftment of women,” the President said, while inaugurating the centenary celebrations of the state-owned Indian Bank here.

Praising the staff and the management of Indian Bank, he said the turnaround of the Indian Bank was the “result of the total commitment from the staff and management.” The President said the bank’s dedication to become a common man’s bank is a good example to follow. He suggested the bank should expand its operations further in India and abroad.

Announcing the plans for the centenary year, Mr K.C. Chakrabarty, Indian Bank’s chairman and managing director, said they would continue to focus on rural development and financial inclusion of households in selected areas and would leverage the technology to enhance customer satisfaction. The CMD said the bank is implementing a pilot project of financial inclusion in Pondicherry, in which the entire household would enjoy banking facilities, access to insurance products and have a capital market product. The bank would replicate this model in other parts of the country, he added.

Finance minister P. Chidambaram said the public sector banks were taking major role in the development of the economy. He said PSU banks have a total deposit of Rs 1,619,478 crores and advance of Rs 1,094,180 crores in the last fiscal. Of this, the banks have provided Rs 21,835 crores in advance to farming, Rs 1,515,40 crores for SSI and Rs 10,005 crores for education.

New Delhi, Sept. 4: Spice Telecommunications on Monday unveiled its plans to invest $2.5 billion to expand its operations in all 21 circles of the country. Presently, Spice only operates in the Punjab and Karnataka circles. But it has applied for a licence to start its operations in all the 21 circles of the country. For that, the company has planned an initial investment of $2 billion and plans to invest another $500 million for its existing operations.

Malaysian telecom company Telekom Malaysia (TM) has a 49 per cent share in Spice Communications, the rest being with MCorp Global. To put its growth plan on a fast-track mode, the company is planning to go in for an early listing. The company may go for the IPO in two phases. The first IPO would be in by the end of this year.

“We are planning to raise between $250-300 million from the first IPO,” said Mr Dilip Modi, vice-chairman, Spice Communications. The company has decided on 20 per cent dilution for the first IPO. The second IPO would be in December 2008. Spice is hoping to generate $350 million from the second IPO. The advisors for the IPO plan have been finalised as Enam Securities, Deutsche Bank and JP Morgan. This will help in achieving the twin advantages of strengthening the present operations and supporting the new entry strategy.

Mumbai, Sept. 4: Leading private sector bank ICICI Bank on Monday made a bid to acquire ailing United Western Bank (UWB), but Maharashtra government stepped in with a proposal to fund the restructuring of the regional bank located in the politically-influential sugar belt of Satara.

Besides ICICI Bank, Canara Bank, Federal Bank, Andhra Bank, Stanchart and NBFC Balaji Group approached Reserve Bank of India to takeover UWB, which has been put on moratorium till December 1 after it posted losses. However, UWB’s board of directors met on Monday and resolved to prepare a reconstruction proposal to maintain the independent identity of the bank.

The Maharashtra government is keen on the rural bank, located in the sugar-belt of the State that exercises considerable political influence, retaining its identity. The government has asked State Industrial Inv-estment Corporation of Maharashtra (Sicom) to fund the revamp plan. When contacted, Maharashtra industries minister Ashok Chavan said the government was awaiting Sicom’s reply on the matter.

Inefficient management led to the erosion of networth of UWB and it was placed under moratorium till December 1 or an earlier date as the management did not come up with any plan to infuse fresh capital. RBI is looking for a merger of the bank with another bank, which has better synergy. As UWB has 230 branches, 12 extension counters and 75 ATMs, many banks have queued up to acquire the bank as it will give them a huge presence in western India and a ready-made infrastructure.

ICICI Bank believes that UWB’s network of branches and extension counters can be leveraged to grow its rural and SME banking operations in particular, and overall distribution franchise in general. Earlier in the day Andhra Bank informed the BSE that its board of directors, in a meeting, approved the proposal for submission of Expression of Interest (EoI) to the RBI for the merger of UWB with itself.

Meanwhile, huge selling pressure was seen in UWB stock on Monday, with share price plunging over 75 per cent. Its share price dropped to as low as Rs 5.25 early in the morning trade on the NSE, representing a drop of 77 per cent from the previous close of Rs 22.70. On the BSE, the share price dropped to as low as Rs 10, a fall of over 55 per cent from Friday’s close of Rs 22.55.

New Delhi, Sept. 4: Monopolies and Restrictive Trade Practices Commission (MRTPC) issued a notice to Maruti Udyog Ltd on Monday over a complaint by Hyundai Motors against a sales advertisement of the car maker. Accepting the Hyundai petition filed on Friday, MRTPC asked Maruti to send its reply within two weeks.

The matter has been listed for further hearing on September 27. The two car makers have come face to face after Hyundai challenged a sales pitch of Maruti in its latest advertisement campaign, saying it was ‘misleading and disparaging’. Hyundai had said Maruti was indulging in unfair trade practices and sought relief from MRTPC.

Paris, Sept. 4: The Airbus A380, the world’s largest passenger jet, took off with a full load of passengers for the first time on Monday and the European aircraft maker announced further management changes in the wake of costly delays to the 10 billion euro ($13 billion) super jumbo programme.

Carrying 474 Airbus employees, the 308-tonne jet left from Toulouse, southern France, on the first of four test flights scheduled this week to try out the plane’s cabin environment and systems with passengers on board. Airbus says it is on schedule to deliver the first finished A380 to Singapore Airlines Ltd. by the end of the year, despite the latest wave of costly delays that are expected to hold up subsequent deliveries by about six months. The setback led to the July ouster of Airbus CEO Gustav Humbert as well as Noel Forgeard, joint CEO of Airbus parent European Aeronautic Defence and Space Co.

Monday saw a further management shuffle at Airbus, which named as the new A380 programme head Mario Heinen, the former chief of the single-aisle A320 programme. He replaces Charles Champion, who also steps down from his role as chief operating officer but stays on as an adviser to the new Airbus CEO, Christian Streiff.

Mr Streiff has imposed a temporary hiring freeze at Airbus and is scheduled to report to shareholders by the end of this month on the full extent of the A380 delays, following a detailed audit. With the A380, Airbus has bet heavily on future de-mand for very large planes to fly growing numbers of travellers among the world’s increasingly congested major airports.

In mid-sized, long-range jets — where Boeing Co. sees much more demand — Airbus is about four years behind its US-based rival’s next-generation plane, the 787 Dreamliner, tailored to cover more destinations with more frequent, nonstop services. The A380 can seat 555 people.