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10THE ECONOMIC TIMES | MUMBAI | THURSDAY | 26 SEPTEMBER 2013 *Companies

ARIJ IT BAR MAN & SABA RINA TH MMUMBAI

Close on the heels of sellingtwo of its Gujarat cementunits to Aditya BirlaGroups UltraTech, Jaypee Group

the owners of Indias most in-debted cement maker has final-ised its next round of divestments.

The group flagship JaiprakashAssociates (JAL) has now short-listed its two cement units in Hi-machal Pradesh to be put on theblock and has already initiateddialogues with their potentialsuitors, said multiple sources in-volved. These asset sales areaimed to further trim its groupdebt from the already stretchedbalance sheet.

Jaiprakash is the third-largestcement player in the country witha 27.8 million tonnes (MT) per an-num capacity. Its Himachal unitsinclude a 2 MT cement plant andanother 2 MT grinding unit, bothin the Solan district. Jaypee Hima-chal Cement Grinding & BlendingPlant was commissioned in 2010and enjoys excise benefits.

As reported by ET in its Septem-ber 9 edition, the groups powerarm Jaiprakash Power Venturesis also in advanced negotiationsto sell two of its hydro projects in

the state for $2 billion to AbuDhabi utility company TAQA.Company officials say that theyexpect the deal to close withinthe next one month.

Preliminary discussions havebegun with a few global and localcement players who are eitherkeen to enter or expand theirnorth India footprint. Similar tothe Gujarat transaction, feelershave also been sent to IrelandsCRH. This is surprising, especial-ly since its earlier negotiationswith JAL didnt end well. Its bind-ing offer perceived by many tobe more aggressive was re-buffed in favour of the Birlas.

However, the Irish building ma-terials giant went on to acquireJayajothi Cements in south Indiafor . 1,400 crore last month byteaming up with its Indian part-ner My Home Industries. This ce-mented its India presence furtherto 8 million tonnes per annum.

Several bulge-bracket PE play-ers including KKR with exist-ing cement makers like Dalmia intheir portfolio have also beentapped for a buyout. After a year-long negotiation, Jaypee has fi-nally closed a transaction. So,now work on the Himachal assetsales is gathering momentum.This should also be a . 3,000-crore

plus (enterprise value) trade. On-ly large players will have the appe-tite, said an investment bankerfamiliar with the ongoing nego-tiations. However, to maximisesynergies with the operatingmanagement team, distributionnetwork and branding, I feel theinterest from cement makers willbe more than PE, he added.

When contacted, Jaypee Groupspokesperson Askari Zaidi re-fused to comment on specific de-tails. As our chairman, Manoj

Gaur had told media recently, wewill try to reduce debt by . 15,000crore in this fiscal. Since thegroup has a number of assets indifferent sectors, it is not possibleto give you the name of any partic-ular project, he said.

Mails sent to CRH did not gener-ate a response till the time of go-ing to press.

An Aditya Birla Group spokesper-son said the company would notcomment on market speculation.

The cash-strapped diversified in-

frastructure conglomerate is inthe process of paring its consoli-dated group debt, which has bal-looned to . 64,000 crore as per re-cent estimates by foreign brokingfirm Credit Suisse. As per Bloom-berg calculations, Jaiprakash As-sociates is the second-most lever-aged Asian constructionmaterials company after ChinaNational Building Material Co.The group, on its part, says the cur-rent debt is . 56,000 crore with JAL

the construction, cement andengineering arm being the mostindebted at . 23,000 crore.

Earlier this month, UltraTech fi-nally agreed to buy JALs Gujaratplants for an enterprise value of . 3,800 crore. This helped JAL,which has also built Indias onlyFormula One race track, cut itsliabilities by 15%.

The UltraTech transaction translating into a valuation of $124 per tonne has already set abenchmark. This was nearly half the $230 per tonne that BaringsPrivate Equity Asia had paid forbuying a 14% stake in Lafarge In-dia for . 1,400 crore, but compara-ble to the $133 per tonne that Am-buja Cements is estimated to bepaying for a stake in ACC.

arijit.barman@timesgroup.com

Jaypee to Sell 2 More Cement UnitsAfter agreeing to sell 2 Gujarat plants to UltraTech earlier this month, co has initiated talks to sell two units in Himachal

Pact with Etihad not toOverride Jet Board PowersNEW DELHIJet Airways and Etihad have sub-mitted revised documents to the governmentseeking to allay the FIPBs concerns over con-trol of their proposed venture, saying the com-mercial co-operation agreement (CCA) will notoverride powers vested with the company'sboard. We confirm that the CCA will not under-mine the powers of the board of the companyat any time to enter/exit from such commercialarrangement, according to a joint note sub-mitted by Jet Airways and Etihad Airways tothe Department of Economic Affairs (DEA). Na-resh Goyal-led Jet has also changed the share-holders agreement and amended the in-vestment agreement and the articles ofassociation, as suggested by FIPB.

Airline JV to Create Jobs,Boost Sector: Tata-SIANEW DELHIMaking a strong case for approvalof their proposed airline JV, Tatas and Singa-pore Airlines have said that the venture wouldcreate significant job opportunities in Indiaand would boost the country's image as an in-ternational investment destination. The twopartners have also listed out a number of othereconomic benefits for the country from theirnew venture, Tata SIA Airlines, where TataSons would hold 51% stake and Singapore Air-lines (SIA) 49%. The brand SIA is recognisedworldwide and the expansion of the SIA in In-dia will signal the ability of the country to at-tract leading names from the international cir-cuit to benefit Indian market and customers.

SpiceJet Shortlists FiveCandidates for CEOs PostCHENNAIKalanithi Maran-owned budget car-rier SpiceJet has shortlisted five candidates

for the chief executive officer's post followingthe resignation of Neil Mills. Five candidateshave been shortlisted for the post of CEO andMills' position would be filled soon, SL Na-rayanan, Sun Group CFO, said on Wednesdayon the sidelines of the companys annual gen-eral meeting here. The airline had informed theBSE in August that Mills resignation was ac-cepted by the board of directors. Replying toshareholder queries on the impact of Tata's tie-up with AirAsia and Singapore Airlines, Na-rayanan said, We emerged strong in the re-cent years and the competition will bring outthe best in the company. We are prepared andwe will give a strong fight.

Oberoi Realty Promoterto Sell Shares Via OFSNEW DELHIOberoi Realty on Wednesday saidits promoters will sell 1.14 crore shares onThursday at . 158 per share through stock ex-changes to meet market regulator Sebi's guide-lines on minimum public shareholding norm.

The sale is expected to fetch over . 180 crore tothe promoters if it is fully subscribed. In a filingto the BSE, the Mumbai-based developer saidthat its CMD and promoter Vikas Oberoi willsell 11,441,069 shares through offer for sale(OFS), representing 3.49% of the total paid-upshare capital of the company. The floor pricefor the sale would be . 158 per equity share ofthe company, which is lower than the currentmarket price. The company's share price closedat . 166.85 apiece on BSE, down by 1.65% fromprevious closing.

Bayer Fixes Record Datefor Share BuybackNEW DELHIAgro-chem firm Bayer Crop-Science on Wednesdaysaid it has fixed October8as the record date for the buy-back of 28.8lakh shares of the company for . 455 crore.Board of the company at its meeting hel d onSeptember 25, has approved October 08,2013 to be the record date for determiningthe entitlement and the names of the equity

shareholders, it said in a BSE filing. The com-pany has fixed a record date to see who theshareholders or holders of record are andwhom the letter of offer and tender form willbe sent and will be eligible to participate in thebuyback. The maximum number of equityshares proposed to be bought back represents7.29% of the total number of shares in thepaid-up share capital of the company.

In a Nutshell

OUR BUREAUNEW DELHI

The Board of Control for Cricket in Indiaon Wednesday formally expelled formerIPL chairman-cum-commissioner LalitModi on charges of financial irregulari-ties, indiscipline and actions detrimental

to the interest of the BCCI.But many BCCI insiders ET spoke to saidthe unofficial reason was a far greater mo-tivation. That reason being the apprehen-sion on the part of the BCCI brass that hadLalit Modi not been formally expelled, apossible change in balance in national pow-er politics could have brought him back inthe reckoning.

No senior BCCI functionary was willingto speak on record about the Lalit Modi is-sue. The formal expulsion at the specialgeneral meeting followed a July report by aBCCI disciplinary committee that includ-ed Arun Jaitley and Jyotiraditya Scindia.Earlier in the day, Modis last bid to stay theBCCI SGM failed when the Supreme Courtrefused to entertain his plea.

He shall forfeit all his rights and privileg-es as administrator. He shall not in futurebe entitled to hold any position or office, orbe admitted in any committee or be anymember or associate member of theBoard, BCCI said in a statement.

This effort to ensure that Modi remainsoutside BCCI permanently is partly onaccount of the possibility of a regimechange in Rajasthan, a senior BCCI mem-ber said on the condition of anonymity.If Modi gets into Rajasthan Cricket As-sociation, then hes back in Indian crick-et, the member said.

Like in politics, there are no permanent

enemies in BCCI either, he said. Modi, thismember said, is known to be close to for-mer chief minister of Rajasthan, Vasund-hara Raje, through whom he had made anentry into the Rajasthan Cricket Associ-ation back in 2005. Modi later entered theBCCI and conceived the IPL.

There is a strong possibility that shecould come back to power in Rajasthan lat-er this year, and that could be Modis reen-try ticket, the BCCI official said.

Another BCCI official, who also did not

wish to be identified, said another consid-eration was the possibility of a regimechange nationally next year.

The official said that in the event of aBJP-led government at the Centre, Modischances of making it back to BCCI top ta-ble would have been high the expulsionmakes a comeback difficult even with a re-gime change.

The official said influential BJP leaderand cricket administrator Arun Jaitleyhas never been impressed by Modi, butModi has other supporters in the BJP.

Modi is a strong entity himself. Hes gotthe money. He is known to take on people,says a former BCCI official.

Modi himself, as usual, was free with

quotes and quips. After the ban by BCCI, hetold Times Now from London that Now allthe secrets will come out. Until now I waspart of BCCI and everybody was a freind,but now I wont leave anyone.

I am not going to disappear. I am going tofight it out legally as there is no option left. Iwill fight each one of the BCCI members in-dividually and get to the grass-root level. Iwill target each cricket association indi-vidually, he told the news channel.

He said: BCCI is favouring N Srinivasan(BCCI president) when every cricket lover,entire nation knows that he (Srinivasan)needs to go. Rahul Mehra, a lawyer whocritiques sports management in India, saidall BCCI functionaries, not just Modi, werepart of the IPL governing council between2008 and 2010 when Lalit Modi was commis-sioner of IPL. They found a scapegoat inModi, Mehra said.

Modi was the IPL chairman-cum-com-missioner for its first three editions, butwas suspended in 2010 on charges of finan-cial irregularities in running the league.

He was also charged with following im-proper practices in the auction of two newfranchises Pune and Kochi.

The disciplinary committee of BCCIstarted proceedings against Modi in July2010. This was conducted over two yearsthrough several hearings, though Modi at-tended no session in person.

Modis Expulsion Today Relatedto Political Fortunes Tomorrow BCCI shows former IPLchairman Lalit Modi thedoor citing financialirregularities, indiscipline

OUR BUREAUHYDERABAD

A CBI court has asked the Indian cricketboards chairman and India Cements ma-naging director N Srinivasan to appear be-fore it on November 1 in relation to a cor-ruption probe involving the son of AndhraPradeshs late chief minister YS Rajasekh-ara Reddy. The agency had named Sriniva-san as an accused in the investigation, al-leging that he invested about . 140 crore invarious businesses of YS Jagan MohanReddy in return for favours.

The court has also served notices to other

accused, including senior AP bureaucratswho allegedly issued government orders al-lotting land, water and limestone mines infavour of India Cements. The investigatingagency, which questioned Srinivasan a cou-ple of times last year, charged India Ce-ments with criminal conspi racy, cheatingand falsification of accounts, among otherthings, in its first information report.

The prime accused in the case, Jagan Mo-han Reddy, who represents Kadapa in the LokSabha and is the president of YSR Congress,was released on bail on Tuesday after 16months in jail. Reddy and his family auditor,V Vijai Sai Reddy, were also served notices.

CBI Court Summons India Cements Chief

Half a year afterRussian conglomer-ate Sistema JFSCsIndian unit Sistema

Shyam Teleservices won back airwavesin the 800 Mhz frequency band for eightcircles, the companys global financechief Vsevolod Rozanov has warnedthat foreign investment will not flow inuntil the government creates a levelplaying field and brings a policy to pro-mote consolidation. In an interview withETs Anandita Singh Mankotia , Rosanovwarns that if sectoral anomalies arentcorrected, it would jeopardise the com-panys investment of $3.6 billion till date.

What is your view on regulatorssuggestion that there should be noauction of 800 Mhz band due to lowdemand?We were taken aback by the regulatorsdecision. We participated in the Marchauctions on the premise that there willbe roadmap and continuity for expan-sion of CDMA technology, but receivedarude shock. We only hope telecom de-partment understands our perspectiveand provides continuity for our expan-sion. We had to shrink in geography be-cause the price was exorbitant.

If the government goes ahead with(sector regulator) Trais proposal,will you challenge it in court?At this point, I can only say that I hope800 Mhz is treated at par wi th 1800Mhz. As a foreign investor, we donthave the ability to fight and use thetricks which domestic operators can.We can only ask the government toprotect and support us. Before esca-lating this issue to higher levels, wewant to resolve this amicably. But, ifthings do turn out to be unfavourable,it makes sense to wind up rather thanfight a court case for 5 to 10 years.

The government has permitted100% FDI. Will Sistema buy out its

minority partner or up its stake inthe company?Firstly, our till date investments needto be respected. Despite six monthspast the March auctions, we stillhavent received the third carrier wehad won. It is frustrating, but we aregiven to understand that wi nners ofthe November auction havent re-ceived their airwaves either. Eachtime we meet government officials, weare assured that spectrum will be allot-ted in the next two to three weeks, butnow it is more than six months. There isnopoint in buying anyone out in sucharegulatory environment.

Is Sistema looking to consolidate inthe telecom market?The first task for the management is tobecome positive cash flow by the firsthalf of 2015. Moving into another tech-nology will mean additional investmentof $1-2 billion. Only after that can we talkabout the future.

So, will you participate in the 800Mhz spectrum auctions if they wereheld?If the Trais proposal of reducing thefloor price of spectrum were extendedto 800 Mhz, it makes absolute sense forus to invest in the market.

If Things Dont Work Out, WeWill Wind Up

Q& A

Sistemas global finance chief Rozanov saysIndia has to create a level playing field

As a foreign investor, wedont have the ability tofight and use the trickswhich domestic operatorscan. We can only ask thegovernment to protectand support us. Beforeescalating this issue tohigher levels, we want toresolve this amicably

VSEVOLOD ROZANOVGlobal Finance Chief,Sistema JFSC

OUR BUREAUNEW DELHI

Indian mobile phone users will beable to keep the same number whentheyre moving to a different stateby April as the telecom regulator onWednesday mandated mobilephone companies to implement fullmobile number portability withinsix months.

The Telecom Regulatory Author-ity of India (Trais) move will cometo the aid of millions of mobilephone users who have to purchasenew numbers while moving to an-other state.

Mobile number portability (MNP)allows a subscriber to retain hismobile telephone number when hemoves from one service provider toanothe r. Present ly, MNP is restrict-ed within a service area. For exam-ple, a Bharti Airtel subscriber fromAndhra Pradesh circle can port hismobile number to Idea Cellularwithin Andhra Pradesh only.

If this subscriber moves to anoth-er circle, for instance, Delhi, heneeds to acquire a separate Delhimobile number, else pay roamingcharges, which are higher than theaverage call tariff. India has 22 ser-vice areas or circles.

Pan-India MNP will allow thissubscriber to move to any other cir-cle like Delhi or Maharashtra, get anew service provider withoutchanging his mobile number and,hence, not pay roaming charges.

Full MNP will present an opportu-nity for leading mobile phone com-

panies like Idea Cellular, BhartiAirtel and Vodafone that have bene-fitted from circle-level MNP in thepast. The government allowedMNP within the same circle in Ja-nuary 2011. Till June this year,more than 93.5 million customershad requested to move to a new ser-vice provider, Trai data revealed.

The service is provided to all car-riers by SyniverseTechnologies andMNP Interconnec-tion Telecom Solu-tions.

Mahesh Uppal, di-rector at Com First(India), a consultan-cy dealing in telecomregulatory affairsadded that smallerplayers are likely totake up this chanceto acquire corporatecustomers that bringin more revenue.

Trai has finalised amethod for process-

ing cross-circle porting requests af-ter holding consultations with theindustry. Accordingly, a ca rrier thatreceives a porting request from a cir-cle, for instance, Delhi, it forwards itto the MNP provider that overseesthis circle. Future porting requestsof this number that may be within acircle or to another circle will behandled by the same MNP provider.

Under this approach, no intercon-nection between the MNP provid-ers is required, leading to minimalcosts for installing this system.

Get Full Mobile NumberPortability by April

Move willcome to theaid ofmillions ofmobile phoneusers whohave topurchase newnumberswhile movingto anotherstate

INDU NANDAKUMARBANGALORE

Indias software export sector is hop-ing that Prime Minister ManmohanSingh will forcefully argue their casefor an easy visa regime when he meetsUS President Barack Obama on Fri-day. The Indian information tech-nology industry has been steadilybuilding up opinion against a pro-posed US law which makes work visas

costlier and harder to come by. WhenSingh raises the issue with the Amer-ican president, it will be a clear reflec-tion of the importance that the Indiangovernment attaches to a sectorwhich earns more than $76 billion( . 4.7 lakh crore) in export revenue,60% of it from the US.

We have been talking to US law-makers and multiple viewpoints sug-gest that restrictive clauses in the bill

must be removed, said Som Mittal,president of the software industrybody Nasscom.

I hope the Prime Minister would tellthem that we have done our bit, so itstheir turn to do something, Mittal said.In the recent past, India has taken a fewpolicy measures intended to benefitAmerican corporations working here.

Among them are simplifying rules thatgovern transfer pricing agreements be-tween US corporations and their Indiaunits an area that has become highlylitigious following tax demands by Indi-an authorities. The government has alsoput on hold a preferential market ac-cess policy that calls for a majority of telecom equipment sold in India to bemanufactured here.

While companies such as Tata Con-sultancy Services, Infosys and Wipro

are loathe to discuss the sensitive is-sue in public, they are working behindthe scenes to ensure that the envi-ronment for doing business in the USdoes not get any tougher.

Last month, Azim Premji, chairmanof Indias third-largest IT servicescompany Wipro, had written to the PMasking him to seek the White House in-tervention in removing some of thediscriminatory proposals in the bill.

Premji said the immigration billwould play a critical role in the Indo-US trade relations.

The comprehensive immigration re-form bill, passed by the US Senate andbeing debated by the House of Repre-sentatives, is primarily aimed at giv-ing citizenship to nearly 11 millionundocumented immigrants in the US.But it also has restrictive visa provi-sions that could put Indian tech-

nology services com-panies at adisadvantage againsttheir US-based coun-terparts such as IBM,HP or Accenture.

According to theSenate version of thebill passed in June,companies that have

over 75% of their USworkforce relying onH-1B or L-1 visaswould be bannedfrom getting any

more visas by 2015. The bill also de-mands that these companies bringdown their visa-dependent work-force to 50% by 2017, a move that wil lresult in higher costs for Indian soft-ware firms as they will be forced to

hire local employees in the US. Indi-an IT companies argue that the USdoes not have sufficient skilled engi-neering talent.

The unemployment rate in the US hasfallen from over 10% in 2009 to 7.3% inAugust 2013. But in the informationtechnology sector, it is below the 4% lev-el regarded as full employment.

The top four Indian outsourcers Tata Consultancy Serivices, Infosys,Wipro and HCL Technologies to-gether employ over 35,000 softwareengineers in the US, with many of them being Indians working at on-site client locations.

At 64%, Indians made up the largestproportion of temporary workers en-tering the US on H-1B visas last year.Analysts in Washington DC said theydo not expect the Obama-Singh meet-

ing to be game-changer as a final de-cision will be taken by members of the US House of Representatives lat-er this ye ar. This meeting will beabout the two economies; moreoverObama has so far taken a hands-off ap-proach on this immigration bill, saidNeil G Ruiz, of the DC-based think-tank The Brookings Institution.

indu.nandakumar@timesgroup.com

IT Cos Expect PM to Take up Visa Issue with ObamaA proposed US law wouldmake visas costlier andhard to come by forIndian IT professionals

Theimmigrationreform bill,passed by theUS Senate isprimarilyaimed atgiving

citizenship tonearly 11 mimmigrants inthe US

ON A MISSION