weekly news2

8/8/2019 Weekly News2

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By: Kapil Singh Pathania


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Flag Telecom, a part of its internationalnetwork arm Reliance Globalcom, could raiseat least $500 million by selling bonds to

European investors, said a number ofinvestment banking sources.

RCOM has appointed Deutsche Banksinvestment banking arm to spearhead the latestfund-raising effort. If successful, the funds willbe used to meet debt obligations, including$200 million worth of convertible bonds heldby overseas investors, due May 2011


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The company has another $900 million offoreign currency convertible bonds, orFCCBs, maturing February 2012. Thecompany has a current net outstandingdebtwhich rose over 700 crore between

July and September this yearexceeding30,000 crore. Failed attempts to sell assets

The company reported a 40% plunge inprofits in the second quarter of this fiscalto Rs 446 croreits fifth-straight quarter of

profit fall. Reliance Communications acquired Flag

Telecom, the undersea cable business, in2003 for about $207 million. After a recent

restructuring, the companys Indian


4/16

(Pramugdha Mamgain NEW DELHI,SECOND FOREIGN BUY IN 3 MTHS)

DABUR India has bought US-based haircarecompany Namaste Laboratories and its three

subsidiaries for $100 million ( 446 crore) in anall-cash deal as Indian consumer productcompanies continue their global acquisitionspree.

Its second overseas acquisition in less thanthree months will help Dabur enter thefastgrowing $1.5-billion ethnic haircareproduct market in Africa, besides serving as a

gateway to the US market for its products.


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Namastes hair straightening lotions andhair oils are hugely popular with AfricanAmericans in the US and sell well in Africaand Nigeria too,

The acquisition of Hobi Kozmetick andNamaste Laboratories along with ourexisting businesses overseas willcontribute nearly 25% to Daburs

consolidated revenue in 2010-11, DaburIndia group director PD Narang said.Dabur recorded a revenue of Rs 3,400crore in 2009-10 of which 20% came from

sales in international markets.


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CAG says telecom ministry had 'flouted every canonof financial propriety, rules and procedures' .ARajadisregarded advice of PM, who had stressed need for'fair and transparent allocation policy'

He did not follow Trai recommendations, ignored law

ministry's advice & turned down finmin's demandthat EGoM decide spectrum price. He did not take theapproval of Telecom Commission Pan-Indian licenceswere awarded at Rs 1,651 crore each, a price fixed in2001, causing a loss of 1.40 lakh crore to exchequer.

Raja issued licences to ineligible applicants: 85 of 122licences issued in 2008 were illegal as these cos haddisclosed incomplete information, submitted fictitiousdocuments and used fraudulent means to get permits


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Raja's ministry doled out additionalairwaves to existing telcos such as BhartiAirtel, Vodafone Essar, BSNL, among

others, beyond what they were entitled to,causing an additional loss of nearly Rs37,000 crore to the exchequer DoT arbitrarily changed cut-off date for

mobile permits to Sept 25, 2007, resulting inselect Indian companies such as Swan,Unitech, Loop, Datacom and Shyam gettinglicences Losses pegged at Rs 1,76,645 croreA Raja in 2G spectrum allocation scam. The Prime

Minister referred the first two complaints of Swamy forexamination to the concerned official within two days,third complaint within four days, the fourth one in a dayfrom the date of its receiving, said PMO in its 11-pageaffidavit filed by its director, V Vidyavati. According tothe PMO, it had received two more communications


8/16

Enam exits with handsome gains while dealwill pay off for Axis in long term givenstrengths & profitability of investmentbanking & institutional broking units SnapsUp Investment Banking, Institutional & RetailBroking Our Bureau MUMBAI

Axis, led by CEO Shikha Sharma, a formerICICI Bank director, will acquire EnamSecurities key businesses such as investment

banking, institutional and retail broking, anddistribution of financial products in anallstock deal worth 2,067 crore.


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Enam is expected to have a profit after taxof Rs 100 crore for the full year. So, 2,000-odd crore for the full stake looks all right,For the seven months between April 1 andOctober 20, the Enam arm recorded a pre-tax profit of 77 crore against a turnover of182 crore.

With Axis banks distribution platform ofalmost 1,100 branches and Enams retailnetwork, the combined entity will have an

opportunity to build a dominant retailfranchise as well,


10/16

(Bells palsy:Trai annuls 62 licences for

rollout delays) The government to cancel 62 of the 122

licences issued by former telecom minister ARaja under controversial circumstances in2008 to new companies, including joint

ventures of international operators such asTelenor ASA, Emirates TelecommunicationsCorp and Sistema JSFC, because they had notbeen able to launch services in time.

Telecom Regulatory Authority of India

which claims that its views were ignored byMr Rajastrengthen the possibility of severallicences issued in 2008 being revoked.

CAG had slammed the telecom ministry for notrecovering Rs 679 crore as penalty.


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If there are some consequences on our licences, then theIndian regulatory environment will be questioned by allforeign investors. Because, here comes Telenor, a well-known operator with a presence in Asia for 15 years, andit would be very strange if the government were to nowset aside investments from our side after they havealready been made, Telenor Group president & CEO

Jon Fredrik Baksaas had told ETlast week.


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Under new minister Kapil Sibal, decided toseek legal opinion on the validity of the telecomlicences dished out by Mr Raja after the

countrys national auditor said 70% of thesemobile permits were obtained throughfraudulent means, an official aware of thedevelopment told ET.

Comptroller and Auditor General of India, orCAG, in its report on Tuesday said 85 of the 122licences given to six companies, notably Uninor,Videocon, Loop Telecom, S Tel, Etisalat andAllianz Infratech, were illegal as these firms

were not eligible to obtain them. DoT can fine companies Rs 5 lakh a week per

circle for the first 13 weeks of delay. The finegoes up to Rs 10 lakh each for the next 13 weeks,and to Rs 20 lakh for delays up to 26 weeks.


13/16

Rumours of PMs resignation, 2G tangle and Chinahiking reserve ratio precipitate slide

Sentiment turned nervous because of fears

about political instability in addition to fearsabout the impact of events in China,-Sentimentturned nervous because of fears about politicalinstability in addition to fears about the impact ofevents in China,

China raises reserve bar for banks Li YanpingBEIJING MONEY TALK: RESERVE RATIOINCREASED TO 50 BPS TO TAME INFLATION

Rate hike may prove insufficient


14/16

The 30-share Sensex dropped 345.20 points, or1.7%, to 19,585.44. NSEs 50-share Nifty shed 108.50points, or 1.8%, to 5890.30. Losers outnumberedgainers 2289: 695 on BSE. Foreign investors boughtIndian shares worth 367.91 crore on Friday,extending their purchases to 1.30 lakh crore ($28billion) so far this year. Both indices have fallen6.7% in the last two weeks.


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China aims to step up liquidity management andappropriately control credit and loans


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