Oil and Natural Gas Corporation, the company that cancelled a five-year contract of rig supply with Great Offshore on Thursday, is planning to issue a new tender. India's largest oil producer cancelled the contract as Mumbai-based Great Offshore could not supply the rig in time.
Tata Motors, India's largest commercial vehicle maker, is in the process of raising Rs 5,000 crore through a bond issue to refinance the remaining $ 2 billion (Rs 10,000 crore) bridge loan it took to acquire Jaguar and Land Rover.
"That plant has a high cost of production and it is not feasible to operate it when aluminium prices have dropped significantly," said a company executive. It has started reducing output and full closure is expected soon. Aluminium prices fell to $1,251 a tonne on the London Metal Exchange from last July's all-time high of $3,271, as the global credit crunch and economic slowdown curbed demand for the base metal. On Wednesday, the metal's LME price was $1,421 a tonne.
Ripples of Indias largest corporate scam along with poor quarterly performance have made more than half of the actively traded companies on the Bombay Stock Exchange (BSE) opt not to disclose their fourth quarter un-audited results this month. Instead, they would announce only their annual audited results, before the end of June.
The National Aluminium Company (Nalco), India's second largest producer of the base metal, avoided a production cut by offering discounts to its key clients that helped it boost sales and trim rising inventory.
Tech Mahindra, the highest bidder for Satyam Computer Services, has tied up Rs 875 crore funding from mutual funds and insurance companies and is in talks with banks to mobilise Rs 1,000 crore bridge loans.
Tata Motors, India's largest commercial vehicle maker, has postponed plans for an overseas equity issue and sale of investments to repay the $3 billion bridge loan it took in June last year to acquire the Jaguar and Land Rover brands from Ford.
The first to pass on the baton will be Tata Motors managing director Ravi Kant. He retires in June, according to the group's policy that all executive directors must retire at the age of 65 years. The other two are the MD of Tata Steel, B Muthuraman, and his long-time counterpart at TCS, S Ramadorai. They retire in September and October, respectively.
The company had reported less than 1 per cent of the revenue of Rs 781 crore (Rs 7.81 billion) in 2007-08 from the dredging business. For the nine months ending December 31, 2008, it reported revenue of Rs 853 crore (Rs 8.53 billion), a 61.1 per cent growth over the corresponding period of the previous year as it largely deployed its ships on long-term contracts.
Currently, the public sector major has an inventory of 20,000 tonnes as against the usual level of 5,000 tonnes. Analysts expect the inventory to reach 25,000 tonnes by March-end. "We expect aluminium prices to remain below the cost of production for the next six to nine months," said Vipul Shah, an analyst with Mumbai-based brokerage K R Choksey Shares. "The outlook for aluminium is grim," he said.
India's largest refiner, Reliance Industries Ltd, is in talks with public sector oil marketer Hindustan Petroleum Corporation for a tie-up to run the former's fuel retail outlets, closed a year earlier.HPCL has issued a limited tender to five merchant bankers to advise it on the deal.Last year, RIL closed 1,400 petrol pumps -- 900 owned by the company and the rest managed by dealers.
The debt came with covenants, which require borrowers to meet certain conditions such as a mandated debt to EBITDA ratio. A failure to meet the conditions may result in an increase in interest rates. The company reported EBITDA (operating profit) of $69 million in the quarter ended December 31, down from $151 million in the corresponding period of the previous year.
Aban offshore has a Rs 13,000 crore debt on its books and a market cap of only Rs 1,645 crore, down 90 per cent from its peak on May 23 last year. The huge debt is a result of the company, earlier known as Aban Lloyd, buying a 33.7 per cent stake in Sinvest ASA, a Norwegian drilling company, for Rs 5,200 crore. The acquisition gave Aban access to eight premium jack-up rigs with contracts, but it also increased its debt substantially.
The retailer, which runs a supermarket chain under the More brand, is targeting annual sales of $4.5 billion (Rs 22,000 crore or Rs 220 billion) by March 2014 from Rs 1,200 crore (Rs 12 billion) in the current financial year. The retailer clocked sales of Rs 500 in the previous year. In 2007, the company had talked about a Rs 9,000 crore (Rs 90 billion) investment plan.
The Reserve Bank of India is formulating guidelines that would allow government-owned banks get into the private equity business.
The Securities and Exchange Board of India, or Sebi, on Wednesday made it compulsory for promoters of listed companies to disclose the details of their pledged shares, but clarified that there would be no need to disclose pledged shares of the holding company. Legal and accountancy experts say this may lead to a restructuring of the shareholding pattern in many companies.
Falling oil rates have made rigs available for hire at a cheaper rate. Oil and Natural Gas Corporation planned to foray into building rigs in June 2008 owing to its short supply as crude oil prices zoomed northwards.
Tata Motors, which is announcing its results January 30, is likely to end 2008-09 with around Rs 500 crore (Rs 5 billion) less cash mainly because sales of commercial vehicles, which account for about 60 per cent of its revenues, have dropped sharply.
The company is still short of over Rs 4500 crore (Rs 45 billion) to refinance the debt which is due before June 2 this year. The company had planned to raise the fund for refinancing through three routes. It planned to raise about Rs 4200 crore through rights issues which it managed after the issue devolved on underwriters in October as the stock prices were tumbling globally following the economic crisis.
While the Tatas are looking for PE deals of about $50 million or less, the A V Birla Group is eyeing deals worth not more than $25 million. Tata Capital is banking on its ability to source deals by exploiting the existing Tata ecosystem of suppliers and customers. The Birla group, which has committed 40 per cent of the $250-million corpus it planned to raise for its PE fund, is looking to leverage its strength to source and evaluate deals.
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