Suzlon pays 30 mn euro for REpower stake

Suzlon Energy Ltd, India’s largest maker of wind turbines, paid €30 million (around Rs200 crore) to Martifer SGPS SA as part payment for a stake in a REpower Systems AG, the Portuguese company said in a statement on its website. The money was received on Thursday. Suzlon needs to pay the remaining €175 million this month to complete the purchase of the 22.4% stake in REpower, Martifer said. Suzlon paid €65 million in December as the first instalment for the stake, Martifer said.

Source: Livemint

Arvind Jadhav is new CMD of Nacil

Arvind Jadhav, a 1978 batch Indian Administrative Service officer, has been appointed the chairman and managing director (CMD) of National Aviation Co. of India Ltd (Nacil), which runs the Air India branded airlines. The appointment has been approved by the Prime Minister’s Office late on Thursday evening, a senior government official told Mint. Jadhav’s candidature was suggested by a committee headed by cabinet secretary K.M. Chandrasekhar last week after the government decided to replace the incumbent CMD Raghu Menon. Jadhav is likely to take office on Monday

Source: Livemint

Citi Reaps Billions From Japan Sale

Citigroup Inc. said it is selling its Japanese retail brokerage to Sumitomo Mitsui Financial Group Inc. in a deal worth a total $7.9 billion as part of its ongoing efforts to sell non-core businesses and boost its capital ratios.
The deal comes at a time when Citigroup is under pressure to raise more capital based on the early results of the government's stress tests of lenders, people familiar with the situation have said.
Citigroup will reap 545 billion yen for the retail broker, Nikko Cordial Securities, as well as 28.5 billion yen from the sale of Japanese-listed shares it is offloading at the same time. The U.S. bank will also recover 201 billion yen of excess cash on the retail broker's balance sheet.
The New York-based bank expects to get a $2.5 billion equity boost from the transaction. As a result, Citigroup's Tier 1 capital ratio as of March 31 would have been lifted by 27 basis points on a pro forma basis.
Citigroup acquired Nikko Cordial Group for 1.6 trillion yen ($16.17 billion) in a series of deals completed in January 2008. It still owns Nikko Asset Management Co., which is being sold in a separate process, and Nikko's merchant-banking business. Citigroup expects to book an after-tax loss of about $200 million.
The move turns Sumitomo Mitsui into a major player in the domestic securities industry and illustrates how Japanese firms are consolidating their domestic position by snapping up the assets of foreign firms hit by the global financial crisis.
"The transaction announced today has the potential to reshape the financial services sector in Japan," said Doug Peterson, chief executive of Citigroup's Japanese businesses.
Hit by credit-related losses and pressured to streamline its sprawling global operations, put up for sale large parts of its Japanese business, including the retail brokerage Nikko Cordial Securities.
Sumitomo Mitsui will hold the keys to Nikko Cordial's 109 retail branches across Japan and a 7,000-strong army of salespeople, allowing it to market securities to one of the world's biggest sources of latent wealth, Japanese households, which are flush with $15 trillion, mostly in cash.
Nikko Cordial has acted as lead manager to about 700 listed Japanese companies. As part of the package, Sumitomo Mitsui will also get the Japanese equity and debt underwriting business of Citigroup's wholesale business. It now owns the well-known Nikko brand in Japan, meaning Citigroup will eventually have to rebrand its other operations in Japan which carry the Nikko name, a person familiar with the matter said.
Sumitomo Mitsui already owns a second-tier retail broker called SMBC Friend Securities and has an investment banking joint venture with Daiwa Securities Group named Daiwa SMBC Securities. Financial analysts say Sumitomo Mitsui will now have a complicated management structure. The bank said it will consider merging Nikko's wholesale business with Daiwa SMBC.
Sumitomo Mitsui's brokerage business has until now trailed behind its large Japanese commercial banking peers, Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group. The three so-called megabanks vied for Nikko Cordial.
Citigroup picked Sumitomo Mitsui from among the three bidders based on price, the structure of the deal but also because it agreed to distribute the U.S. bank's global products over its network.
MUFG was less likely to agree to such a global alliance because of its newly-inked joint venture with Citigroup rival Morgan Stanley, people familiar with the matter said. Mizuho might have considered teamwork but has been distracted by the integration of its own brokerage unit with affiliate Shinko Securities Co., they added.

Source: Wall Street Journal

Danone Group wants to invest Rs 350cr over 5 years

The Danone Group has told the Foreign Investment Promotion Board (FIPB) that it proposes to invest Rs 300-350 crore over the next five years. It will invest in medical and nutrition sectors in India directly or indirectly via joint ventures (JVs). The group will further invest in baby food, dairy and beverages, it said. It has received a no objection certificate (NOC) from Britannia as well as from Avasthagen and Yakult joint ventures. The Danone Group currently holds 4.21% indirect stake in Avasthagen and has a 50:50 Indian JV with Yakult, Japan. It has sold its stake in Britannia to the Wadias this month.

Source: Moneycontrol

UTV Motion Pictures ventures into Hollywood

UTV Motion Pictures has signed a foreign sales deal with Madrid-based film sales company 6 SALES, for the Heather Graham starrer, ExTerminators. UTV through its foreign sales partner has already inked deals for Romania, Benulux and Middle Eastern territories. The movie, directed by John Inwood, stars Heather Graham, Jennifer Coolidge and Amber Heard. It is a dark comedy about Alex (Graham), a lonely accountant whose sole act of rage results in her being sentenced to court mandated rage therapy. There she meets Stella (Coolidge), the owner of a small extermination business who uses her car as a weapon; and Nikki (Heard), a dental technician with the face of an angel and the mind of a sociopath. Together these unlikely friends form their own 'silent revolution'. Commenting on the deal, Lokesh Dhar, Vice-President, UTV Motion Pictures, USA said, "With Exterminators, we look forward to strengthening our base in the international markets. After our international co-productions such as The Namesake, I think I Love My Wife and The Happening, ExTerminators is UTV's first independent production in the US and is definitely a landmark for us, as well as the Indian film industry." "The public's response is exactly what we had hoped for: uncontrollable laughter," said Marina Fuentes, 6 SALES partner. "We believe this type of movie is what the audiences are looking for. Good fun entertainment, " she added. The film premiered at SXSW (South by South West) festival in Austin, one of the top film festivals in the US to packed theatres.

Source: Moneycontrol

Panel backs M&A in telecom

A committee set up to resolve the controversy over allocation of airwaves or spectrum to telecom operators asked the government to modify its policies to allow consolidation in the industry, while opposing a three-year stock sale ban on promoters of companies that acquired telecom licences last year. The communications ministry and telecom regulator Trai had proposed the lock-in period to keep out non-serious players eyeing quick profits. The committee said, instead of imposing a ban on sale, the government should modify existing policies to allow larger operators to buy new entrants to fulfil their spectrum requirements. While suggesting several changes in India’s telecom M&A norms to allow consolidation, the committee criticised the current policy for leading to fragmentation of the sector by allowing about 15 players per circle. All telcos should be allowed to buy and sell spectrum and pay a fee to the government, the panel said, adding that the country should adopt the internationally-accepted auction system for issuing additional airwaves to telcos. ET had reported on April 24 that the committee would recommend auctions for all future spectrum allocations. The committee comprises representatives of the government, telecom regulator Trai, telecom technology experts and industry executives. The committee admitted that some players who received spectrum at a fixed fee may sell it or merge with another company making huge profits without rolling out a network. “Such gains can be moderated by levying a spectrum transfer or merger charge on all such transactions. Allowing such moderated gains is a small price to pay for moving to a market-based mechanism for spectrum allotment,” it said in its draft report, which was submitted to the department of telecom on Friday. The market should be allowed to determine the optimum number of operators by facilitating spectrum transfer and merger, the report said. Currently, India follows a controversial practice of allocating spectrum based on companies’ subscriber base, and is the only country in the world that follows this method. The report said that only the start-up spectrum, which is the minimum amount of radio frequencies that is required to launch mobile services, should be given for free for existing telcos. All subsequent allocations should be only through auctions, it said. The committee has recommended a flat fee for radio frequencies allocated to telcos since January 17, last year, the date on which the committee was set up. But, this one-time fee will be determined by the upcoming 3G auctions. For instance, if Vodafone Essar has been awarded 2 units of radio frequencies in Delhi & Mumbai after January 08, it will have to pay a fee equivalent to what the same amount of airwaves fetched during the 3G auctions. As per the current policy, all telcos share 2-6% of their annual revenues with the government as a fee for using the radio frequencies allotted to them. The committee said this fee should be a flat 3% irrespective of the quantity of radio frequencies that is held by a telecom company. The committee also refused to endorse demands from certain sections of the industry that all existing operators pay a one-time fee for the excess spectrum they hold in order to ensure a level-playing field with new entrants which only have start-up spectrum. The committee felt that that the government need not worry about ensuring an absolute level-playing field between licensees who entered the market at different points in time. “Variable pricing of resources for entrants at different times happens with natural resources like land for industrial development as well. Early or late entry comes with a set of advantages and disadvantages,” the report said. The committee said auctions can be held at regular intervals where telcos get airwaves in blocks of 1 MHz each. It also said that the current cap where GSM operators can hold a maximum of 15 MHz and CDMA players 7.5 MHz be done away with. Instead, it proposed an alternate methodology where a telco can take part in auctions as long as it does not hold more than 25% of the total spectrum available in that state or circle. This implies, the cap will be different for each circle as the availability of radio frequencies varies from state to state. Companies that enter the industry in the future the license will not come bundled with start-up spectrum, and these companies ‘would have to go to the market even for their initial airwaves, recommended the committee.

Source: Economic Times

Shah Rukh looks to exit Kolkata Knight Riders

After dropping “Kolkata” from Indian Premier League team (IPL) Kolkata Knight Riders (KKR), actor Shah Rukh Khan has started discussions with Nokia, Sahara, the Anil Ambani group, and several other companies to sell the team he bought just over a year ago for Rs 300 crore, and exit the business.
According to sources in Red Chillies Entertainment, KKR’s holding company, “Shah Rukh Khan has been trying to sell a stake in KKR for some time now. But since most companies he approached also wanted management control, Khan is now talking to Nokia, Sahara, Anil Ambani and others to sell his entire shareholding.”
Khan’s public relations officer, however, said she would not be able to confirm the development because she had not met the actor.
None of those who have reportedly been approached confirmed the development. Sahara India’s communications director Abhijit Sarkar said: “We have not been approached by Shah Rukh Khan yet. But if he does, we would be happy to buy the team.”
D Shivakumar, vice-president and managing director (markets), Nokia India, sent a text message saying: “Shah Rukh Khan will keep the team.”
A Reliance Communications spokesperson declined to comment. “A lot of people negotiate with Anil Ambani. I cannot comment unless there is something concrete on table.”
According to the Red Chillies official, Khan wants to exit, owing to the team’s poor performance — so far the team has won only one rain-curtailed game under the Duckworth Lewis method — and rising costs.
“If the Board for Control of Cricket in India (BCCI) does not increase the number of teams for next year, Khan could get double what he paid,” said the Red Chillies official.
Khan is supposed to pay Rs 30 crore per year for the next 10 years. The total annual cost for the team is about Rs 75 crore.
Khan had earlier said that KKR was easily the most successful IPL franchise, making a Rs 13 crore profit last year. However, his costs trebled last year owing to interventions from the Kolkata Municipal Corporation (KMC) and Cricket Association of Bengal.
According to initial calculations, Red Chillies had to pay Rs 90 lakh per match and was supposed to earn Rs 3 crore if all stadium tickets were sold at Eden Gardens. Red Chillies had to pay Rs 20 lakh to the police and municipal tax of Rs 5 lakh. So its expenses per match would have been over Rs 1 crore. But this figure had trebled.
Last year, however, Kolkata Police demanded Rs 2 crore as security fees, against Rs 50 lakh that the organisers of the IPL offered. Then, the Kolkata Municipal Corporation (KMC) demanded Rs 25 lakh from Red Chillies as amusement tax for holding IPL matches at Eden Gardens.
To settle the dispute between Kolkata Police and the IPL organisers over the cost of security arrangements at Eden Gardens, Red Chillies Entertainment had to agree to pay Rs 75 lakh as security fees.
About 5,500 uniformed personnel and about 1,500 sleuths were deployed to secure the stadium and its surrounding areas, since many celebrities were expected to watch the IPL matches at Eden Gardens.
Source: Business Standard