Carlyle Group has committed to invest up to $500 million in Magna Energy Ltd, an India-focused upstream oil and gas company, the global private equity firm said in a statement on Monday. Led by Mike Watts and Jann Brown who have a combined 60 years of oil industry experience, Magna Energy is seeking to become a full-cycle oil and gas company through acquisitions and securing local licences in the Indian sub-continent. It will have a primary focus on development and production. The buyout shop is making the investment through its unit Carlyle International Energy Partners, a fund that focuses on oil and gas exploration and production. (Reuters)
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UAE-based, GP Petroleums previously knows as Sah Petroleums, announced a tied up with Spain’s petroleum company Repsol to exclusively manufacture and market Repsol’s superior and comprehensive line of premium quality lubricants across India, thus unfolding a new chapter in the history of Indian company’s operations.Sudhir Goyel, Managing Director, Gulf Petrochem Group, said, “We will be marketing their entire product range as part of our portfolio. With the economy showing recovery, the lubricant segment is expected to witness growth in future. With the changing engine technology, Repsol lubricants which is focused on innovation is the answer to today’s consumer needs."With this, GP Petroleums with its flagship brand IPOL, will now unleash a new aggressive marketing strategy in the automotive segment also with Repsol, a global leader in the lubricant space. “We see the Indian market to have great potential. India will be a very important market for us and this tie-up will help us expand our footprints in this ever growing economy. Partnering with GP Petroleums Ltd, a brand with strong presence in the Indian lubricant market, has given us a firsthand advantage in this sector. With our strengths together, we extend our capabilities to globally distribute a wider variety of products,” said Orlando Carbo, Lubricants Director, Repsol.IPOL has been present in India for over 4 decades & has established itself as one of the well accepted industrial lubricant brands. GP Petroleums has well equipped manufacturing facilities with hi-tech blending facility, quality-control test labs & automated filling & packaging stations. The group’s in-house Base Oil Storage facility of 17,000 KL is one of the largest in the Indian industry which uses cutting edge remote sensing technology to accurately measure and control the storage volumes. It has an annual production capacity of 80,000 KL.
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The Income Tax Department will defend the Rs 20,495-crore tax claim it has made on Cairn India even after the company is merged with its parent Vedanta Ltd. Cairn India has challenged the March I-T notice seeking Rs 20,495 crore in tax for its alleged failure to deduct withholding tax on alleged capital gains made by its erstwhile promoter, Cairn Energy Plc. "This has gone to Court process. We have a provisional attachment order. We will ensure that we remain secure, whatever position changes we will ensure our security. We are certainly keeping watch on it," CBDT chairperson Anita Kapur told reporters here. The Income Tax Department had separately slapped a Rs 10,247-crore tax demand on Cairn Energy Plc for an alleged Rs 24,500-crore worth capital gains it made in 2006 while transferring all of its Indian assets to a new company, Cairn India, and getting it listed on the stock exchanges. After the notice, it restrained Cairn Energy from selling its residual 9.8 per cent stake in Cairn India. The shares have been frozen since then. Vedanta chief executive Tom Albanese had earlier stated that the group was "frustrated" by the tax demand raised using retrospective legislation. "My own view is that these types of cases don't help India's reputation in the international market. I was in Beijing last week and met some of the biggest fund houses from around the world and they were all asking what is going on in India," he had said on June 14. Cairn India, which is 60 per cent owned by Vedanta and is being merged with the metal and mining firm, has stated that it does not agree with the tax demand and challenged it in the Delhi High Court. "Our intention is to invest in India. We are frustrated by this tax case," Albanese had said. Cairn Energy too has challenged the tax demand and has initiated arbitration under the India-UK Bilateral Investment Protection Treaty. The Income Tax Department had alleged that Cairn India failed to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK. The demand of Rs 20,495 crore comprises tax of Rs 10,248 crore and interest of approximately Rs 10,247 crore. Cairn India says it has always been fully compliant with all Indian income tax laws. "Income tax assessments, including transfer pricing assessment were duly completed for financial year 2006-07, earlier," it had previously said. (PTI)
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Mumbai's office space supply will grow by 16 per cent in less than two years, but the increase falls short of the demand for commercial property in India's financial capital. The Grade-A office space in the first quarter of 2015 stood at 96 million square feet and about 15 million sq ft could be added in the next 18 months if projects are delivered on time, according to a global real estate survey. However, given the poor track record of developers in sticking to construction deadlines, the supply could be around 12 million sq ft, which is also a significant addition. Mumbai is among the leading world cities covered in a survey of commercial pace availability by real estate consultancy Jones Lang Lasalle. Shanghai comes on top, with 42 per cent of its current office stock to be added in the next 18 months, followed by Mexico City and Sao Paulo adding 22.5 per cent each, and Dubai adding 20 per cent. The other cities from emerging economies that figure in the top 10 list include Beijing (12 per cent), Moscow (9 per cent) and Hong Kong (5 per cent). Among the mature economies, Singapore City will add 14 per cent, London will add 6 per cent, Sydney and Paris will both add 5 per cent, Frankfurt will add 2 per cent and New York will add only 1 per cent of their current office stock. Market DynamicsIn Mumbai , the bulk of this projected 16 per cent office supply consists of buildings launched many years ago. Before the global financial crisis in 2008, a healthy demand existed for office spaces and developers launched many new projects to cater to it. “Post-crisis, work on these buildings slowed down or halted altogether as builders faced dismal demand and recession. Only a few developers could change or scrap their projects. The rest just decided to slow down. They are the ones who will finish their projects in the next 18 months," says Ashutosh Limaye, national director of research at JLL. Moreover, Mumbai has hardly seen any new launches in the last few years. This will have implications in the next three years, with the supply pipeline drying up in the right locations like the Bandra Kurla Complex core business district and SBD (Central). On the other hand, peripheral areas such as Thane and Navi Mumbai will see an oversupply, which will actually be the supply that had got delayed due to the global financial crisis and would get constructed during this time period. About 14 million sq ft of office spaces that will be constructed between 2017 and 2019 will come up largely in the peripheral areas, which will not help enough because they will be in the wrong locations. Grade-A supply to come up between 2017 and 2019 in the BKC core business district and secondary business district (SBD)-Central will be just 2.37 million sq ft in an ideal scenario, i.e. when delays do not occur in construction work, out of this total expected supply of 14 mn sq ft. “This will be a lower than the expected supply of 4.18 mn sq ft from these two business districts in the next 18 months. Realistically, however, the supply can be expected to be only around 3.5 mn sq ft,” says Limaye. Interestingly, the expected demand for office spaces in these two areas in the same period will stand around 5 mn sq ft and is expected to grow beyond 2019. In other words, the time is right for developers to launch new commercial projects in the city and suburbs.
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The script of the merger between Vedanta Ltd and Cairn India Ltd was written in July 2014, when the latter extended a loan of $1.25 billion the former without taking prior approval from the shareholders.The stock of Cairn India had taken a beating after its largest minority stake holder Life Insurance Corporation criticized the company for the related party transaction between the two companies. The management of Cairn India escaped legal action as the company had extended the loan to Vedanta Ltd before the enactment of the new government guidelines of related party transactions, which forbid a company to extend a loan or any cash payment to a related party without seeking the approval of shareholders.However, at that time the management of Vedanta Ltd told investors and analysts that the money borrowed by Vedanta Ltd at a floating rate of 3 per cent plus Libor gave significantly higher return to Cairn India compared to the fixed deposit of same tenor. Interestingly, the loan was extended at a time when Cairn India was itself sitting on an investment cycle of $3 billion dollar to improve its oil exploration capacity.Even if the company did not have any significant capital expenditure plans, it should have paid higher dividend to its stakeholders. Cairn India Ltd paid a dividend of 90 per cent in March 2015 on the face value of Rs 10 per share. The dividend could have been much higher if the company had decided to distribute the excess cash among its shareholders.However, Just eleven months later, when the borrowing company (Vedanta Ltd) was supposed to repay its debt to the lending company, the management announced the merger between the two companies, converting the debt of Vedanta resources liable to be paid with interest to Cairn India into cash for the merged entity.In lieu of the merger, the shareholders of Cairn India have received only one stock of Vedanta Ltd, which was trading at a bonus of Rs 184 at the time of merger. In addition, Cairn India shareholders will get a Rs 10 face value preferential share as a sweetener.If the merger between the two entities took place in June 2014 when the price of crude oil was above $100 per barrel, the value of Cairn India’s share was Rs 366, whereas the share of Vedanta Ltd was selling for Rs 290 per unit.While the share price of Cairn India has come down due to cyclic slowdown in the price of crude oil, the fall in the price of Vedanta Ltd is because raw material crunch that is unlikely to be resolved anytime soon. Vedanta is operating its Jharsugda aluminum facility at a mere 25 per cent of installed capacity. The company had set up this facility with an investment of Rs 52,000 crore.Interestingly the London listed Vedanta Resource Plc that is the holding company of India listed Vedanta Ltd and Cairn India, saw a downgrade in April this year by Standards & Poor’s as the rating agency questioned the London listed miner’s ability to meet its financial obligations.For the year ended 31 March 2014, the Vedanta Group earned $12.9 billion and had an operating profit of $4.5 billion. Vedanta Resources Plc had gross debts of nearly $17 billion (Rs 1,08,905 crore) at the end of the last financial year. After the merger, the consolidated debt of Vedanta Resources Plc is likely to come down significantly.On the other hand the investors of Cairn India ltd will now be exposed to the environmental and legal risks associated with the mining sector. investors who bought Cairn India's shares just to be part of the crude oil play in the international market may have to exit the company as pure crude oil business is any day a safer and more profitable bet than mining anywhere in the world.The only good thing from a Cairn India shareholder’s perspective is that in case the company loses the tax liability case against the government which would make it liable to pay over Rs 20,000 crore, the company will benefit from the larger balance sheet of the merged entity.Following Cairn India, Vedanta will now look to merge with its other majority holding companies like Balco and Hindustan Zinc, making the parent company an even larger entity. One will have to keep a close watch to see who benefits in the future, the management or the shareholders.
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French engineering major Alstom plans to hire 200-250 engineers annually in India over the next 3-4 years as it looks to double business to 800 million euro (about Rs 5,700 crore) in the country. "We love doing business in India. We are finding good business environment in India. We are looking at doubling the order book in the next three to four years. Currently, we have an order book of Euro 400 million," Alstom (Transport) President Henri Poupart-Lafarge told reporters in Milan. Speaking highly about the Modi government's "Make In India" initiative and the thrust on industrial corridors and smart cities, he said, business environment in the country has improved in the last one year. Alstom, he said, is looking at increasing the skilled workforce in India to strengthen manufacturing and R&D capabilities and also to introduce the latest signalling systems for the metro rail projects. The Indian arm of Alstom, he added, would be hiring about 200-250 engineers every year for the next three to four years depending on the growth in business. The French company has about 800 engineers on its rolls presently in India. Bids For ProjectsPoupart-Lafarge said Alstom will bid for projects in the urban transport sector which is expected to witness rapid growth with more and more cities demanding metros services. "There will be more demand for metros in different cities and also for expansion of the existing ones," he said, adding that the scope of work would increase substantially with the government developing smart cities. "We are very much interested in smart cities...though there is no definition of smart cities as such, it does mean better life for people to work and live," he added. On whether Alstom was worried about delay in passage of the land acquisition bill, Poupart-Lafarge said: "These are sensitive issues and every nation faces such problems. It is not something peculiar to India." According to Jojo Alexander, Vice President-Business Development, Alstom Transport (Asia-Pacific Region), the company is keen to participate in the Dedicated Freight Corridor project, the largest railway infrastructure project currently in the country creating a freight quadrilateral across India. "We have recently bid for the electrification an signalling package of the Khurja-Bhaupur (343 km) section of the Eastern Corridor and are optimistically awaiting the result. However, we cannot say much until the contract is formally awarded," he said. As regards the main challenge faced by MNCs like Alstom in the metro business in India, Alexander said, is the lack of standardisation across metro projects. "Presently the metro system in each city has its own specifications calling for unique solutions. The execution of metro projects could be faster and more cost-efficient if there are uniform standards. The efforts of the Ministry of Urban Development in this direction are welcome" he added. India, he said, should also be looking at implementing modern light rail systems such as an elevated tramway as another mode of public transport. "Light Rail will suit smaller towns and cities where the roads are narrower and passenger volumes are lower. They can also act as feeder networks for metros in large cities," he added. Alstom is currently associated with metro rail projects in Delhi, Kochi, Jaipur, Chennai and Bangaluru. For Indian Railways, Alstom has provided the initial coaches and the technology for the LHB (lightweight all-metal) coaches used on Rajdhani and Shatabdi trains. (PTI)
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Indian mining and energy group Vedanta Ltd made a $2.3 billion offer on Sunday (14 June) to buy out minority shareholders in cash-rich oil unit Cairn India, a deal that helps parent Vedanta Resources Plc repay hefty debts. Shareholders in Cairn India, India's top private sector oil producer, will get one share in Vedanta Ltd for every share held, the companies said in a joint statement on Sunday. The shareholders will also get one redeemable preference share in Vedanta Ltd with a face value of 10 rupees, making the deal worth roughly $2.3 billion. That implies a premium of 7.3 percent to Cairn's Friday close and a ratio of 1.04 for 1, marginally better than expectations of a simple 1 for 1 swap. Vedanta began simplifying its complex structure with a 2012 overhaul, but further moves to clean up the group and buy out minorities in its cash generating units have long been awaited by the market. Cairn India has a roughly $2.6 billion cash pile. The deal, expected to close in the first quarter of 2016, is the first major structural change under Vedanta Ltd Chief Executive Tom Albanese, the former Rio Tinto boss appointed last year. He said the deal moved Vedanta closer to its goal of being a major diversified player. Though long-expected, the timing of the Cairn buyout is likely to have been triggered by a sharp drop in Cairn India's stock as oil prices fell, making for a favourable merger ratio for Vedanta. Cairn India shares have dropped over 50 percent over the past year. More To ComeVedanta Resource Plc, controlled by one-time scrap metal dealer Anil Agarwal, currently holds a majority interest in Mumbai-listed operating unit Vedanta Ltd, which in turn holds a 59.88 percent stake in Cairn India. But Vedanta Ltd also holds other assets, including about 65 percent in Hindustan Zinc, whose minorities are likely to be the next target of the group's clean-up effort, and aluminium producer BALCO, in which it has a 51 percent stake. Both companies count the Indian government as minority shareholders, limiting Vedanta's ability to move. "We would look forward to participate in what would likely be an auction at that point in time," Albanese said on Sunday. Cairn, which in March said it would cut spending by about 60 percent for the fiscal year starting April 1, said those plans, closely watched by India's government, would be unchanged. Vedanta is also currently contesting a $3.3 billion tax claim from the tax authorities in relation to Cairn India's 2007 listing. That liability and a $1.2 billion inter-company loan advanced by Cairn India to its parent last year were factored into the deal, Vedanta Chief Financial Officer DD Jalan said. The deal will now have to be approved by regulators but also, under new rules in India, by a majority of the companies' minority shareholders. Cairn's largest minority holder is former owner Cairn Energy Plc, which has been looking to sell. Cairn Energy said on Sunday it would assess the proposal. Lazard & Co advised Vedanta Ltd, while JP Morgan Cazenove and Morgan Stanley were joint advisers to Vedanta Plc.(Agencies)
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Railway Minister Suresh Prabhu has called upon industrialists here to come forward for the development of railway stations on PPP model and assured them of full assistance from his ministry. Addressing industrialists at the Jodhpur Industries Association hall on the second day of his Jodhpur visit, Prabhu termed the city as commercial hub of the country for its entrepreneurship and availability of minerals, specially lime. He said these features can play an important role in taking the country to the desired heights in manufacturing sector. On tourism potential in Rajasthan, Prabhu said the Central and state governments together are forming a company to explore the tourism potential in the state and addressing the rail-related issues in a better way. "This company will generate funds for strengthening of rail infrastructure, making and implementing new projects and enhancement in the rail and passengers' facilities," he said. Considering the tourism potential in Rajasthan, a new tourism policy will be drafted soon, which will provide new direction to the tourism industry in the state, Prabhu said. He also met the erstwhile ruler of Jodhpur Gaj Singh II to explore the possibilities wherein the Indian Heritage Hotels Association (IHHA) and the Indian Railway Catering and Tourism Corporation (IRCTC) would work together for the promotion of tourism. The discussions were centred around restoring and developing the heritage properties and unused ancient rail lines as a part of a tourist circuit. Singh said that heritage tourism has a huge potential and these properties can be utilised and promoted as added tourism attraction. (PTI)
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