LONDON: Vijay Mallya-promoted United Spirits Ltd is considering to sell 49 per cent stake in its Glasgow based subsidiary Whyte & Mackay to pay off debt, according to a media report.
According to the 'The Times', the move is a part of a drive to cut UB Group's USD 4 billion (2.5 billion pounds) debt.
Mallya told the daily that that USL, the spirits holding group that has debts of USD 1.68 billion, was considering sale of a 49 per cent stake in Whyte & Mackay, which was bought in 2007 for USD 1.2 billion.
Last fiscal, USL had posted a total income of Rs 6,422.72 crore with a net profit of Rs 403.04 crore. So far this fiscal, in the nine months period ended December 31, 2011 the company's total income stood at Rs 5,778.14 crore and net profit was at Rs 332.77 crore.
The report also quoted Ravi Nedungadi, the chief financial officer of the UB Group, saying that there had been interest from "a number of private equity players" in W&M, which owns single malt whisky brands such as Jura and Dalmore.
He said that UB Group would retain ownership of 51 per cent and that the proceeds would be used to cut USL's debt and to help fund an expansion drive, including the construction of new distilleries and India's biggest glass plant.
Nedungadi, however, denied that the cash would be used to pay off any of Kingfisher Airlines' debt.
"If we were to sell or dilute any of those assets the proceeds would go only to repay or reduce United Spirits' debt," the report quoted him as saying.
Success in my Habit
Tuesday, March 13, 2012
Liquor marketer Bacardi adds a plus to become more masculine
BANGALORE: Liquor marketer Bacardi may have made no distinction between sexes while positioning its ready-to-drink product Breezer in India a decade ago, but it is certainly pulling out the masculine card with its latest offering Bacardi+. The family-controlled spirits firm says unlike Breezer, Bacardi+ is a large peg of the eponymous rum premixed with either lemonade or cola.
The alcohol category does not typically distinguish between a male or female, but in this case, while the company wants to retain its core consumer, it also wants to expand the base of the other. And to achieve this, it has dropped the name Bacardi from Breezer bottles in recent months, while Bacardi+ carries the company's name more prominently.
"Globally when a product is positioned for men, it tends to attract women consumers too," Mahesh Madhavan, Bacardi's president & CEOSouth Asia, says. "But it's not the other way round," he explains, adding that Breezer was positioned as a unisex product.
"Bacardi+ is a masculine product which is made for the male consumer who would like the product to be delivered to him as a perfect serve," Madhavan says. The product is available in some markets in cans but in India, it is being introduced in grey and black bottles.
With an alcohol content of 8%, it gets positioned closer to the strong beer category in India, which accounts for at least 75% of the Indian beer market. Rivals say that even a small shift of these consumers to Bacardi+ would result in large volumes. At the same time, women consumers may consider it as an upgrade too.
Priced at around Rs 10 higher than Breezer for a 250 ml bottle on an average, it will sell at Rs 75 in Bangalore, and Rs 80 in Delhi. "The margins would be higher because fixed costs such as packaging of bottle, labels and caps do not increase," a senior executive of a rival firm says, seeking anonymity. Bacardi, which also makes brands such as Dewar's Scotch, Grey Goose vodka and Bombay Sapphire gin, had in 2002 popped open the ready-to-drink (RTD) alcoholic beverage category in India with Breezer.
Over the years, the over 1.5 million cases category became synonymous with Breezer as it appealed to younger consumers as a recruit drink. But its lower alcohol content, fruity flavour and colouring led to it being perceived as a woman's drink. The Bermuda-headquartered firm, which is known for its rums, entered India in 1998 and the market is now one of its fastest-growing.
The alcohol category does not typically distinguish between a male or female, but in this case, while the company wants to retain its core consumer, it also wants to expand the base of the other. And to achieve this, it has dropped the name Bacardi from Breezer bottles in recent months, while Bacardi+ carries the company's name more prominently.
"Globally when a product is positioned for men, it tends to attract women consumers too," Mahesh Madhavan, Bacardi's president & CEOSouth Asia, says. "But it's not the other way round," he explains, adding that Breezer was positioned as a unisex product.
"Bacardi+ is a masculine product which is made for the male consumer who would like the product to be delivered to him as a perfect serve," Madhavan says. The product is available in some markets in cans but in India, it is being introduced in grey and black bottles.
With an alcohol content of 8%, it gets positioned closer to the strong beer category in India, which accounts for at least 75% of the Indian beer market. Rivals say that even a small shift of these consumers to Bacardi+ would result in large volumes. At the same time, women consumers may consider it as an upgrade too.
Priced at around Rs 10 higher than Breezer for a 250 ml bottle on an average, it will sell at Rs 75 in Bangalore, and Rs 80 in Delhi. "The margins would be higher because fixed costs such as packaging of bottle, labels and caps do not increase," a senior executive of a rival firm says, seeking anonymity. Bacardi, which also makes brands such as Dewar's Scotch, Grey Goose vodka and Bombay Sapphire gin, had in 2002 popped open the ready-to-drink (RTD) alcoholic beverage category in India with Breezer.
Over the years, the over 1.5 million cases category became synonymous with Breezer as it appealed to younger consumers as a recruit drink. But its lower alcohol content, fruity flavour and colouring led to it being perceived as a woman's drink. The Bermuda-headquartered firm, which is known for its rums, entered India in 1998 and the market is now one of its fastest-growing.
Bacardi Martini sets up new product development centre in Nanjangud, Mysore
Family-controlled spirits firm Bacardi Martini is accelerating its presence in India. It has set up a new product development centre at its Nanjangud plant in Mysore, signalling its plans to create local brands.
All of the new product development for the maker of rums, Grey Goose vodka and Dewar's Scotch was earlier done in the US. The centre in India will now serve all of South Asia.
"The growing importance of India in the region and keeping the consumer at the heart of all our innovation, it was felt that we would be able to do it with a centre in India," Mahesh Madhavan, Bacardi's president & CEO-South Asia, says.
Several multinational spirits firms have been rolling our local whiskies to straddle a larger market as imported spirits carry high tariffs in India. The maker of Royal Stag, Blender's Pride and Imperial Blue whiskies, Pernod Record was the first to bet on this strategy. Last year, Diageo Plc too launched Rowson's Reserve whisky in India.
Bermuda-headquartered Bacardi counts India among its fastest-growing markets. It entered India in 1998 through a joint venture with Mysore-based Gemini Distilleries, which owned 26% stake in the business. In 2009, it acquired this local partner.
All of the new product development for the maker of rums, Grey Goose vodka and Dewar's Scotch was earlier done in the US. The centre in India will now serve all of South Asia.
"The growing importance of India in the region and keeping the consumer at the heart of all our innovation, it was felt that we would be able to do it with a centre in India," Mahesh Madhavan, Bacardi's president & CEO-South Asia, says.
Several multinational spirits firms have been rolling our local whiskies to straddle a larger market as imported spirits carry high tariffs in India. The maker of Royal Stag, Blender's Pride and Imperial Blue whiskies, Pernod Record was the first to bet on this strategy. Last year, Diageo Plc too launched Rowson's Reserve whisky in India.
Bermuda-headquartered Bacardi counts India among its fastest-growing markets. It entered India in 1998 through a joint venture with Mysore-based Gemini Distilleries, which owned 26% stake in the business. In 2009, it acquired this local partner.
Reliance Brands to sell LVMH's Thomas Pink shirts in India
MUMBAI: Mukesh Ambani-led Reliance Brands today said it has signed an exclusive agreement to sell French major Louis Vuitton Moet Hennessy's brand Thomas Pink's shirt collection in the country.
Louis Vuitton Moet Hennessy (LVMH) had acquired the British brand Thomas Pink in 1999, and it will hawk a range of luxury shirts, ties, knitwear and accessories in the country.
"In Reliance Brands we found a partner that not only understands and resonates our brand values but also has a winning combination of people, infrastructure and market muscle that we aspire to have in a partner," Thomas Pink President and Chief Executive Jonathan Heilbron said in a statement issued here.
Reliance Brands currently has brand partnerships for high-street labels like Diesel, Ermenegildo Zegna, Hamley's, Kenneth Cole, Paul & Shark, Quiksilver, Roxy, Steve Madden and Timberland and had also announced a joint venture with US-based Iconix recently.
"Given the increasingly well-travelled and aspirational Indian consumer, the choice to partner with and launch Thomas Pink in India was obvious. It is a Brand with very high recall and will sit in the Indian wardrobes easily and naturally," Reliance Brands President and Chief Executive Darshan Mehta said.
Louis Vuitton Moet Hennessy (LVMH) had acquired the British brand Thomas Pink in 1999, and it will hawk a range of luxury shirts, ties, knitwear and accessories in the country.
"In Reliance Brands we found a partner that not only understands and resonates our brand values but also has a winning combination of people, infrastructure and market muscle that we aspire to have in a partner," Thomas Pink President and Chief Executive Jonathan Heilbron said in a statement issued here.
Reliance Brands currently has brand partnerships for high-street labels like Diesel, Ermenegildo Zegna, Hamley's, Kenneth Cole, Paul & Shark, Quiksilver, Roxy, Steve Madden and Timberland and had also announced a joint venture with US-based Iconix recently.
"Given the increasingly well-travelled and aspirational Indian consumer, the choice to partner with and launch Thomas Pink in India was obvious. It is a Brand with very high recall and will sit in the Indian wardrobes easily and naturally," Reliance Brands President and Chief Executive Darshan Mehta said.
Colouring agent in Pepsi & Coke can cause cancer
ATLANTA: High levels of a chemical that causes tumours in animals were found in Coca-Cola and PepsiCo sodas, according to a consumer advocacy group pressing US regulators to ban a colour additive. The chemical 4-methylimidazole was found in Coca-Cola, Pepsi Cola, Diet Coke and Diet Pepsi and is the caramel colouring used in the beverages , according to a study released on Tuesday by the Center for Science in the Public Interest.
The group petitioned the US Food and Drug Administration in February to ban the ammonia sulphite colouring, which is found in most colas. "Coke and Pepsi, with the acquiescence of the FDA, are needlessly exposing millions of Americans to a chemical that causes cancer," said Michael F Jacobson, the Washington-based group's executive director, said. "The FDA needs to protect consumers from this risk."
The FDA has no reason to believe there is any immediate risk from the substance and is reviewing the group's petition, said Douglas Karas , an agency spokesman, in an e-mail . A consumer would have to drink more than a thousand cans of soda in a day to match the doses administered in studies that showed links to cancer in rodents, the FDA said.
The group petitioned the US Food and Drug Administration in February to ban the ammonia sulphite colouring, which is found in most colas. "Coke and Pepsi, with the acquiescence of the FDA, are needlessly exposing millions of Americans to a chemical that causes cancer," said Michael F Jacobson, the Washington-based group's executive director, said. "The FDA needs to protect consumers from this risk."
The FDA has no reason to believe there is any immediate risk from the substance and is reviewing the group's petition, said Douglas Karas , an agency spokesman, in an e-mail . A consumer would have to drink more than a thousand cans of soda in a day to match the doses administered in studies that showed links to cancer in rodents, the FDA said.
Murugappa group-3M battle over Wendt India enters new phase
CHENNAI: The battle between the Murugappa group and 3M for control of Wendt India has entered a new phase, with the American conglomerate indicating that it is willing to sell its holding in the abrasives maker.
But a dispute over the price it is seeking to exit the joint venture with the Murugappa group company, Carborundum Universal (Cumi), could hamper a solution to an issue that is being adjudicated by the Company Law Board.
3M, whose products include the Scotch-Brite homecleaning range and Post-it notes, has told the Company Law Board that it is "not averse" to selling its 40% stake in Wendt to Carborundum, an executive of the Murugappa group told ET. But the valuation demanded by 3M, which is based on the market value of Wendt, is not acceptable to Murugappa group, Carborundum managing director K Srinivasan said.
Instead, 3M should settle for the valuation that was determined by KPMG, he added. 3M declined to comment. In 2010, by virtue of its nearly $500 million (Rs 2,500 crore) purchase of Winterthur Technologies, 3M became an equal joint venture partner of Carborundum in Wendt India. Both hold almost a 40% stake each. But Carborundum objected to the deal, saying it had the first right of refusal to buy out shares of Wendt GmbH (a German arm of Winterthur, which held the stake). Carborundum then moved the Company Law Board.
"They are expecting it to be at market and market plus premium, which is completely unacceptable because they bought it at a price of 12.8 million (Rs 85 crore) for their 40%," Srinivasan told analysts in a conference call recently. Carborundum has now asked a court to appoint a valuer.
Another way of resolving it, he said, will be if 3M agrees to sell Wendt to Carborundum as per the fair valuation report of KPMG, based on which it acquired the Winterthur stakes.
"This is a fair way forward and in line with their argument that they did not violate the law of the land at the time of transaction, and that it was only a consequential event and not the intended target," he wrote in an email. Wendt India posted a standalone net profit of Rs 3.5 crore in the third quarter, down from Rs 4.4 crore in the year-ago period. Revenue increased to Rs 24 crore, from Rs 22 crore.
Its shares have risen over 32% so far this year. If and when 3M's exit comes, it will be the first time Wendt India will be without a foreign partner in the 32 years of its existence. It started in 1980 as a JV between Wendt GmbH and the House of Khataus. In 1991, Cumi replaced the Khataus. But the Murugappa group isn't worried about this.
"There have been three ownership changes in five years at the Wendt GmbH that end with all its attendant uncertainty, disruption and changes. Wendt India has in the process learnt to live without the support of foreign JV partner. The eventual sellout of the 40% stake by 3M will only complete the process running for five years now," said Srinivasan.
He added: "The old Wendt GmbH team with which Wendt India worked well for 27 years is all but gone in the repeated ownership changes. Today, it's lawyers who are talking, not engineers and technocrats who worked with the joint venture all these years. Carborundum has all along ensured that Wendt (India) is well managed and well run."
But a dispute over the price it is seeking to exit the joint venture with the Murugappa group company, Carborundum Universal (Cumi), could hamper a solution to an issue that is being adjudicated by the Company Law Board.
3M, whose products include the Scotch-Brite homecleaning range and Post-it notes, has told the Company Law Board that it is "not averse" to selling its 40% stake in Wendt to Carborundum, an executive of the Murugappa group told ET. But the valuation demanded by 3M, which is based on the market value of Wendt, is not acceptable to Murugappa group, Carborundum managing director K Srinivasan said.
Instead, 3M should settle for the valuation that was determined by KPMG, he added. 3M declined to comment. In 2010, by virtue of its nearly $500 million (Rs 2,500 crore) purchase of Winterthur Technologies, 3M became an equal joint venture partner of Carborundum in Wendt India. Both hold almost a 40% stake each. But Carborundum objected to the deal, saying it had the first right of refusal to buy out shares of Wendt GmbH (a German arm of Winterthur, which held the stake). Carborundum then moved the Company Law Board.
"They are expecting it to be at market and market plus premium, which is completely unacceptable because they bought it at a price of 12.8 million (Rs 85 crore) for their 40%," Srinivasan told analysts in a conference call recently. Carborundum has now asked a court to appoint a valuer.
Another way of resolving it, he said, will be if 3M agrees to sell Wendt to Carborundum as per the fair valuation report of KPMG, based on which it acquired the Winterthur stakes.
"This is a fair way forward and in line with their argument that they did not violate the law of the land at the time of transaction, and that it was only a consequential event and not the intended target," he wrote in an email. Wendt India posted a standalone net profit of Rs 3.5 crore in the third quarter, down from Rs 4.4 crore in the year-ago period. Revenue increased to Rs 24 crore, from Rs 22 crore.
Its shares have risen over 32% so far this year. If and when 3M's exit comes, it will be the first time Wendt India will be without a foreign partner in the 32 years of its existence. It started in 1980 as a JV between Wendt GmbH and the House of Khataus. In 1991, Cumi replaced the Khataus. But the Murugappa group isn't worried about this.
"There have been three ownership changes in five years at the Wendt GmbH that end with all its attendant uncertainty, disruption and changes. Wendt India has in the process learnt to live without the support of foreign JV partner. The eventual sellout of the 40% stake by 3M will only complete the process running for five years now," said Srinivasan.
He added: "The old Wendt GmbH team with which Wendt India worked well for 27 years is all but gone in the repeated ownership changes. Today, it's lawyers who are talking, not engineers and technocrats who worked with the joint venture all these years. Carborundum has all along ensured that Wendt (India) is well managed and well run."
Delhi High Court upholds Reckitt Benckiser's plea on reduction of its share capital
NEW DELHI: A plea by Reckitt Benckiser (India) Ltd's shareholder challenging the firm's decision to reduce its share capital has been dismissed by the Delhi High Court on grounds of want of any infirmity in the decision of the firm, noted for products like Dettol and Strepsils.
A bench headed by Acting Chief Justice A K Sikri dismissed the plea of shareholder Chander Bhan Gandhi saying that it was bound by the law and there was no error in the approval granted to the scheme by the company judge.
"We are bound by the law and are unable to find any error in the legal reasoning given by the Learned Company Judge approving the action of the respondent company (Reckitt Benckiser (India) Ltd) of reducing the share capital," said the bench, which also included Justice Rajiv Sahai Endlaw.
Reckitt Benckiser (India) Ltd, last year, had reduced its share capital, including the shares held by the public, by 1.55 percent. The firm, however, had not reduced its shares, held by its UK-based promoter Reckitt Benckiser Plc, a multinational consumer firm.
The company bench of the high court had approved the firm's proposal to reduce its share capital, rejecting Gandhi's objections, prompting him to move the court's division bench against its order.
The reduction of share capital of a firm is decreasing company shareholders' equity through share cancellations and share repurchases. It is done by the companies for various purposes including for increasing shareholders' value and producing a more efficient capital structure.
A bench headed by Acting Chief Justice A K Sikri dismissed the plea of shareholder Chander Bhan Gandhi saying that it was bound by the law and there was no error in the approval granted to the scheme by the company judge.
"We are bound by the law and are unable to find any error in the legal reasoning given by the Learned Company Judge approving the action of the respondent company (Reckitt Benckiser (India) Ltd) of reducing the share capital," said the bench, which also included Justice Rajiv Sahai Endlaw.
Reckitt Benckiser (India) Ltd, last year, had reduced its share capital, including the shares held by the public, by 1.55 percent. The firm, however, had not reduced its shares, held by its UK-based promoter Reckitt Benckiser Plc, a multinational consumer firm.
The company bench of the high court had approved the firm's proposal to reduce its share capital, rejecting Gandhi's objections, prompting him to move the court's division bench against its order.
The reduction of share capital of a firm is decreasing company shareholders' equity through share cancellations and share repurchases. It is done by the companies for various purposes including for increasing shareholders' value and producing a more efficient capital structure.
MMTC tenders for 12,000 T palmolein
NEW DELHI: Indian state-run trading company MMTC has tendered to buy 12,000 tonnes of refined palmolein in two parcels for delivery in March and April, a company statement said on Monday.
The refined, bleached and deodorised (RBD) palm oil should come from Indonesia or Malaysia.
The bidding deadline is March 19 and shipment is sought for one 6,000 tonne parcel by March 27 and for the second by April 5.
Last week, the state-owned company failed to award a similar tender for undisclosed reasons.
The refined, bleached and deodorised (RBD) palm oil should come from Indonesia or Malaysia.
The bidding deadline is March 19 and shipment is sought for one 6,000 tonne parcel by March 27 and for the second by April 5.
Last week, the state-owned company failed to award a similar tender for undisclosed reasons.
Joy Alukkas Group to invest Rs 100 crore in its aviation wing
Joy Alukkas Group, the Kerala-based gold jewellery retail chain, will invest Rs 100 crore in its aviation wing by next year to provide exclusive air charter services to various destinations across India and abroad and helicopter tours within Kochi. The group would launch its helicopter service from March 12.
The helicopter service will cater to tourists and residents of Kochi. A 6 seater helicopter service would be used for this purpose. The group has invested Rs 45 crore on Joy Jets, its aviation wing, Group chairman, Joy Alukkas told reporters here.
The air charter service was launched an year ago, covering the southern states, Maharashtra and Colombo Joy Jets, which has one jet and a helicopter at present, has plans to acquire 4 new jets. There are also plans to launch a long range flight by this December.
The helicopter to be used for this service is from Bell Helicopter, which manufactures helicopters for various commercial and military needs. The six seater helicopter will offer one hour tour of Kochi. The service would be extended to other cities in Kerala by next year.
The helicopter service will cater to tourists and residents of Kochi. A 6 seater helicopter service would be used for this purpose. The group has invested Rs 45 crore on Joy Jets, its aviation wing, Group chairman, Joy Alukkas told reporters here.
The air charter service was launched an year ago, covering the southern states, Maharashtra and Colombo Joy Jets, which has one jet and a helicopter at present, has plans to acquire 4 new jets. There are also plans to launch a long range flight by this December.
The helicopter to be used for this service is from Bell Helicopter, which manufactures helicopters for various commercial and military needs. The six seater helicopter will offer one hour tour of Kochi. The service would be extended to other cities in Kerala by next year.
Jewellery industry seeks cut in gold import by NRIs
NEW DELHI: The gems and jewellery industry has sought substantial reduction in the quantity of gold that NRIs are allowed to bring into the country, saying that the move will help check illegal imports.
"The federation recommends reducing this quantity (that NRIs bring in) to 1 kg from 10 kg, aimed at stopping illegal import of yellow metal in India," Gems and Jewellery Trade Federation Chairman Bachhraj Bamalwa said here today.
At present, Non-Resident Indians (NRIs) returning to India after six months are allowed to bring in 10 Kgs of gold, which is worth about Rs 3 crore.
Besides, Bamalwa said, there is a need to bring duty on gold imported in hand baggage by NRIs at par with customs duty levied on imports of yellow metal.
The customs duty on imports of gold and silver is 2 per cent and 6 per cent, respectively, of the value.
Duty on gold and silver imported by NRIs in hand baggage is Rs 300 per 10 gram and Rs 1,500 per kg respectively.
The government has recently notified the import duty on gold and silver as the old rates were fixed 4-5 years ago.
In the last few years, bullion prices have increased substantially and the change has been made to bring duties in line with market prices.
Further, the federation said there is a need to abolish 1 per cent excise duty imposed on branded jewellery to make the gems and jewellery sector more competitive.
"The federation recommends reducing this quantity (that NRIs bring in) to 1 kg from 10 kg, aimed at stopping illegal import of yellow metal in India," Gems and Jewellery Trade Federation Chairman Bachhraj Bamalwa said here today.
At present, Non-Resident Indians (NRIs) returning to India after six months are allowed to bring in 10 Kgs of gold, which is worth about Rs 3 crore.
Besides, Bamalwa said, there is a need to bring duty on gold imported in hand baggage by NRIs at par with customs duty levied on imports of yellow metal.
The customs duty on imports of gold and silver is 2 per cent and 6 per cent, respectively, of the value.
Duty on gold and silver imported by NRIs in hand baggage is Rs 300 per 10 gram and Rs 1,500 per kg respectively.
The government has recently notified the import duty on gold and silver as the old rates were fixed 4-5 years ago.
In the last few years, bullion prices have increased substantially and the change has been made to bring duties in line with market prices.
Further, the federation said there is a need to abolish 1 per cent excise duty imposed on branded jewellery to make the gems and jewellery sector more competitive.
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