New Delhi: Impact investment bank Unitus Capital has raised an undisclosed sum from a consortium of investors, led by social venture capital firm Gray Matters Capital, the financial services provider to the base-of-the-pyramid population announced on Tuesday.
The proceeds from the second round of institutional funding will be used by the Bangalore-based investment bank to expand its operations in India and South-East Asia, according to Eric Savage, co-founder and president, Unitus Capital.
"Gray Matters Capital's investment is a landmark event for UC. Bob Pattillo is the most active impact investor globally, and we couldn't be more excited to have GMC join our shareholder group," Savage said.
Gray Matters Capital has participated in the capital raising round through its investment firm First Light Ventures. The latter's investment portfolio in India includes domestic services provider Bababjob.com and mobile payment startup Beam Money.
In 2008, Unitus Capital had raised $5.5 million (Rs 32.8 crore).
It also counts William S. Price, the founding partner of global private equity firm TPG, and Steven Funk, founder and chairman of real estate-focused Grand Marais Investments, among its investor list.
The investment bank, which works across sectors including microfinance, renewable energy and healthcare and education, creates financial structures such as non-convertible debentures, securitization and loan portfolio sales, for companies catering to the poor.
It has raised over $75 million of structure products for microfinance institutions such as SKS Microfinance, Janalakshmi Financial Services and Ujjivan Financial Services.
The investment bank has also advised a number of domestic ventures in raising fresh equity capital, including, Bangalore-based Forus Healthcare, which raised $5 million from Accel Partners and IDG Ventures in April last year.
"Because they are in India, and from India, the team at UC can spend time with entrepreneurs and fund managers... It's the difference between incremental increases and quantum leaps in creativity and performance," Robert Pattillo, founder of Gray Matters Capital said
Success in my Habit
Sunday, June 30, 2013
India-Israel trade pact will boost volume by $2 b : Envoy
Hyderabad: The India-Israel free trade agreement, which is close to being concluded, will have far reaching implications on both the countries going beyond trade volumes, according to Alon Ushpiz, Israeli Ambassador to India.
Speaking to reporters here, he said that the parleys between the two countries on FTA are currently under way in New Delhi. The agreement is likely to be concluded at the earliest.
“In fact, we were hoping to conclude this a few months ago. The FTA negotiations are pretty complex and take time to conclude as both the parties tend to be firm on their respective stands,” he explained.
The bilateral trade had shot up to about $5 billion in 2011, excluding services, with similar volumes both sides. This registered a slight slowdown in 2012. But the moment the FTA is signed, it could help accelerate trade volumes by at least $2 billion, he said.
IT FUND
Sectors such as information technology, research and development, high-tech areas have immense potential to grow bilaterally. In fact, there have been proposals to set up a separate fund for the IT sector between the two countries to encourage development of products.
Already, several cooperative initiatives are now underway between the two counties and also with some States in the area of agriculture technology, water management, treatment of sewerage and desalination.
ENERGY
Israel has gained considerable expertise in the energy sector, including renewables. We are in talks with the Ministry of New and Renewable Energy and expect to sign an agreement for mutual cooperation for sharing of technology, he said.
Referring to the cooperation in the agriculture sector, he said several projects have been initiated with States focussing on water management and improving productivity. These include technology sharing for production of vegetables, mango, citrus fruits, pomegranates and flowers.
“We are natural friends of water. We can offer technology and share learning with India. This could be through Government, public undertakings and also expertise in the private sector,” he said.
Speaking to reporters here, he said that the parleys between the two countries on FTA are currently under way in New Delhi. The agreement is likely to be concluded at the earliest.
“In fact, we were hoping to conclude this a few months ago. The FTA negotiations are pretty complex and take time to conclude as both the parties tend to be firm on their respective stands,” he explained.
The bilateral trade had shot up to about $5 billion in 2011, excluding services, with similar volumes both sides. This registered a slight slowdown in 2012. But the moment the FTA is signed, it could help accelerate trade volumes by at least $2 billion, he said.
IT FUND
Sectors such as information technology, research and development, high-tech areas have immense potential to grow bilaterally. In fact, there have been proposals to set up a separate fund for the IT sector between the two countries to encourage development of products.
Already, several cooperative initiatives are now underway between the two counties and also with some States in the area of agriculture technology, water management, treatment of sewerage and desalination.
ENERGY
Israel has gained considerable expertise in the energy sector, including renewables. We are in talks with the Ministry of New and Renewable Energy and expect to sign an agreement for mutual cooperation for sharing of technology, he said.
Referring to the cooperation in the agriculture sector, he said several projects have been initiated with States focussing on water management and improving productivity. These include technology sharing for production of vegetables, mango, citrus fruits, pomegranates and flowers.
“We are natural friends of water. We can offer technology and share learning with India. This could be through Government, public undertakings and also expertise in the private sector,” he said.
India-Turkey to enhance cooperation in renewable energy
New Delhi: India and Turkey have agreed to enhance their cooperation in the field of Renewable Energy. This was decided at a meeting held between the Turkish Energy Minister Mr. Taner Yildiz and Dr. Farooq Abdullah, Minister of New and Renewable Energy at Ankara today. Dr. Abdullah is visiting Turkey along with a high level delegation to explore greater opportunities for cooperation and collaboration between Indian and Turkey. Dr. Abdullah briefed his counterpart on the energy situation in India and India’s plans to add over 30 GW of renewable energy to its energy mix in the next 5 years. He also dwelt on the success of the wind programme as well as the significant cost reductions in solar energy through the Jawahar Lal Nehru National Solar Mission (JNNSM).
The Turkish leader said that Ankara hopes to diversify its energy mix by introducing a large component of renewables. It has considerable potential in wind, hydro, solar and geothermal energy. It imports over 90% of its oil, gas and fossil fuel requirement. Mr Yildiz recognized India’s considerable achievements and strengths in renewable energy and noted that India had made large strides in this field. He expressed the Turkish government’s desire to set up large generating as well as manufacturing capacities in renewable energy sources, particularly wind and solar. Dr. Abdullah offered India’s support and expertise to Turkey in setting up projects in wind, solar and hydropower. He also offered training slots in India to Turkish scientists, engineers and technicians through the ITEC programme. The Indian Minister expressed his country’s desire for a serious and meaningful cooperation with Turkey, especially in renewable energy and offered all possible assistance.
The Turkish Foreign Economic Relations Board (DEIK) and the Turkish Confederation of Businessmen and Industrialists (TUSCON) and Federation of Indian Chambers of Commerce and Industry (FICCI) later organized business seminars where business delegations from both countries deliberated in detail on the opportunities and prospects of renewable energy in Turkey. Both sides identified specific areas of scientific cooperation and possibilities of participation in renewable energy projects and investment opportunities.
Earlier in the day, the Minister visited Anitkabir- the Masoleum of Kemal Ataturk, the founder of modern Turkey and paid his respects.
Note: Photographs of the meeting are available on PIB website.
The Turkish leader said that Ankara hopes to diversify its energy mix by introducing a large component of renewables. It has considerable potential in wind, hydro, solar and geothermal energy. It imports over 90% of its oil, gas and fossil fuel requirement. Mr Yildiz recognized India’s considerable achievements and strengths in renewable energy and noted that India had made large strides in this field. He expressed the Turkish government’s desire to set up large generating as well as manufacturing capacities in renewable energy sources, particularly wind and solar. Dr. Abdullah offered India’s support and expertise to Turkey in setting up projects in wind, solar and hydropower. He also offered training slots in India to Turkish scientists, engineers and technicians through the ITEC programme. The Indian Minister expressed his country’s desire for a serious and meaningful cooperation with Turkey, especially in renewable energy and offered all possible assistance.
The Turkish Foreign Economic Relations Board (DEIK) and the Turkish Confederation of Businessmen and Industrialists (TUSCON) and Federation of Indian Chambers of Commerce and Industry (FICCI) later organized business seminars where business delegations from both countries deliberated in detail on the opportunities and prospects of renewable energy in Turkey. Both sides identified specific areas of scientific cooperation and possibilities of participation in renewable energy projects and investment opportunities.
Earlier in the day, the Minister visited Anitkabir- the Masoleum of Kemal Ataturk, the founder of modern Turkey and paid his respects.
Note: Photographs of the meeting are available on PIB website.
Friday, June 28, 2013
Google India ties up with Getit Infomedia
Hyderabad: Google India has tied up with Getit Infomedia to help SMEs in the South to go online.
Google’s Global Channel Sales Managing Director Todd Rows said that the company has so far tied up with 16 partners for this initiative with a total sales force of 3,000.
The company targets to reach out to 10 lakh SMEs. “We have so far covered 2 lakh and will cross 5-lakh mark by 2015,’’ he said.
Google’s Global Channel Sales Managing Director Todd Rows said that the company has so far tied up with 16 partners for this initiative with a total sales force of 3,000.
The company targets to reach out to 10 lakh SMEs. “We have so far covered 2 lakh and will cross 5-lakh mark by 2015,’’ he said.
Tata to execute Rs 70,000-crore infra projects in five years
Mumbai: The Tata Group today announced its three unlisted companies — Tata Housing, Tata Realty and Tata Projects — would execute projects worth at least Rs 70,000 crore in the next five years. These companies have projects worth Rs 15,000-20,000 crore under execution in 2013-14. Figures for the previous years are unavailable.
This is probably for the first time the companies of the group in the infrastructure segment have come together for a unified goal.
A Tata Group senior, who did not wish to be identified, said, “On internal forums, there is a lot more emphasis on the infrastructure business now.” Besides, there is a clear opportunity in the market to be tapped.
“There is a large opportunity for Tata Group companies to participate in sectors such as roads and highways, in which investments are expected to grow at 16 per cent a year,” says Siddhartha Roy, Tata Group’s economic advisor.
Tata Realty and Infrastructure, a wholly owned subsidiary of group holding firm Tata Sons, is scouting for new highway projects to benefit from increasing investment in road infrastructure. It constructed the 110-km Pune-Solapur four-lane project under the National Highways Development Programme this year.
The company acquired three road projects from infrastructure firm IVRCL this year. Now, it is looking at road projects worth Rs 7,500 crore in the next five years. “We are looking for more growth through projects in airport development and urban transport,” said Sanjay G Ubale, managing director and chief executive officer, Tata Realty.
This is probably for the first time the companies of the group in the infrastructure segment have come together for a unified goal.
A Tata Group senior, who did not wish to be identified, said, “On internal forums, there is a lot more emphasis on the infrastructure business now.” Besides, there is a clear opportunity in the market to be tapped.
“There is a large opportunity for Tata Group companies to participate in sectors such as roads and highways, in which investments are expected to grow at 16 per cent a year,” says Siddhartha Roy, Tata Group’s economic advisor.
Tata Realty and Infrastructure, a wholly owned subsidiary of group holding firm Tata Sons, is scouting for new highway projects to benefit from increasing investment in road infrastructure. It constructed the 110-km Pune-Solapur four-lane project under the National Highways Development Programme this year.
The company acquired three road projects from infrastructure firm IVRCL this year. Now, it is looking at road projects worth Rs 7,500 crore in the next five years. “We are looking for more growth through projects in airport development and urban transport,” said Sanjay G Ubale, managing director and chief executive officer, Tata Realty.
Customers Bancorp Inc to invest in Religare Enterprises
New Delhi: US-based Customers Bancorp Inc (CUBI) has agreed to invest $51 million (about Rs 300 crore) in various securities of banking licence aspirant Religare Enterprises Ltd. The investments will take place through a combination of primary and secondary market transactions.
The transactions involve a secondary purchase of Religare Enterprises equity shares from its promoters for $22 million, investment of $28 million in compulsory convertible warrants to be issued by Religare on a preferential basis, and a $1-million investment in new equity shares to be issued by Religare.
It is still not clear what Customers Bancorp’s eventual equity stake in Religare will be after these transactions.
The CUBI Board has already cleared the transactions. Religare’s board has now approved Customers Bancorp’s investments in the company.
Religare’s promoters — billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh — had recently agreed to shed a 22 per cent stake to enable the company to set up a non-operative financial holding company, in line with RBI guidelines for licensing of new banks in the private sector.
Of the 22 per cent, the transaction with CUBI will result in the promoters offloading about 2.2 percent, it is learnt.
“We are delighted to have Customers Bancorp Inc. as an investor at Religare. CUBI’s management team expertise in global banking will be extremely supportive in our banking foray. We are confident that the proposed association will further strengthen Religare’s endeavour to create a distinctive and diversified financial services conglomerate that believes in the Indian market’s long term growth potential,” said Sunil Godhwani, CMD, Religare Enterprises, in a statement on Wednesday.
The transactions involve a secondary purchase of Religare Enterprises equity shares from its promoters for $22 million, investment of $28 million in compulsory convertible warrants to be issued by Religare on a preferential basis, and a $1-million investment in new equity shares to be issued by Religare.
It is still not clear what Customers Bancorp’s eventual equity stake in Religare will be after these transactions.
The CUBI Board has already cleared the transactions. Religare’s board has now approved Customers Bancorp’s investments in the company.
Religare’s promoters — billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh — had recently agreed to shed a 22 per cent stake to enable the company to set up a non-operative financial holding company, in line with RBI guidelines for licensing of new banks in the private sector.
Of the 22 per cent, the transaction with CUBI will result in the promoters offloading about 2.2 percent, it is learnt.
“We are delighted to have Customers Bancorp Inc. as an investor at Religare. CUBI’s management team expertise in global banking will be extremely supportive in our banking foray. We are confident that the proposed association will further strengthen Religare’s endeavour to create a distinctive and diversified financial services conglomerate that believes in the Indian market’s long term growth potential,” said Sunil Godhwani, CMD, Religare Enterprises, in a statement on Wednesday.
Customers Bancorp Inc to invest in Religare Enterprises
New Delhi: US-based Customers Bancorp Inc (CUBI) has agreed to invest $51 million (about Rs 300 crore) in various securities of banking licence aspirant Religare Enterprises Ltd. The investments will take place through a combination of primary and secondary market transactions.
The transactions involve a secondary purchase of Religare Enterprises equity shares from its promoters for $22 million, investment of $28 million in compulsory convertible warrants to be issued by Religare on a preferential basis, and a $1-million investment in new equity shares to be issued by Religare.
It is still not clear what Customers Bancorp’s eventual equity stake in Religare will be after these transactions.
The CUBI Board has already cleared the transactions. Religare’s board has now approved Customers Bancorp’s investments in the company.
Religare’s promoters — billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh — had recently agreed to shed a 22 per cent stake to enable the company to set up a non-operative financial holding company, in line with RBI guidelines for licensing of new banks in the private sector.
Of the 22 per cent, the transaction with CUBI will result in the promoters offloading about 2.2 percent, it is learnt.
“We are delighted to have Customers Bancorp Inc. as an investor at Religare. CUBI’s management team expertise in global banking will be extremely supportive in our banking foray. We are confident that the proposed association will further strengthen Religare’s endeavour to create a distinctive and diversified financial services conglomerate that believes in the Indian market’s long term growth potential,” said Sunil Godhwani, CMD, Religare Enterprises, in a statement on Wednesday.
The transactions involve a secondary purchase of Religare Enterprises equity shares from its promoters for $22 million, investment of $28 million in compulsory convertible warrants to be issued by Religare on a preferential basis, and a $1-million investment in new equity shares to be issued by Religare.
It is still not clear what Customers Bancorp’s eventual equity stake in Religare will be after these transactions.
The CUBI Board has already cleared the transactions. Religare’s board has now approved Customers Bancorp’s investments in the company.
Religare’s promoters — billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh — had recently agreed to shed a 22 per cent stake to enable the company to set up a non-operative financial holding company, in line with RBI guidelines for licensing of new banks in the private sector.
Of the 22 per cent, the transaction with CUBI will result in the promoters offloading about 2.2 percent, it is learnt.
“We are delighted to have Customers Bancorp Inc. as an investor at Religare. CUBI’s management team expertise in global banking will be extremely supportive in our banking foray. We are confident that the proposed association will further strengthen Religare’s endeavour to create a distinctive and diversified financial services conglomerate that believes in the Indian market’s long term growth potential,” said Sunil Godhwani, CMD, Religare Enterprises, in a statement on Wednesday.
Reliance building on real estate interests in Kenya
Mumbai: Reliance Industries is expanding its presence in the real estate sector in Africa.
In its second major foray, the Mukesh Ambani-owned Reliance Industries has acquired 10 prime plots of land in Kenya’s capital, Nairobi, for around Rs 202 crore ($33.9 million).
The land, which has a developable area of about 1.2 million sq. ft., has been acquired for commercial and residential property development.
Reliance Industries’ (RIL) real estate interests in Africa started around 2008, through Delta Corporation East Africa, a local subsidiary.
According to people familiar with the development, RIL entered Africa’s real estate market with a few small buys. In 2011, the company extended its foray into Kenya’s real estate market with a series of office and residential property developments. The company bought prime plots of land in Nairobi, and developed them for residential and commercial use.
In some instances, it also sold or rented plots to global agencies, private firms and some government organisations.
For the 10 Nairobi plots, Reliance Industries is the major stakeholder with a 60 per cent shareholding, while Delta Corp has a 40 per cent holding.
Through Delta Corporation, RIL is currently building office towers in Nairobi’s Upper Hill and Westlands areas. Delta Corporation is also developing a multi-million dollar residential estate along the Athi River.
Nilesh Shah, executive director, Delta Corporation East Africa, could not be reached for comment.
In a recent annual report, Delta Corporation said it has four projects under development. The company owns around 27.5 acres of land.
Real estate major Knight Frank has ranked Nairobi as the city with the fastest growth rate in rentals for high-end commercial property in 2012.
In its second major foray, the Mukesh Ambani-owned Reliance Industries has acquired 10 prime plots of land in Kenya’s capital, Nairobi, for around Rs 202 crore ($33.9 million).
The land, which has a developable area of about 1.2 million sq. ft., has been acquired for commercial and residential property development.
Reliance Industries’ (RIL) real estate interests in Africa started around 2008, through Delta Corporation East Africa, a local subsidiary.
According to people familiar with the development, RIL entered Africa’s real estate market with a few small buys. In 2011, the company extended its foray into Kenya’s real estate market with a series of office and residential property developments. The company bought prime plots of land in Nairobi, and developed them for residential and commercial use.
In some instances, it also sold or rented plots to global agencies, private firms and some government organisations.
For the 10 Nairobi plots, Reliance Industries is the major stakeholder with a 60 per cent shareholding, while Delta Corp has a 40 per cent holding.
Through Delta Corporation, RIL is currently building office towers in Nairobi’s Upper Hill and Westlands areas. Delta Corporation is also developing a multi-million dollar residential estate along the Athi River.
Nilesh Shah, executive director, Delta Corporation East Africa, could not be reached for comment.
In a recent annual report, Delta Corporation said it has four projects under development. The company owns around 27.5 acres of land.
Real estate major Knight Frank has ranked Nairobi as the city with the fastest growth rate in rentals for high-end commercial property in 2012.
NASA to partner ISRO in India's Mars mission
Mumbai: The US would support India in its much-awaited Rs 450-crore Mars Orbiter Mission (MOM) slated for lift off from Sriharikota in October-November 2013.
"Nasa is providing the deep space navigation and tracking support to this mission during the non-visible period of the Indian Deep Space Network," said a US state department announcement.
The decision to cooperate was taken at the fourth meeting of the US-India joint working group on civil space co-operation held in Washington on March 21. But the details of the meeting were made public on Monday through the US-India joint fact sheet. Its release coincided with the Indo-US Strategic dialogue, and the talks between Isro chairman K Radhakrishnan and Nasa administrator Charles Bolden in New Delhi.
Nasa will provide support from its facilities at Goldstone in the US, Madrid in Spain and Canberra in Australia.
The teaming up for the Mars mission assumes significance in the context of Bolden calling for strengthened co-operation in this programme, when he addressed Isro staffers nationwide on Tuesday afternoon from the Ahmedabad-based Space Applications Centre.
The American state department document also stated that both countries have "agreed to co-operate in potential future missions to the moon and Mars".
Isro officials have not ruled out a second mission to Mars, which they said will have more scientific content. TOI has also learnt that Nasa was keen on participating with Isro in the analysis of data from the Methane Sensor For Mars, which is one of the five instruments on board the present Indian Mars orbiter.
But Isro has not given any firm response so far.
"Nasa is providing the deep space navigation and tracking support to this mission during the non-visible period of the Indian Deep Space Network," said a US state department announcement.
The decision to cooperate was taken at the fourth meeting of the US-India joint working group on civil space co-operation held in Washington on March 21. But the details of the meeting were made public on Monday through the US-India joint fact sheet. Its release coincided with the Indo-US Strategic dialogue, and the talks between Isro chairman K Radhakrishnan and Nasa administrator Charles Bolden in New Delhi.
Nasa will provide support from its facilities at Goldstone in the US, Madrid in Spain and Canberra in Australia.
The teaming up for the Mars mission assumes significance in the context of Bolden calling for strengthened co-operation in this programme, when he addressed Isro staffers nationwide on Tuesday afternoon from the Ahmedabad-based Space Applications Centre.
The American state department document also stated that both countries have "agreed to co-operate in potential future missions to the moon and Mars".
Isro officials have not ruled out a second mission to Mars, which they said will have more scientific content. TOI has also learnt that Nasa was keen on participating with Isro in the analysis of data from the Methane Sensor For Mars, which is one of the five instruments on board the present Indian Mars orbiter.
But Isro has not given any firm response so far.
Oil India, OVL agree to buy stake in Mozambique gas field for $2.47 billion
Mumbai: State exploration firms ONGC and Oil IndiaBSE 2.23 % (OIL) have signed a $2.48-billion deal to acquire 10% stake from Videocon in a giant gas project in Mozambique, which may help ship an estimated 6 million tonnes a year of liquefied natural gas (LNG) to India.
ONGCBSE -0.18 % Videsh (OVL), the overseas arm of the state explorer, said the deal marks its entry into a world-class project with significant upside potential, and would help it achieve long-term production targets of 20 million tonnes of oil equivalent by 2018 and 60 million tonnes by 2030.
"Considering the growing importance of natural gas in the primary energy basket, this acquisition is a significant step by OVL/ONGC group towards the energy security of our country," said OVL Chairman Sudhir Vasudeva.
This is ONGC's third significant global acquisition since it bought Hess Corp's 2.7% stake in Azerbaijan's largest oil field and an associated pipeline for $1 billion. It also signed a deal to buy ConocoPhillips's 8.4% stake in Kazakhstan's Kashagan project for $5 billion last November, but the deal is facing obstacles from China.
Oil India officials said gas from the project would be shipped to India. "Gas production from the Rovuma basin should commence by 2018 with an initial production of 10 million tonnes per annum, which will go up to around 30 mtpa by 2024. So, with our 10% stake now and Bharat Petroleum's 10% stake in the basin, we can easily ship close to 6 mtpa to India," said Oil India CFO T Ananth Kumar.
"Over the next five years, we will be investing an additional $2.5 billion in this project as we will also be partnering in the upcoming LNG infrastructure," he said.
He also said that Oil India will be borrowing abroad to fund this acquisition, "We will be raising around $800 million of the total $1 billion that we will be investing from overseas investors and will exercise the external commercial borrowing option and also launch an overseas bond issue," he added.
"We are satisfied with this valuation, as in the Mozambique energy asset our entire business model was to build value and exit, but this does not mean that we will exit our Brazil assets also. Decision to use this cash to retire our debt will be taken shortly by our advisors Standard Chartered Bank," said VideoconBSE 5.30 % Industries CMD Venugopal Dhoot.
Bankers involved in the transaction lauded the deal. "This is a great transaction and reinforces Videocon's track record of investing in world-class assets across Ravva, Brazil and East Africa. For OVL and OIL, this provides an entry into a very strategic asset," said Gaurav Mehta, Executive Director, UBS, Videocon's Advisor.
"From a logistics point of view, we are the most natural home market for this gas, and that suits the energy security objective of the Indian consortium," said Raj Balakrishnan, head of M&A at Bank of America Merrill Lynch, which advised OVL.
ONGCBSE -0.18 % Videsh (OVL), the overseas arm of the state explorer, said the deal marks its entry into a world-class project with significant upside potential, and would help it achieve long-term production targets of 20 million tonnes of oil equivalent by 2018 and 60 million tonnes by 2030.
"Considering the growing importance of natural gas in the primary energy basket, this acquisition is a significant step by OVL/ONGC group towards the energy security of our country," said OVL Chairman Sudhir Vasudeva.
This is ONGC's third significant global acquisition since it bought Hess Corp's 2.7% stake in Azerbaijan's largest oil field and an associated pipeline for $1 billion. It also signed a deal to buy ConocoPhillips's 8.4% stake in Kazakhstan's Kashagan project for $5 billion last November, but the deal is facing obstacles from China.
Oil India officials said gas from the project would be shipped to India. "Gas production from the Rovuma basin should commence by 2018 with an initial production of 10 million tonnes per annum, which will go up to around 30 mtpa by 2024. So, with our 10% stake now and Bharat Petroleum's 10% stake in the basin, we can easily ship close to 6 mtpa to India," said Oil India CFO T Ananth Kumar.
"Over the next five years, we will be investing an additional $2.5 billion in this project as we will also be partnering in the upcoming LNG infrastructure," he said.
He also said that Oil India will be borrowing abroad to fund this acquisition, "We will be raising around $800 million of the total $1 billion that we will be investing from overseas investors and will exercise the external commercial borrowing option and also launch an overseas bond issue," he added.
"We are satisfied with this valuation, as in the Mozambique energy asset our entire business model was to build value and exit, but this does not mean that we will exit our Brazil assets also. Decision to use this cash to retire our debt will be taken shortly by our advisors Standard Chartered Bank," said VideoconBSE 5.30 % Industries CMD Venugopal Dhoot.
Bankers involved in the transaction lauded the deal. "This is a great transaction and reinforces Videocon's track record of investing in world-class assets across Ravva, Brazil and East Africa. For OVL and OIL, this provides an entry into a very strategic asset," said Gaurav Mehta, Executive Director, UBS, Videocon's Advisor.
"From a logistics point of view, we are the most natural home market for this gas, and that suits the energy security objective of the Indian consortium," said Raj Balakrishnan, head of M&A at Bank of America Merrill Lynch, which advised OVL.
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