Bangalore: As its brand new A320 took off from Kempegowda International Airport in Bangalore and headed to Goa, AirAsia India became the country’s latest domestic airline. With its maiden flight, AirAsia India became the country’s fourth low-cost carrier, after IndiGo, SpiceJet and GoAir.
CEO Mittu Chandilya told newspersons that Bangalore would be the airline’s operational hub while Chennai will remain the corporate and maintenance base.
Chandilya noted that the high tax rate of 29 per cent on aviation turbine fuel levied by the Karnataka Government is a deterrent and the airline has requested the State Government to reduce it.
AirAsia will operate its next flight on June 19, from Bangalore to Chennai. Two more new A320s will join the fleet in a month or two. The budget carrier plans to add an aircraft a month to its fleet over the next 10 months.
Focus on tier-2 cities
It will add nine new destinations in the next few months, mostly in the south, including Mangalore, Hubli and Jaipur, where A320s can land. During the next three years, the airline plans to expand the network to 30 cities.
“Our focus will be on tier-2 cities and we are not keen on ‘trunk’ routes (to Mumbai, Delhi or Kolkata),” Chandilya said.
He said the airline sold all 180 seats within minutes of opening bookings on May 30. As a promotional offer, the airline sold 40 per cent of the tickets at Rs. 990, 10 per cent at Rs. 5 per ticket and the balance for up to Rs. 1,900 a ticket.
The 300-staff airline has shifted its pilots, crew and office to Bangalore. “Over the years we will invest and develop our hub here. Bangalore’s airport is excellent. I am interested in being here. I have moved the entire team here and am putting in contracts that are very Bangalore-centric.”
The Indian venture of the Malaysian airline has an initial investment of Rs. 90-crore ($15-million) from Air Asia Berhad (49 per cent); Tata Sons (30 per cent); and Telstra Tradeplace (21 per cent); it will go up to $20 million (around Rs. 120 crore), the CEO said.
Eyeing quick break-even
On recovering the investment, he said: “We will break even in four months… Our fares will be 35 per cent lower than the market rat. At this rate, we believe we can sustain and be profitable.”
AirAsia’s Indian venture was approved in February 2013. The carrier got its first plane in March this year and its operating licence in May.
Success in my Habit
Sunday, June 15, 2014
India to be Ford’s centre piece for small cars
Chennai: With 60 per cent of the cars sold worldwide being compacts and sedans, “India is the centre piece for small cars” for Ford, according to Alan Mulally, President and CEO, Ford Motor Company.
More than half the cars sold globally are in the Ford Focus and Fiesta sized segment. So, the Indian customer and the company’s design team here are important.
Ford has decided its Indian operations will be the export hub. It now exports to over 50 countries and “we see that increasing over time,” he said in an interaction with media persons.
Mulally, who retires in July after eight years at the US-based automobile company, said for the first time, Ford used a single platform in the B-sized segment to offer the Figo and the EcoSport, a hatchback and a small SUV. This flexibility is an inherent part of Ford’s strategy worldwide.
Small cars are no longer about being ‘cheap and cheerful.’ Customers expect them to offer safety, quality and fuel efficiency as much as cars in any other segment, according to Mulally.
The company has nine basic platforms that can cater to over 85 per cent of the volume of vehicles sold globally covering compact cars to SUVs and wagons. It can bring to India any of its offerings including the largest of sedans in the market, if the customers want it.
Ford’s investments in India and China, the fastest growing markets, have been ‘tremendous’. “You are our future,” he said.
More than half the cars sold globally are in the Ford Focus and Fiesta sized segment. So, the Indian customer and the company’s design team here are important.
Ford has decided its Indian operations will be the export hub. It now exports to over 50 countries and “we see that increasing over time,” he said in an interaction with media persons.
Mulally, who retires in July after eight years at the US-based automobile company, said for the first time, Ford used a single platform in the B-sized segment to offer the Figo and the EcoSport, a hatchback and a small SUV. This flexibility is an inherent part of Ford’s strategy worldwide.
Small cars are no longer about being ‘cheap and cheerful.’ Customers expect them to offer safety, quality and fuel efficiency as much as cars in any other segment, according to Mulally.
The company has nine basic platforms that can cater to over 85 per cent of the volume of vehicles sold globally covering compact cars to SUVs and wagons. It can bring to India any of its offerings including the largest of sedans in the market, if the customers want it.
Ford’s investments in India and China, the fastest growing markets, have been ‘tremendous’. “You are our future,” he said.
Industry grows at fastest rate in 13 months
New Delhi: After falling for two months, industrial production grew at a 13-month-high rate of 3.4 per cent in April, driven mainly by electricity generation and manufacturing.
The numbers, if sustained, could push up economic growth, stuck below five per cent for two years now. However, economists are still not certain about the recovery in manufacturing, as it is driven by volatile capital goods.
The country’s industrial output, as measured by the Index of Industrial Production (IIP), had declined 0.5 per cent in March and 1.7 per cent in February, official data showed on Thursday.
Industrial output grew just 1.5 per cent in April last year and contracted 1.3 per cent in April the previous year. Economists said the slow IIP growth rate in April last year magnified the expansion in the month this year — in what is technically referred to as the base effect.
Electricity generation in April this year surged at a seven-month-high rate of 11.9 per cent, compared with 5.3 per cent the previous month. Mining grew 1.2 per cent, after contracting 0.3 per cent the previous month.
Manufacturing, which has the highest weight of 75.5 per cent on IIP, grew at 2.6 per cent, its fastest in nine months. Had it not been for a revision in the January data — from a 0.5 per cent contraction to a 0.2 per cent rise — manufacturing output would have declined for six months before April this year. Its production grew 1.8 per cent in April 2013 and shrank 1.8 per cent in April 2012.
However, economists remain concerned. “Manufacturing activity is still a concern, with no significant growth trend evolving within IIP,” said Debopam Chaudhuri, chief economist at Zyfin Research.
Economists want to watch the IIP data for a few months more before they can declare a revival, as the index is prone to volatility and is often revised. Volatility is particularly true of capital goods, which spurted 15.7 per cent in April after contracting in the previous four months. “The only caveat to the good news is that all of the upward surprise came from the notoriously lumpy and volatile capital goods sector,” said JPMorgan Economist Sajjid Chinoy.
Arun Singh, senior economist, Dun & Bradstreet, said he would look at IIP data for four months to confirm whether industry was recovering.
The capital goods segment, with a weight of 8.8 per cent on IIP, was responsible a 1.38 per cent rise in industrial production in April. Most of the push came from electrical machinery & equipment sector, which grew 66 per cent in the month.
With investment activity yet to display a broad-based pick-up, it was unclear whether the double-digit growth in the capital goods index would persist in the ongoing quarter, said ICRA Senior Economist Aditi Nayar.
Sustaining momentum in industrial production would depend on the government’s resolve to fast-track stalled projects, revive the investment pipeline and lift consumption demand by improving growth prospects, research firm CRISIL said in an analysis.
Fourteen of the 22 industry groups on the index posted growth in April, against 10 the previous month.
However, growth skipped consumer goods. Consumer durables have been declining for over a year now and in April non-durables also contracted. Consumer durables declined 7.6 per cent in April and consumer non-durables fell 3.3 per cent. Overall, consumer goods declined 5.1 per cent in April.
"Fast-moving consumer goods have also started bearing the brunt of a persistently high inflation rate,” Singh said. The fall in consumer non-durables may also be due to the base effect of 11.3 per cent growth in April 2013.
The numbers, if sustained, could push up economic growth, stuck below five per cent for two years now. However, economists are still not certain about the recovery in manufacturing, as it is driven by volatile capital goods.
The country’s industrial output, as measured by the Index of Industrial Production (IIP), had declined 0.5 per cent in March and 1.7 per cent in February, official data showed on Thursday.
Industrial output grew just 1.5 per cent in April last year and contracted 1.3 per cent in April the previous year. Economists said the slow IIP growth rate in April last year magnified the expansion in the month this year — in what is technically referred to as the base effect.
Electricity generation in April this year surged at a seven-month-high rate of 11.9 per cent, compared with 5.3 per cent the previous month. Mining grew 1.2 per cent, after contracting 0.3 per cent the previous month.
Manufacturing, which has the highest weight of 75.5 per cent on IIP, grew at 2.6 per cent, its fastest in nine months. Had it not been for a revision in the January data — from a 0.5 per cent contraction to a 0.2 per cent rise — manufacturing output would have declined for six months before April this year. Its production grew 1.8 per cent in April 2013 and shrank 1.8 per cent in April 2012.
However, economists remain concerned. “Manufacturing activity is still a concern, with no significant growth trend evolving within IIP,” said Debopam Chaudhuri, chief economist at Zyfin Research.
Economists want to watch the IIP data for a few months more before they can declare a revival, as the index is prone to volatility and is often revised. Volatility is particularly true of capital goods, which spurted 15.7 per cent in April after contracting in the previous four months. “The only caveat to the good news is that all of the upward surprise came from the notoriously lumpy and volatile capital goods sector,” said JPMorgan Economist Sajjid Chinoy.
Arun Singh, senior economist, Dun & Bradstreet, said he would look at IIP data for four months to confirm whether industry was recovering.
The capital goods segment, with a weight of 8.8 per cent on IIP, was responsible a 1.38 per cent rise in industrial production in April. Most of the push came from electrical machinery & equipment sector, which grew 66 per cent in the month.
With investment activity yet to display a broad-based pick-up, it was unclear whether the double-digit growth in the capital goods index would persist in the ongoing quarter, said ICRA Senior Economist Aditi Nayar.
Sustaining momentum in industrial production would depend on the government’s resolve to fast-track stalled projects, revive the investment pipeline and lift consumption demand by improving growth prospects, research firm CRISIL said in an analysis.
Fourteen of the 22 industry groups on the index posted growth in April, against 10 the previous month.
However, growth skipped consumer goods. Consumer durables have been declining for over a year now and in April non-durables also contracted. Consumer durables declined 7.6 per cent in April and consumer non-durables fell 3.3 per cent. Overall, consumer goods declined 5.1 per cent in April.
"Fast-moving consumer goods have also started bearing the brunt of a persistently high inflation rate,” Singh said. The fall in consumer non-durables may also be due to the base effect of 11.3 per cent growth in April 2013.
68% teens shop online in cities, 91% in mini-metros own mobiles
Mumbai: Almost seven out of 10 urban teenagers shop online and teenagers in mini-metros are ahead of their metro counterparts in adopting digital lifestyles, found a survey. The survey, which aimed to study the digital preferences of high school students, also found over 48% respondents had bought clothes and accessories online.
The TCS Gen-Y 2013-14 survey covered 18,196 students aged between 12-18 years across 14 cities in the country. Over 68% respondents said they shop online, compared to 37% last year. "While the number of teenagers who shop online has definitely increased, the difference in what they are shopping is stark. Last year, they were shopping for low value things like movie tickets and books, but this year clothes and accessories have taken the lead," the survey said.
While over 82% teenagers own a mobile phone in the metros, the numbers are higher in mini-metros at 91%. Similarly, teenagers from mini-metros also lead in the use of social media for school projects, with over 66% agreeing it helps them perform better in studies compared to 60% in metros. "Students have started using the internet for self learning and projects. Classrooms are taking that ahead and holding discussions," said Ajoy Mukherjee, the company's executive vice-president and global head of human resources.
Mobile phones and tablets were the most popular gadgets with teenagers, while Facebook continued to remain their most preferred social network. Over 85.8% of respondents were registered on it and more than 21% posted on the site everyday.
However, micro-blogging site twitter was not too popular with the teenagers. Over 31% respondents said they had a twitter account, only 2.7% said it was their most preferred social network. "The low popularity may be because the teenagers find it more complex," the survey said. Over 87% think social media has made them aware of current affairs.
The survey, which also looked at the career preferences of teens, found IT and engineering were their top two choices but observed a growing interest in media and entertainment compared to last year. Almost 10% respondents picked media or entertainment as their top three preferred choices.
The TCS Gen-Y 2013-14 survey covered 18,196 students aged between 12-18 years across 14 cities in the country. Over 68% respondents said they shop online, compared to 37% last year. "While the number of teenagers who shop online has definitely increased, the difference in what they are shopping is stark. Last year, they were shopping for low value things like movie tickets and books, but this year clothes and accessories have taken the lead," the survey said.
While over 82% teenagers own a mobile phone in the metros, the numbers are higher in mini-metros at 91%. Similarly, teenagers from mini-metros also lead in the use of social media for school projects, with over 66% agreeing it helps them perform better in studies compared to 60% in metros. "Students have started using the internet for self learning and projects. Classrooms are taking that ahead and holding discussions," said Ajoy Mukherjee, the company's executive vice-president and global head of human resources.
Mobile phones and tablets were the most popular gadgets with teenagers, while Facebook continued to remain their most preferred social network. Over 85.8% of respondents were registered on it and more than 21% posted on the site everyday.
However, micro-blogging site twitter was not too popular with the teenagers. Over 31% respondents said they had a twitter account, only 2.7% said it was their most preferred social network. "The low popularity may be because the teenagers find it more complex," the survey said. Over 87% think social media has made them aware of current affairs.
The survey, which also looked at the career preferences of teens, found IT and engineering were their top two choices but observed a growing interest in media and entertainment compared to last year. Almost 10% respondents picked media or entertainment as their top three preferred choices.
Overseas funds rushing to invest in India, over $5 billion invested in last 8 months
Mumbai: Several sovereign wealth funds (SWF) and overseas pension funds are rushing to invest in India, driven by hopes of economic recovery under a new stable government. At least three sovereign funds from West Asia have invested over $5 billion in the past eight months and one global pension fund has committed to invest $450 million.
Two other funds are scouting for investments in India's real estate and infrastructure developers.
"Risk of returns are out of the way and these funds can invest capital for longer tenure," said the head of a realty fund, which has received investments from two SWFs in West Asia.
"They have lesser redemption pressure unlike private equity funds, which have to give returns to their investors in few years."
Private equity (PE) experts say a trend is visible of both SWF and pension funds investing heavily in the past six months. They say they expect to see more such investments this year.
"SWF and pension funds will be the largest investors in the next one year, while the fund of funds and PE funds will stay away after being caught in the two cycles of economic slowdown," said a senior PE fund manager, whose fund runs a distressed asset fund jointly with an American bulge bracket fund.
Abu Dhabi Investment Authority (ADIA), which had invested roughly $500 million in the past decade, has also upped the ante. Abu Dhabi power company Taqa, owned by ADIA, purchased a 51% stake in Jaypee Group's thermal power projects for $1.5 billion jointly with a Canadian pension fund and local PE IDFC Alternatives Fund.
Last year, ADIA also appointed Suresh Sadasivan as head of its internal equities department for Asia excluding Japan, responsible for developing strategy, managing risk and overseeing management of portfolios.
Oman's State General Reserve Fund, Government of Singapore Investment Corp (GIC) and Temasek committed $200 million investment in a real estate fund run by India's biggest mortgage lender, Housing Development Finance Corporation.
In May last year, Qatar paid $1.26 billion for a 5% stake in India's largest mobile telephony by customers Bharti Airtel.
Canadian Pension Plan Investment Board, which manages $218.1 billion of assets, formed two joint ventures in November last year.
It formed a joint venture with real estate developer Shapoorji Pallonji Group to invest in commercial real estate in India, and formed an equal real estate finance company with billionaire Ajay Piramal group's Piramal Enterprises, which will specialise in debt and structured finance. The fund committed $200 million in the first and $250 million in the second venture. "We will be deploying more and more capital to India and that is fungible.
We are constantly moving our capital, so it can't be seen as what happens to one dollar invested in one project," Mark Wiseman, president and CEO at Canada Pension Plan Investment Board, said after announcing its real estate venture. The fund opened its second office in India outside Canada after Hong Kong.
Consultants say the fund flow to India will rise as Japan allowed its $1.26 trillion pension fund to invest in alternate assets overseas.
Two other funds are scouting for investments in India's real estate and infrastructure developers.
"Risk of returns are out of the way and these funds can invest capital for longer tenure," said the head of a realty fund, which has received investments from two SWFs in West Asia.
"They have lesser redemption pressure unlike private equity funds, which have to give returns to their investors in few years."
Private equity (PE) experts say a trend is visible of both SWF and pension funds investing heavily in the past six months. They say they expect to see more such investments this year.
"SWF and pension funds will be the largest investors in the next one year, while the fund of funds and PE funds will stay away after being caught in the two cycles of economic slowdown," said a senior PE fund manager, whose fund runs a distressed asset fund jointly with an American bulge bracket fund.
Abu Dhabi Investment Authority (ADIA), which had invested roughly $500 million in the past decade, has also upped the ante. Abu Dhabi power company Taqa, owned by ADIA, purchased a 51% stake in Jaypee Group's thermal power projects for $1.5 billion jointly with a Canadian pension fund and local PE IDFC Alternatives Fund.
Last year, ADIA also appointed Suresh Sadasivan as head of its internal equities department for Asia excluding Japan, responsible for developing strategy, managing risk and overseeing management of portfolios.
Oman's State General Reserve Fund, Government of Singapore Investment Corp (GIC) and Temasek committed $200 million investment in a real estate fund run by India's biggest mortgage lender, Housing Development Finance Corporation.
In May last year, Qatar paid $1.26 billion for a 5% stake in India's largest mobile telephony by customers Bharti Airtel.
Canadian Pension Plan Investment Board, which manages $218.1 billion of assets, formed two joint ventures in November last year.
It formed a joint venture with real estate developer Shapoorji Pallonji Group to invest in commercial real estate in India, and formed an equal real estate finance company with billionaire Ajay Piramal group's Piramal Enterprises, which will specialise in debt and structured finance. The fund committed $200 million in the first and $250 million in the second venture. "We will be deploying more and more capital to India and that is fungible.
We are constantly moving our capital, so it can't be seen as what happens to one dollar invested in one project," Mark Wiseman, president and CEO at Canada Pension Plan Investment Board, said after announcing its real estate venture. The fund opened its second office in India outside Canada after Hong Kong.
Consultants say the fund flow to India will rise as Japan allowed its $1.26 trillion pension fund to invest in alternate assets overseas.
Japan's Meiji Holdings acquires Medreich for Rs 1,720 Cr
Mumbai: Japanese pharmaceutical major Meiji Holdings has bought out Temasek-backed Medreich for $290 million (Rs 1,720 crore), the company informed Tokyo Stock Exchange on Wednesday, marking the first inbound investment in the Indian pharmaceutical sector by a Japanese company after Daiichi Sankyo's ill-fated acquisition of Ranbaxy in 2008.
Temasek, the private equity arm of the Singapore government, had invested Rs 109 crore in 2005 for a 25 per cent stake in Medreich which manufactures therapeutic generic and branded drugs. Temasek has made almost a four-fold return on its investment in the company by getting around Rs 430 crore from this transaction.
"Meiji, through its operating subsidiaries, Meiji Seika Pharma, has bought out 100 per cent stake in Medreich as it plans to enter the Indian market," said a person with direct knowledge of the deal. As part of the Japanese company's 2020 vision, it wants to expand to newer geographies, the person explained.
Medreich sells generic pharmaceuticals products to Europe, Asia, and Africa. Its main business partners include GSK, Adcock Ingram, Pfizer, Sanofi, Novartis and Mylan, among others. "The Meiji Group wants to enter the global generics field, particularly in Asia and emerging countries," the company's release in Japanese read.
The $5-billion Meiji Group's acquisition signals a return of longterm confidence in the Indian pharmaceutical sector. Last month, in an all-share transaction, Sun Pharmaceutical Industries bought generic drugmaker Ranbaxy Laboratories for $3.2 billion. Daiichi had paid $4.2 billion for a 69 per cent stake in Ranbaxy in 2008.
"If multinational companies have to make a mark in India, they cannot grow organically, and if they have to acquire companies, they will trigger the foreign direct investment issue," said Sujay Shetty, head of life sciences at consultancy PwC when the Ranbaxy-Sun Pharma deal was announced.
Investment bank JP Morgan was the advisor to Meiji Holdings and NM Rothschild advised the investors and promoters of Medreich. Medreich, founded in 1976 by Rajeev Mehta, Keith De Souza and CP Bothra, has the capability to produce over 500 products with an R& D team of over 75 scientists. The company has been profitable since its inception. The company's branding and name will not be changed post the acquisition, Meiji Holdings has said.
For Temasek, this marks a blockbuster exit from an Indian company. Temasek has made several large private equity investments in India, including in Bharti Airtel, Tata Teleservices in Maharashtra, GMR Energy, National Stock Exchange and Godrej Consumer Products.
Temasek, the private equity arm of the Singapore government, had invested Rs 109 crore in 2005 for a 25 per cent stake in Medreich which manufactures therapeutic generic and branded drugs. Temasek has made almost a four-fold return on its investment in the company by getting around Rs 430 crore from this transaction.
"Meiji, through its operating subsidiaries, Meiji Seika Pharma, has bought out 100 per cent stake in Medreich as it plans to enter the Indian market," said a person with direct knowledge of the deal. As part of the Japanese company's 2020 vision, it wants to expand to newer geographies, the person explained.
Medreich sells generic pharmaceuticals products to Europe, Asia, and Africa. Its main business partners include GSK, Adcock Ingram, Pfizer, Sanofi, Novartis and Mylan, among others. "The Meiji Group wants to enter the global generics field, particularly in Asia and emerging countries," the company's release in Japanese read.
The $5-billion Meiji Group's acquisition signals a return of longterm confidence in the Indian pharmaceutical sector. Last month, in an all-share transaction, Sun Pharmaceutical Industries bought generic drugmaker Ranbaxy Laboratories for $3.2 billion. Daiichi had paid $4.2 billion for a 69 per cent stake in Ranbaxy in 2008.
"If multinational companies have to make a mark in India, they cannot grow organically, and if they have to acquire companies, they will trigger the foreign direct investment issue," said Sujay Shetty, head of life sciences at consultancy PwC when the Ranbaxy-Sun Pharma deal was announced.
Investment bank JP Morgan was the advisor to Meiji Holdings and NM Rothschild advised the investors and promoters of Medreich. Medreich, founded in 1976 by Rajeev Mehta, Keith De Souza and CP Bothra, has the capability to produce over 500 products with an R& D team of over 75 scientists. The company has been profitable since its inception. The company's branding and name will not be changed post the acquisition, Meiji Holdings has said.
For Temasek, this marks a blockbuster exit from an Indian company. Temasek has made several large private equity investments in India, including in Bharti Airtel, Tata Teleservices in Maharashtra, GMR Energy, National Stock Exchange and Godrej Consumer Products.
Brookfield to buy Unitech subsidiary for Rs 2,000 crore
New Delhi: Canada-based Brookfield Property has entered into an agreement to acquire Candor Investments, a subsidiary of Unitech Corporate Park (UCP), for about Rs 2,000 crore.
In an announcement to London Stock Exchange, UCP said it had entered into an agreement with an affiliate of Brookfield Property Partners for the sale and purchase of the entire issued share capital of Candor, subject to conditions, for a cash consideration of about £205.9 million (about Rs 2,034 crore).
Through its subsidiaries, Candor Investments holds 60 per cent stake in six properties—two in Gurgaon, three in Noida and one in Kolkata; the Unitech group owns the rest of the equity.
LIFE SAVER
Candor Investments holds 60% stake in 6 properties; the Unitech group owns the rest of the equity
Unitech said of a total of 6 special economic zones, it had transferred its interest in four to an independent third party
The amount raised through the deal will likely be used to reduce Unitech’s debt, at Rs 6,200 crore in 2013-14
In a separate statement to the BSE, Unitech said of a total of six special economic zones , it had transferred its interest in four (the most developed) to an independent third party. As part of the transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure there is no impact on tenants and other stakeholders.
Sources privy to the deal said Unitech sold the stake for about Rs 1,500 crore, adding it was likely most of the funds would be used to refinance the company’s debt. For 2013-14, Unitech’s debt stood at Rs 6,200 crore.
In April this year, UCP had said a party had expressed interest in acquiring its subsidiary Candor Investments, the holding company for UCP’s property interests.
After completion of the deal, UCP is expected to have cash resources to provide shareholders capital returns of about 56 pence/ordinary share in aggregate, a 45 per cent premium to the share price on April 2 and a 79.2 per cent premium to its lowest share price in the last 12 months (September 25, 2013).
The deal will require the approval of shareholders, in accordance with the AIM Rules for Companies. It will also seek shareholder approval to adopt a new investing policy to return capital to shareholders, following the completion of the Candor sale. In this regard, an extraordinary general meeting is scheduled to be held on June 27.
Donald Lake, chairman of UCP, said, “The offer for UCP’s property interests from Brookfield at more than the latest book valuation reflects the hard work put in through recent years to let the office space and grow income to achieve the best possible price on behalf of investors in the company. The independent directors believe the proposed sale represents a very attractive opportunity for investors to realise strong value from the properties and facilitate a distribution of the proceeds.”
On Wednesday, the Unitech stock closed at Rs 33.95 on BSE, down 7.11 per cent.
In an announcement to London Stock Exchange, UCP said it had entered into an agreement with an affiliate of Brookfield Property Partners for the sale and purchase of the entire issued share capital of Candor, subject to conditions, for a cash consideration of about £205.9 million (about Rs 2,034 crore).
Through its subsidiaries, Candor Investments holds 60 per cent stake in six properties—two in Gurgaon, three in Noida and one in Kolkata; the Unitech group owns the rest of the equity.
LIFE SAVER
Candor Investments holds 60% stake in 6 properties; the Unitech group owns the rest of the equity
Unitech said of a total of 6 special economic zones, it had transferred its interest in four to an independent third party
The amount raised through the deal will likely be used to reduce Unitech’s debt, at Rs 6,200 crore in 2013-14
In a separate statement to the BSE, Unitech said of a total of six special economic zones , it had transferred its interest in four (the most developed) to an independent third party. As part of the transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure there is no impact on tenants and other stakeholders.
Sources privy to the deal said Unitech sold the stake for about Rs 1,500 crore, adding it was likely most of the funds would be used to refinance the company’s debt. For 2013-14, Unitech’s debt stood at Rs 6,200 crore.
In April this year, UCP had said a party had expressed interest in acquiring its subsidiary Candor Investments, the holding company for UCP’s property interests.
After completion of the deal, UCP is expected to have cash resources to provide shareholders capital returns of about 56 pence/ordinary share in aggregate, a 45 per cent premium to the share price on April 2 and a 79.2 per cent premium to its lowest share price in the last 12 months (September 25, 2013).
The deal will require the approval of shareholders, in accordance with the AIM Rules for Companies. It will also seek shareholder approval to adopt a new investing policy to return capital to shareholders, following the completion of the Candor sale. In this regard, an extraordinary general meeting is scheduled to be held on June 27.
Donald Lake, chairman of UCP, said, “The offer for UCP’s property interests from Brookfield at more than the latest book valuation reflects the hard work put in through recent years to let the office space and grow income to achieve the best possible price on behalf of investors in the company. The independent directors believe the proposed sale represents a very attractive opportunity for investors to realise strong value from the properties and facilitate a distribution of the proceeds.”
On Wednesday, the Unitech stock closed at Rs 33.95 on BSE, down 7.11 per cent.
ZTE to set up network operating centre in India
Shanghai: Chinese telecom equipment maker ZTE Corporation plans to set up a Global Network Operating Centre (GNOC) in India.
The centre will manage the networks of multiple telecom carriers across Asia and Africa. Similar centres have been set up in India by rival firms, including Nokia Solutions and Networks and Ericsson. ZTE’s centre would be one of its major GNOCs in the world that will take care of managed service requirement of operators across the regions. Currently, the company has centres in China and Romania, which manages Chinese and European clients, respectively.
“ZTE is in discussions with several telecom operators in Indonesia, Malaysia and Nigeria to manage their networks from a future GNOC in India for both fixed line as well as wireless networks,” Xu Huijun, Senior Vice-President — Wireless Business, ZTE Corporation, told Business Line.
Speaking on the sidelines of Mobile Asia Expo here, he said the centre would also lead to more hirings in India, which it would decide once the plan is finalised.
The centre will manage the networks of multiple telecom carriers across Asia and Africa. Similar centres have been set up in India by rival firms, including Nokia Solutions and Networks and Ericsson. ZTE’s centre would be one of its major GNOCs in the world that will take care of managed service requirement of operators across the regions. Currently, the company has centres in China and Romania, which manages Chinese and European clients, respectively.
“ZTE is in discussions with several telecom operators in Indonesia, Malaysia and Nigeria to manage their networks from a future GNOC in India for both fixed line as well as wireless networks,” Xu Huijun, Senior Vice-President — Wireless Business, ZTE Corporation, told Business Line.
Speaking on the sidelines of Mobile Asia Expo here, he said the centre would also lead to more hirings in India, which it would decide once the plan is finalised.
Exports post double-digit growth in May
New Delhi: Exports posted double-digit growth in May, the highest in six months, as shipments of key commodities, such as engineering goods, petroleum products, readymade garments and pharmaceuticals registered strong increases.
Imports continued to fall during the month, mostly due to declining gold imports, which narrowed the trade deficit sharply compared to the previous year.
Recording growth for two consecutive months of the new fiscal year after a lacklustre performance last year, exports increased 12.4 per cent in May to $28 billion over the same month a year ago.
India had missed its export target of $325 billion last fiscal year, as outbound shipments grew just 3.98 per cent to $312.35 billion because of tepid international demand.
Trade body hopeful
Exuding optimism, exporters’ body FIEO said this may be the beginning of a high-growth period for the sector. “Going by the current trend, exports could reach $360 billion in 2014-15. Most economies, barring a few countries in Latin America, are posting better results, which augurs well for India’s exports in the coming month,” an official release said.
But, the Commerce Ministry is not ready to celebrate yet. “Double-digit growth is encouraging after a period of low growth. If this trend continues I will definitely be saying there is a revival (in global demand). I would like to see what happens next month,” said Commerce Secretary Rajeev Kher, at a press conference.
Imports fell 11.41 per cent in May to $39.23 billion. Gold imports declined to $2.19 billion, plummeting 72 per cent from May 2013.
The Commerce Secretary indicated that the Government may rationalise gold import duties and relax import procedures in the forthcoming Budget. The trade deficit stood at $11.23 billion in May, which was 42 per cent lower than the $19.3 billion posted in the same month last year.
The recent appreciation in the value of the rupee against the dollar is unlikely to have a big impact on exports, said Kher.
According to Crisil, historical evidence suggested that global demand was more important than exchange rates in driving export growth. “With advanced economies’ growth expected to pick up to 2.2 per cent in 2014 from 1.3 per cent in 2013, we expect faster growth in India’s exports this year,” a Crisil release said.
Exports in the April-May period grew 8.87 per cent to $53.63 billion compared with the same period in the previous fiscal year. Imports fell 13.16 per cent in the first two months of the financial year to $74.95 billion, pulling the trade deficit down to $21.32 billion.
Imports continued to fall during the month, mostly due to declining gold imports, which narrowed the trade deficit sharply compared to the previous year.
Recording growth for two consecutive months of the new fiscal year after a lacklustre performance last year, exports increased 12.4 per cent in May to $28 billion over the same month a year ago.
India had missed its export target of $325 billion last fiscal year, as outbound shipments grew just 3.98 per cent to $312.35 billion because of tepid international demand.
Trade body hopeful
Exuding optimism, exporters’ body FIEO said this may be the beginning of a high-growth period for the sector. “Going by the current trend, exports could reach $360 billion in 2014-15. Most economies, barring a few countries in Latin America, are posting better results, which augurs well for India’s exports in the coming month,” an official release said.
But, the Commerce Ministry is not ready to celebrate yet. “Double-digit growth is encouraging after a period of low growth. If this trend continues I will definitely be saying there is a revival (in global demand). I would like to see what happens next month,” said Commerce Secretary Rajeev Kher, at a press conference.
Imports fell 11.41 per cent in May to $39.23 billion. Gold imports declined to $2.19 billion, plummeting 72 per cent from May 2013.
The Commerce Secretary indicated that the Government may rationalise gold import duties and relax import procedures in the forthcoming Budget. The trade deficit stood at $11.23 billion in May, which was 42 per cent lower than the $19.3 billion posted in the same month last year.
The recent appreciation in the value of the rupee against the dollar is unlikely to have a big impact on exports, said Kher.
According to Crisil, historical evidence suggested that global demand was more important than exchange rates in driving export growth. “With advanced economies’ growth expected to pick up to 2.2 per cent in 2014 from 1.3 per cent in 2013, we expect faster growth in India’s exports this year,” a Crisil release said.
Exports in the April-May period grew 8.87 per cent to $53.63 billion compared with the same period in the previous fiscal year. Imports fell 13.16 per cent in the first two months of the financial year to $74.95 billion, pulling the trade deficit down to $21.32 billion.
India’s pvt wealth to rise 150% by 2018: Study
New Delhi: By 2018, India could become the world’s seventh-biggest nation in terms of private wealth, with a 150 per cent jump in total from $2 trillion in 2013 to $5 trillion, suggests a recent study by The Boston Consulting Group (BCG). The country jumped two notches from 17th in 2008 to 15th in 2013.
Though the US and Japan are likely to occupy the first and the third spots, China could consolidate its position as the second-wealthiest nation with its private financial wealth increasing to $40 trillion in 2018 from $22 trillion in 2013.
The number of India’s millionaire households, meanwhile, increased to 175,000 in 2013 from 164,000 the previous year. The US topped in this with 7.1 million households, while China was second (2.3 million) and Japan third (1.2 million).
In its report ‘Global Wealth 2014: Riding a Wave of Growth’, BCG has said soaring equity markets and creation of new rapidly developing economies (RDEs) boosted global private financial wealth, which in 2013 grew 14.6 per cent over the previous year to $152 trillion.
Private financial wealth includes cash and deposits, money market funds and listed securities held either directly or indirectly through managed investments or life and pension assets, and other onshore and offshore assets. But, it excludes investors’ own businesses, any real estate, and luxury goods. “In nearly all countries, the growth in private wealth was driven by the strong rebound in equity markets that began in the second half of 2012. The performance was spurred by a relative economic stability in Europe and the US and signs of recovery in some European countries like Ireland, Spain, and Portugal,” the report says.
“Currency developments were more relevant to private wealth growth in 2013 than in 2012. Driven by the slowdown in quantitative easing, the US dollar gained in value against many currencies, particularly those in emerging markets, as well as the Japanese yen,” it adds.
India also made its entry into the club of top 15 ultra-high-networth households (more than $100 million in private financial wealth) in 2013. It was ranked 13th with 284 such households. The US (4,754 households), the UK (1,044) and China (983) were the top three.
BCG suggests in its report that high savings rate and GDP growth have fuelled the rise in private wealth in the Asia-Pacific region (excluding Japan), which grew 30.5 per cent to $37 trillion in 2013.
With its private wealth projected to rise at a compound annual growth rate (CAGR) of 10.5 per cent, the region could expand to an estimated $61.0 trillion by the end of 2018. At this pace, the region is expected to overtake Western Europe as the second-wealthiest region in 2014, and North America as the wealthiest in 2018.
Overall, the global private wealth is projected to post CAGR of 5.4 per cent over the next five years to reach an estimated $198.2 trillion by the end of 2018, the report says.
Though the US and Japan are likely to occupy the first and the third spots, China could consolidate its position as the second-wealthiest nation with its private financial wealth increasing to $40 trillion in 2018 from $22 trillion in 2013.
The number of India’s millionaire households, meanwhile, increased to 175,000 in 2013 from 164,000 the previous year. The US topped in this with 7.1 million households, while China was second (2.3 million) and Japan third (1.2 million).
In its report ‘Global Wealth 2014: Riding a Wave of Growth’, BCG has said soaring equity markets and creation of new rapidly developing economies (RDEs) boosted global private financial wealth, which in 2013 grew 14.6 per cent over the previous year to $152 trillion.
Private financial wealth includes cash and deposits, money market funds and listed securities held either directly or indirectly through managed investments or life and pension assets, and other onshore and offshore assets. But, it excludes investors’ own businesses, any real estate, and luxury goods. “In nearly all countries, the growth in private wealth was driven by the strong rebound in equity markets that began in the second half of 2012. The performance was spurred by a relative economic stability in Europe and the US and signs of recovery in some European countries like Ireland, Spain, and Portugal,” the report says.
“Currency developments were more relevant to private wealth growth in 2013 than in 2012. Driven by the slowdown in quantitative easing, the US dollar gained in value against many currencies, particularly those in emerging markets, as well as the Japanese yen,” it adds.
India also made its entry into the club of top 15 ultra-high-networth households (more than $100 million in private financial wealth) in 2013. It was ranked 13th with 284 such households. The US (4,754 households), the UK (1,044) and China (983) were the top three.
BCG suggests in its report that high savings rate and GDP growth have fuelled the rise in private wealth in the Asia-Pacific region (excluding Japan), which grew 30.5 per cent to $37 trillion in 2013.
With its private wealth projected to rise at a compound annual growth rate (CAGR) of 10.5 per cent, the region could expand to an estimated $61.0 trillion by the end of 2018. At this pace, the region is expected to overtake Western Europe as the second-wealthiest region in 2014, and North America as the wealthiest in 2018.
Overall, the global private wealth is projected to post CAGR of 5.4 per cent over the next five years to reach an estimated $198.2 trillion by the end of 2018, the report says.
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