HUL takes innovation route to tackle competition

HUL takes innovation route to tackle competition
MUMBAI: Unilever CEO Paul Polman wanted to be a priest, but ended up studying economics. Instead of donning vestments and presiding over his flock,
he put on a suit and took to selling nappies and bath soaps for one of the world's biggest consumer products firms. Later on in his career, he did something even more unexpected, at least by Indian standards. Instead of getting bogged down in boring power points and dour dinner boardroom conversations , he put on his climbing boots and took aim at a massive target, Mt Kilimanjaro, Africa's biggest peak, which he conquered some years ago for a charity. Employees and shareholders are already feeling the effects of an evangelising and adventurous spirit coursing through the company. There is a buzz around Unilever these days that is hard to miss. Volumes have grown worldwide if not yet in India, a new management team is in place and a turnaround strategy being put in place seems to be working. Starting last Saturday Mr Polman and top honchos of its Indian subsidiary Hindustan Unilever spent over two days meeting consumers and dealers as India's largest seller of consumers goods soaps and toothpaste seeks to fulfil its parent's mandate to ratchet up growth rates. The maker of well-known consumer brands such as Dove shampoos, Lipton tea and Surf detergent says it has initiated innovation across categories to drive growth to tackle the intensifying competition in the country and to double turnover. The importance of Paul Polman’s visit is clear considering that this is third trip since he took over as CEO. Paul Polman, who hit the road with Harish Manwani, non-executive chairman , HUL and president Asia, Africa, central & Eastern Europe in tow, is believed to have directed the top team to commit higher investments to step up market development activities through product and pricing innovations, primarily at the mass end of the market where HUL has been under pressure. He jokingly said he did not want to focus on beating up Nitin Paranjpe—Hindustan Unilever CEO—or Harish Manwani for a couple of tough quarters faced by HUL. The majority-owned subsidiary of Unilever has disappointed investors with lacklustre results for four quarters. For the quarter ended December 31, its net profit was at the same level as the year-ago period and its topline rose just 4.4%. HUL missed the great bull run of 2003-08 and the stock has given a measly 0.16% return since 2000. The HUL scrip closed at Rs 239.50 up 0.8% in a flat Mumbai market. Mr Polman rattled HUL executives when he described India as an “underperformer” while unveiling Unilever fourth quarter results. But, on Monday with Mr Manwani and Mr Paranjpe at his side he spoke in emollient terms about Unilver’s long history in India and the glorious future that lay ahead.

Kalanithi's Rs 700-cr offer not too hot for SpiceJet owners

Kalanithi's Rs 700-cr offer not too hot for SpiceJet owners
MUMBAI: Kalanithi Maran, media baron and promoter of Sun TV, and the promoters of SpiceJet are sparring over the price being offered for a majority
stake in the budget carrier, with Mr Maran’s proposal of Rs 700 crore for a 51% stake finding few takers among the airline’s shareholders. Mr Maran, whose interests have now spread from media to aviation, has completed due diligence and is believed to have made an offer of Rs 700 crore, or Rs 55 per share. This is not acceptable to the SpiceJet shareholders, as the offer is at a discount to the ruling market price of the stock. The SpiceJet stock fell marginally to Rs 57.55 on Monday. At current market price, SpiceJet is valued at about Rs 1,388 crore. “There are differences on the valuation. If that is over, a deal may be announced in a fortnight,” said an investment banker requesting anonymity. Kenya-based Kansagra family is the promoter of SpiceJet with a 13% stake. SpiceJet director Ajay Singh holds 5%. The deal, if it goes through, will be a combination of share sale by existing shareholders and issue of new shares to Mr Maran, who has been looking for an opportunity to enter the aviation industry. He held discussions to buy Star Aviation, an yet-to-be-launched regional airline in South India. Attempts to reach Mr Maran and Sanjay Aggarwal, SpiceJet’s chief executive officer, failed. SpiceJet’s chief operating officer Samyukta Sridharan, in response to an ET query, said, “As a policy, we do not comment on market rumours and speculation.” Financial services group Religare is also in the race, but yet to do the due diligence, said a person having direct knowledge of the development. The Anil Ambani Group had showed some initial interest. Advisory firm Ernst & Young (E&Y) is doing the financial due diligence for SpiceJet and law firm Amarchand & Mangaldas & Suresh A Shroff & Co is advising Mr Maran on legal issues. Financial services firm Edelweiss is advising SpiceJet on the deal. Key executives within the airline said the Maran group had done initial reference check on the SpiceJet management some time ago. Aviation analysts and experts, who have been tracking SpiceJet, said valuations for the airline can be the deal breaker. “SpiceJet is one of the most expensive airlines in the country,” said a source from one of the major advisory firms in the country, not wanting to be identified. “If one compares on the basis of number of aircraft, Kingfisher Airlines with 65 aircraft has a market cap of Rs 1,286 crore whereas SpiceJet with only 20 aircraft has a market cap of Rs 1,390 crore,” he said. The stock has seen as much as 60% rise over the past six months, compared to peers like Jet Airways, which saw an increase of 42% over the same period. US-based billionaire private equity investor Wilbur Ross has also invested in the airline and is believed to looking to sell his stake. Mr Ross invested $80 million in SpiceJet in July 2008 through foreign currency convertible bonds. In December this year, Mr Ross will either have to convert or redeem the bonds. Mr Ross’ stake will go up to 31% if he converts the bonds, forcing him to launch the mandatory 20% open offer, which, he does not want to, sources said. “This is why Wilbur Ross is looking to sell his stake in the company,” said the person having direct knowledge of the matter. Wilbur Ross could not be contacted for comment.

Lehman plans to end bankruptcy, create new company

Lehman plans to end bankruptcy, create new company
Journey of Lehman Brothersoperations -- and end the largest U.S. bankruptcy case in history. Under the proposed Chapter 11 plan, a newly created business called LAMCO would manage what is left of Lehman's commercial real estate, mortgages, principal investments, private equity, corporate debt and derivatives assets. Lehman filed for bankruptcy on Sept. 15, 2008, listing more than $600 billion of assets. It quickly sold its biggest units like its core U.S. brokerage and Neuberger Berman wealth management subsidiary, but hundreds of Lehman employees hired by the bankruptcy estate have been managing the company's long-term investments in real estate and private equity since the bankruptcy. Lehman's ability to quickly sell its core assets and then propose an end to its bankruptcy about a year and a half after filing the most complicated case ever was seen as a triumph for the U.S. bankruptcy system. "Lehman went in and there was real concern whether bankruptcy could handle something like that," Jack Williams, a bankruptcy law professor at Georgia State University, said on Monday. "(The detractors) were wrong then and they're wrong now ... It works for small, medium and gargantuan businesses."

Renault-Nissan hints tie-up with Ashok Leyland for new car project
16 Mar 2010, 2112 hrs IST, ET Bureau

CHENNAI: Renault-Nissan strongly hinted on Tuesday that it might partner with commercial vehicle major Ashok Leyland (ALL) to produce a new
passenger car which will be positioned between its ultra-low-cost car project (ULC) with Bajaj and the v-platform ‘Micra’ car. ( Watch ) The alliance has been engaged in discussion with the ALL team, among other partners, earlier in the day. Renault-Nissan chairman Carlos Ghosn said his company is working with ALL on the evolution of some common projects. He is in Chennai to inaugurate Renault-Nissan’s maiden greenfield car plant in India at Oragadam on Wednesday. On the new car, Mr Ghosn said it has not reached any conclusion yet with its active "alliance partner" ALL. However, he ruled out any tie-up with Bajaj for this project as the latter had its "hands full" with the ULC car project. When contacted by ET, Bajaj Auto MD Rajiv Bajaj said "I don’t know what’s on their mind as we haven’t discussed the project." On the ULC tie-up with Bajaj, Mr Ghosn said "it will not be assembled in Chennai plant," he said, noting at every emerging market (India, Russia, China and Brazil) had an entry point as far as pricing is concerned. It is yet to reach negotiation stage at the contract level but the two were working together to develop this car. The car derivative would not only be for India market but also for other emerging markets, Mr Ghosn said in response to a query. Seeking to point out that Micra is coming at a "very important" segment, the B+ market, which constitutes over 50% of the Indian market, he said below Micra, there is room for many other products (in the B, A and A- categories). On Logan and its pact with Mahindra & Mahindra, the Renault-Nissan CEO said it is not satisfied with the evolution of Logan. This input has been shared with Mahindra and both are now working towards "repositioning" Logan and making it a success in India. "We have to be a bit more nimble and faster in the market," Mr Ghosn said, adding it had not yet reached any conclusion with its partnership with M&M. "Logan will be competitive and stay in the Indian market and consumers will be served," he said, adding the product would sustain its "normal life-cycle." Asked about an equity-swap deal with Germany’s Daimler, Mr Ghosn dismissed it as speculation.

UK's Prudential confirms to buy AIG Asia for $35.5 bn
LONDON: Britain's Prudential said it would buy AIG's Asian life insurance arm for $35.5 bn, in a deal set to make the insurer the undisputed leader Where has US bailout money gone?More on Financial crisisWhy currency keeps fluctuatingin one of the world's fastest-growing financial services markets. The acquisition will be financed in part by a $20 billion equity capital raising, one of the biggest cash calls ever, and by a $5 billion debt issue, Prudential said on Monday, confirming an earlier Reuters report. Investors and analysts said they needed to know more about the finances of the AIG's Asian unit, AIA, before they could judge whether the deal could justify a capital-raising on that scale.

Board PM's Special Aircraft: Prime Minister Manmohan Singh today ruled out any roll back in petrol and diesel prices, saying the economy has the
capacity to absorb the increase without triggering inflationary pressure. "Any increase in prices does hurt some people, but we have to take a long-term view," he told reporters accompanying him on his way back home from Saudi Arabia. Singh made it clear following populist fiscal policies for long harm the economy. "We cannot save people from inflation if we follow all populist fiscal policies. Sooner or later these populist policies if persisted for a long time to come will lead to the erosion of the investment climate," he said. The Prime Minister was asked about growing concerns over the recent hike in oil prices and the ripple that may have.