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Top stories this week…

Dec 23, 2000

BOI trims workforce…
Bank of India, a state run bank, has decided to wind up its merchant banking and its subsidiary BOI Finance (the company engaged in trading related activities) in order to concentrate on its core business activities. The bank’s voluntary retirement scheme supposedly has received tremendous response with more than 7,000 employees opting for it. However, the bank is yet to fix a time frame for winding up these operations. Slowdown continues…
Country’s leading automobile companies recorded a decline in sales volume for November 2000. Heavy commercial sales and passenger cars sales dropped by 24 percent and 19 percent respectively in November 2000. The automobile sector has been severely affected due to sales tax rationalisation and hike in diesel prices, which has resulted in slow down in sales.

HLL’s next target…
Hindustan Lever Limited has decide to set up its fourth personal product manufacturing unit in Assam so as to cater the Eastern part of India. The new unit is expected to manufacture shampoo sachets and skin care products. The company had been planning to set up one such unit for quite some time.

IDBI issues bonus shares…
Industrial Development Bank of India (IDBI) has decided to issue bonus equity shares in the ratio of 3:5 (three bonus shares for every five shares held). This is expected to increase the share capital to Rs 6.5 billion (US$ 138 million). It has also proposed to maintain the dividend payout ratio at 45 percent.

Disinvestment on the move…
The government of India has decided to bring down its stake in the state run infotech major, CMC Limited, to 26 percent from the current 83 percent. It has proposed to divest the remaining 26 percent stake to a strategic partner. The company’s area of operation includes software maintenance and development, education & training and products businesses.

Astra takes majority…
IDL Industries, the Hinduja owned company, has planned to divest its 26 percent in Astra-IDL at the rate of Rs 670 (US$ 14.2) per share. This would mean that AstraZeneca would have majority holding of 51 percent in Astra-IDL. The enterprise value at the acquisition price works out to Rs 3.3 billion (US$ 70 million).

Indian Rayon gets global rights…
Indian Rayon, the A V Birla Group Company, has acquired the global rights for its prominent brands, which include Louis Phillipe, Van Heusen and Peter England from Coats Viyella of UK, for a consideration of US$ 2.3 million. The new territories that are added to its fold are Europe, Far East, Africa and West Asia (apart from India, Gulf and SAARC countries). This also includes the conversion of existing limited rights in the Middle East to complete ownership.

Piramal acquire Rhone…
Nicholas Piramal has announced the acquisition of 40% stake of Rhone Poulenc from Aventis AG. Wockhardt, Pharmacia Cadilla and Ranbaxy were also in the race for acquiring this stake. The price at which the stake has been acquired is Rs 875 (US$ 18.6) per share. Nicholas had a cash and bank balance of Rs 498 million (US$ 10.6 million) as at March 31st, 2000. Assuming the company would have to make an open offer for another 20 percent of the shares, Nicholas would have to shell out Rs 2.4 billion (US$ 51 million) for the total 60 percent stake. (Dec 22)

Another cellular consolidation…
Birla-AT&T-Tata, the merged entity of the Birlas, the Tatas and AT&T, has acquired a 100 percent stake in RPG Cellular for a consideration of Rs 4 billion (US$ 85 million). RPG Cellular is the cellular service provider in Madhya Pradesh, a joint venture between RPG Group and Vodafone, the UK based telecom major. It has a subscriber base of 25,000.

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