Weekly Finance Economic Newsletter

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Top News
Fairfax-led consortium offers to buyout BlackBerry for
$4.7B.
New Vernon-backed Celebrity Fashions allots shares
worth 24% stake to SBI in lieu of debt.
Germany’s Brenntag acquires chemical distribution arm of
Zytex for $14M.
Carlyle-backed Infotech is in talks to buy US firm.
Oberoi Realty IPP subscribed almost 2x; promoters sell
shares worth around $30M.
Vodacom in talks to buy Tata's South African telco Neotel
for over $500M.
Distressed assets investor WL Ross pays Rs 1.1Cr to SEBI
to settle Spicejet case.
Asian Development Bank to lend $500M for renewable
energy project in Rajasthan
Weekly Indian Economy Movement
India's headline inflation shot to a six-month high in August, driven by a 245 per cent
annual jump in onion prices, hardening the case for Reserve Bank of India (RBI)
governor Raghuram Rajan to keep interest rates high at his first policy meeting later this
week.
Food inflation accelerated to a three-year high of 18.18 per cent in August, government
data released on Monday showed, driving the benchmark Wholesale Price Index up by a
stronger-than-expected 6.1 per cent.
Economists had expected a slight pick-up to 5.8 per cent from 5.79 per cent in July.
Monday's data is a grim reminder of the economic pressures facing the new central bank
governor as he steps in to deal with India's worst economic crisis in more than 20 years.

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Rajan has already warned he does not have a "magic wand," but as he has been dubbed
"The Guv" by a gushing Indian media hopes are high that he can find a formula to calm
inflationary pressure, stabilise the rupee and at the same time spark a revival in economic
growth.
The higher inflation number dampened market expectations that Rajan would begin to
rollback some of the measures put in place by his predecessor in a bid to arrest a sharp
fall in the rupee since May. Those steps included draining liquidity from the banking
system.
The rupee, stocks and bonds all pared earlier gains after the data, with the rupee trading at
62.70 to the dollar as of 1500 IST, up about 1.3 per cent on the day but still down more
than 12 per cent so far this year.
The benchmark BSE Sensex and the broader Nifty both turned slightly lower, while
bonds also reversed earlier gains.
Food prices
Onions are a staple ingredient in many Indian dishes and rising prices of the vegetable
anger voters and can quickly become a political issue. India is due to hold its largest-ever
general election within eight months.
Onions cost 245 per cent more in August than a year before, while other vegetables shot
up by 77 per cent. Eggs, meat and fish were up nearly 19 per cent.
Farmers are expecting food prices to start moderating from October onwards as supplies
rise from crops planted after the much better monsoon season. However, heavy rainfall
has resulted in flooding in some areas of the country making it difficult to get produce to
market.
More price pressure could come in the form of a government plan to hike retail fuel
prices by nearly 10 per cent to ease its oil subsidy burden, which has risen after the
rupee's fall and on higher crude prices.
Analysts estimate that such an increase in diesel prices would directly add 0.5 per cent to
headline inflation.

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Inside The Story
Fairfax-led consortium offers to buyout BlackBerry for
$4.7B
Hyderabad-born Prem Watsa-led Canadian financial services firm Fairfax Financial
Holdings Ltd (Fairfax) is leading a consortium of investors who have offered to take the
mobile handset maker BlackBerry private in a $4.7 billion transaction. Fairfax currently
owns 10 per cent of BlackBerry.BlackBerry said on Monday it has signed a letter of
intent agreement (LOI) under which a consortium of investors led by Fairfax may buy the
Canadian smartphone maker for $4.7 billion.According to the agreement, BlackBerry
shareholders would receive $9 in cash for each existing share of BlackBerry they
currently hold. The consortium would acquire for cash all of the outstanding shares of
BlackBerry not held by Fairfax. Fairfax, which owns approximately 10 per cent of
BlackBerry’s common shares, intends to contribute the shares it currently holds into the
transaction.
New Vernon-backed Celebrity Fashions allots shares
worth 24% stake to SBI in lieu of debt.
Celebrity Fashions, a Chennai-based manufacturer of garments and the parent company
of garment brand Indian Terrain, has allotted shares representing over 24 per cent stake
of the firm to its lender State Bank of India (SBI), as a part of debt restructuring
exercise.Celebrity Fashions disclosed that it allotted 74,69,100 equity shares on a
preferential basis to SBI. The company’s scrip last traded at Rs 4.1 a share; so the share
allotted is valued at Rs 3 crore.The company also allotted 2,51,04,500, 1 per cent
cumulative redeemable preference shares of face value Rs 10 each to SBI.
Germany’s Brenntag acquires chemical distribution arm of
Zytex for $14M
Germany-based chemical distributor Brenntag has signed an agreement to acquire the
chemical distribution division of the Zytex Group, a Mumbai-based biotechnology food
formulation and manufacturing company, for €10.2 million ($13.7 million), as per a
company statement. Post acquisition, the division will become part of Brenntag’s Indian
arm which is located in Mumbai.This acquisition would help Brenntag further strengthen
its nutrition and health business in India by adding new customer segments and products
to its portfolio as well as expand its strategic relationships with key global suppliers.

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Carlyle-backed Infotech is in talks to buy US firm
Infotech Enterprises Ltd, an Indian software services provider to aerospace and
automotive industries, plans to acquire at least one company in the US this year to expand
in its biggest market. The firm, backed by Carlyle Group LP, will use part of its Rs 600
crore ($96 million) cash for the purchase. The Hyderabad, India-based company has
acquired nine rivals in the US and Europe since 1997. The company might spend about
$25 million on the acquisition
Oberoi Realty IPP subscribed almost 2x; promoters sell
shares worth around $30M.
The institutional placement programme (IPP) of Oberoi Realty, the second-largest realtor
in the country according to market capitalisation, through an offer for sale by the
promoters, was subscribed 2x. The share sale by the promoters fetched around Rs 190
crore ($30 million) for their 3.49 per cent stake.The company's CMD and promoter Vikas
Oberoi had offered to sell 11.4 million shares with a floor price of Rs 158 per share. The
issue saw bids for 21.6 million shares, bulk of it on the BSE with an indicative price of
Rs 167.
Vodacom in talks to buy Tata's South African telco Neotel
for over $500M.
Vodacom Group is in talks to buy Tata Communications' stake in South African telecoms
operator Neotel for more than 5 billion rand, Bloomberg reported on Friday, citing a
person familiar with the matter.Vodacom is the South African unit of Vodafone Group
Plc. Tata owns more than 60 percent of Neotel, a provider of fixed-line service and
data.The talks are set to become exclusive, Bloomberg said.
Distressed assets investor WL Ross pays Rs 1.1Cr to SEBI
to settle Spicejet case
Billionaire investor Wilbur Ross-headed global private equity group WL Ross has paid
Rs 1.1 crore to Security Exchange Board of India (SEBI) to settle its pending case over
its past share transactions in Indian carrier Spicejet India Ltd.WL Ross had picked stake
in Spicejet five years ago and later sold it to Kalanithi Maran of Sun Group.

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It also alleged that the shares and voting rights under Sale and Purchase Agreement were
segregated and separately transferred prior to completion of the open offer formalities in
violation of regulation 22(16) of SAST Regulations.
Asian Development Bank to lend $500M for renewable
energy project in Rajasthan
The Asian Development Bank (ADB) will provide a loan of $500 million (Rs 3,100
crore) to build a power transmission system at the Bhadla park in Rajasthan to deliver
clean electricity from wind and solar power projects to the state and national grids, the
development financial institution said on Friday.The loan will be provided in three
tranches; the first tranche is worth $152 million. The second tranche of around $220
million and the final loan of around $128 million are expected to be released later in 2014
and 2015, respectively. The investment programme is expected to be completed by early
2018.