2. RCOM SET TO RAISE $500M ABROAD
Flag Telecom, a part of its international network arm Reliance Globalcom,
could raise at least $500 million by selling bonds to European investors
RCOM has appointed Deutsche Bank’s investment banking arm to spearhead
the latest fund-raising effort. If successful, the funds will be used to meet debt
obligations, including $200 million worth of convertible bonds held by overseas
investors
The company has another $900 million of foreign currency convertible bonds,
or FCCBs, maturing February 2012
The company has a current net outstanding debt—which rose over 700 crore
between July and September this year—exceeding 30,000 crore
The company reported a 40% plunge in profits in the second quarter of this
fiscal to Rs 446 crore
Reliance Communications acquired Flag Telecom, the undersea cable business,
in 2003 for about $207 million
3. DABUR BUYS US HAIR CARE CO FOR $100
M
SECOND FOREIGN BUY IN 3 MTHS
DABUR India has bought US-based haircare company Namaste Laboratories and its
three subsidiaries for $100 million ( 446 crore) in an all-cash deal as Indian consumer
product companies continue their global acquisition spree.
Its second overseas acquisition in less than three months will help Dabur enter the
fastgrowing $1.5-billion ethnic haircare product market in Africa
Annual revenues of $90 million in calendar 2009, of which the US accounted for 70%
and the rest mainly came from Africa. Pre-tax profit stood at $12.5 million.
Dabur made its first overseas acquisition in September when it bought Turkish personal
care company Hobi Kozmetick — which sells haircare and skincare products in 34
countries mostly in the Middle-East and North Africa — for 324 crore ($69 million).
he acquisition of Hobi Kozmetick and Namaste Laboratories along with our existing
businesses overseas will contribute nearly 25% to Dabur’s consolidated revenue in 2010-
11
Wipro Consumer’s buys-Unza Holdings and the Yardley brand in Asia, West Asia,
Australasia and certain African markets while Godrej -Kinky in South Africa, Tura in
Nigeria, Megasari in Indonesia, and Issue Group and Argencos in Argentina.
5. AXIS WINS ENAM, BUYS ITS BEST FOR
2,067 CR
Enam exits with handsome gains while deal will pay off for Axis in long term given strengths
& profitability of investment banking & institutional broking units Snaps Up Investment
Banking, Institutional & Retail Broking
For Axis, deal is a strategic move to get into a lucrative business and shore up fee income
while Enam gets to exit a segment where the going has been tough over the past few months
HOW HAS THE DEAL BEEN STRUCTURED?
Axis' investment banking operations and Enam's investment banking, institutional equities, retail
equities and related businesses will be merged into a unit of which Enam's Manish Chokhani would
be the MD and CEO
Enam shareholders will receive 5.7 shares of Axis for every one share held, resulting in them
holding a ...
3.3% stake in the bank
Vallabh Bhanshali, the cofounder and chairman of Enam, will be inducted as an independent
director on Axis board, subject to necessary approvals
Both have signed a non-compete pact for five years.
What is the trigger for the deal?
Axis Bank has built huge strengths in debt market syndication, and is right at the top in this
segment. However, the missing links were the equity capital market, equity brokerage business and
investment banking. Axis Bank was trying to plug these gaps by looking for the right fit
6. What is the trigger for the deal?
Axis Bank has built huge strengths in debt market syndication, and is right at the top in
this segment. However, the missing links were the equity capital market, equity
brokerage business and investment banking. Axis Bank was trying to plug these gaps by
looking for the right fit
Does it make sense for Enam to exit the investment banking and broking business?
It does. For, it can now exit a business segment where the going has been tough over the
past few months. Besides, Enam's institutional broking business has not been doing well
for some time. With a large chunk of their institutional clients moving to the direct
market access route, its revenues have fallen sharply over the past two years. Revenues
from Enam's equity capital market segment—which involves corporate finance and
advisory business—are also dwindling, thanks to low commission for merchant banking
services, intense competition and wafer-thin margins in its distribution business
GOING FORWARD, WHAT ARE THE CHALLENGES?
Axis can hope to build size and scale, but what needs to be closely watched is how the
bank integrates with a new team of investment bankers and stay ahead in the race.
How does the move benefit Axis Bank?
The bank will benefit hugely from Enam's wide distribution network. It can also ride on
Enam's reputation as a pedigreed investment banking firm that has introduced to Indian
investors some of the best names in corporate India like Infosys, and more recently, Coal
India. Besides, Axis can now hope to move up the league tables in investment banking
ahead of its rivals like ICICI Bank and HDFC Bank. More importantly, it will boost its
fee income, given the growth in fund-raising and rising M&A activity
7. ZEROING IN ON BLACK MONEY
India Drained Of 20 Lakh cr During 1948-2001: Study
A new study by an international watchdog on the illicit flight of
money from the country, perhaps the first ever attempt at
shedding light on a subject steeped in secrecy, concludes that
India has been drained of $462 billion ( 20,556,848,000,000 or
over 20 lakh crore) between 1948 and 2008
The amount is nearly 40% of India’s gross domestic product,
and nearly 12 times the size of the estimated loss to the
government because of the 2G spectrum scam.
The study has been authored by Dev Kar, a lead economist
with the US-based Global Financial Integrity, a non-profit
research body that has long crusaded against illegal capital
flight.
8. CONTD….
HUSH-HUSH WORLD
Channels for transfer of illicit money -Unrecorded wire transfers
Export under-invoicing Import over-invoicing “Hawala” transactions or
currency swaps Physically through couriers Cross-border smuggling of
currency
$462billion -Value of India’s total black money held abroad
40% -Total illicit money measured against GDP
11.5% -Annual growth of illegal finances exiting India
$16billion -India’s losses per year from 2002-2006.
If capital outflows were a child of the independence era, the problem
came of age in the years after reforms kicked in. Nearly 50% of the
total illegal outflows occurred since 1991. Around a third of the
money exited the country between 2000 and 2008 Outflows
accelerated after reforms
9. THE BELLWETHER OF SCAMS-BELLS
PALSY:TRAI ANNULS 62 LICENCES FOR
ROLLOUT DELAYS
THE telecom regulator has asked the government to cancel 62 of the 122 licences issued by former
telecom minister A Raja under controversial circumstances in 2008 to new companies, including
joint ventures of international operators such as Telenor ASA, Emirates Telecommunications Corp
and Sistema JSFC, because they had not been able to launch services in time.
CAG had slammed the telecom ministry for not recovering Rs 679 crore as penalty or liquidated
damages from six new operators for missing deadlines.
