Environmentalists cheer news of scrapping of power project
Environmentalists are hailing news that India’s ministry of environment and forests has scrapped a proposed power plant by Larsen & Toubro in eastern India close to a nesting ground for endangered Olive Ridley turtles.
But Greenpeace is quick to point out that there are ports proposed near all of Orissa’s mass nesting areas, and that these should be denied permission, as well.
It is a tough fight, one that is pitting environmentalists, tribals and villagers against large companies and government agencies keen on tapping resources and building infrastructure to keep pace with India’s robust growth.
The fate of dozens of mining projects, power plants, ports, even highways and special economic zones will be determined by India’s ministry of environment and forests, with reports every day of protests that have sometimes turned violent.
Like in mineral-rich Orissa state, where hundreds of indigenous people are battling to stop London-listed miner Vedanta Resources from extracting bauxite from what they say is their sacred mountain, in an eerie echo of the blockbuster “Avatar” movie.
Vedanta says it needs the ore to feed a refinery it has already built at the foot of the hills, and which will bring greater prosperity to the impoverished area.
India has some of the strictest environmental norms, but its failing has often been lack of implementation and lack of penalty for those breaking the law.
from DealZone:
Reliance aims big with $12 bln bid for LyondellBasell
Ranked by Forbes as India's richest man with a net worth of $32 billion, Mukesh Ambani is no stranger to taking risks.
The move by conglomerate Reliance Industries, controlled by Ambani, to bid for bankrupt LyondellBasell is a calculated one. Markets seem to think this is a bargain and investors pushed up Reliance's stock nearly 4 percent on Monday.
If the deal, which sources say may be worth $12 billion, goes through, it would catapult Reliance into the ranks of top petrochemical makers such as Saudi Arabia's SABIC, Germany's BASF and Dow Chemical Co.
The bid comes at a time when asset prices have fallen globally in the wake of the economic crisis but there are still some lingering doubts over whether the worst is over for the global economy.
Reliance hasn't shied away from making mega investments during downturns.
Last December, Reliance commissioned a 580,000 barrels per day refinery next to its existing 660,00 bpd plant in the western Indian state of Gujarat, creating the world's biggest oil refining complex just as global oil demand began to collapse.
Reliance has a cash pile of $4 billion and $8 billion in treasury stock that can be sold, so funding is unlikely to be an issue for the company, Macquarie said in a research note ahead of the bid. Bank of America Merrill Lynch is among the advisers for Reliance, sources said.
from DealZone:
No bruised egos as Bharti-MTN redial once again
Exactly one year ago, squabbles over control forced Bharti Airtel and MTN to ditch their hope of forming a global telecoms group, but both emerging markets-focused companies are back on the negotiating table to thrash out a $61 billion merger.
What's changed?
For a start, both firms are now publicly talking about a detailed structure for the combined entity, something that was missing last time.
As part of an initial deal worth more than $23 billion unveiled on Monday, Bharti will pay in cash and shares for 49 percent of MTN, while MTN pays cash and stock for an effective 36 percent stake in the Indian firm. Previous merger talks collapsed when the South African firm proposed a new structure that would have seen Bharti become an MTN unit.
The past year has seen the full impact of a global recession that has spared few industries and MTN, sub-Saharan Africa's biggest mobile operator, and Bharti -- India's top mobile operator -- might be looking to combine to cope better in tough times.
Thanks to scorching growth in emerging markets, the combined entity boasts a user base of 200 million, catapulting it to the top five global industry players, while last year, the combined group would have ranked among the top ten.
MTN and Bharti are locked in exclusive talks for about two months, giving little room for rivals to upset their game plan.
Dark horse Tech Mahindra wins race to acquire Satyam
Tech Mahindra, part of Indian business group Mahindra & Mahindra, won the race to acquire Satyam Computer Services on Monday, in a deal that’ll help the mid-sized outsourcer gain in size and also lift clarity on Satyam’s fate.
In a race that saw only a handful of bidders, Tech Mahindra beat rivals such as engineering conglomerate Larsen & Toubro and U.S.-listed Cognizant Technologies. Tech Mahindra agreed to buy a 31 percent stake in Satyam at 58 rupees, a 23 percent premium to Satyam’s last closing price.
(Click here to watch a Reuters Insight video)
Tech Mahindra, established more than 20 years ago as a joint venture between Mahindra & Mahindra and British Telecom, faces the daunting task of reshaping Satyam, a company at the heart of India’s biggest corporate scandal.
Ever since Satyam’s founder Ramalinga Raju shocked markets by disclosing the $1 billion-plus fraud, there have been numerous reports of Satyam’s employees jumping ship and some clients cutting back on orders to Satyam. The company’s accounts are also still being restated and its U.S. liabilities are unclear.
Will the government continue to keep a close eye on Satyam? What’s going to be the fate of Satyam’s employees and clients? Will the Tech Mahindra-Satyam combination be able to grab market share from leaders Tata Consultancy, Infosys Technologies and Wipro? These are issues for which Tech Mahindra will need some answers pretty soon.
(Photo: Satyam Computer Services Chairman Kiran Karnik (2nd L) and board members Deepak Parekh (2nd R), Tarun Das (L) and T. N. Manoharan attend a news conference held by Satyam board members in Mumbai April 13, 2009. REUTERS/Arko Datta)
Fraud-hit Satyam pins hopes on shaky white knights
Three months after its founder Ramalinga Raju shocked markets by disclosing India’s biggest corporate scandal, Satyam Computer Services is desperately pinning its survival hopes on its auction set for April 13.
But only a handful of bidders are in the race due to lack of clarity over Satyam’s accounts and potential legal liabilities from U.S. lawsuits. Even if the company manages to find a buyer for a 51 percent stake, it’ll take a long time to instill confidence among employees already jumping shipand nervous clients.
What about the role of the government, whose appointed-board is due to choose the buyer the same week the country heads for national elections? Will the government remove its handpicked board or continue to keep a watchful eye on any new strategy chalked out by the new buyer?
Some finance industry players point out the similarity between Satyam’s deal and the deal for top Chinese electronics retailer GOME. The Chinese company is in talks with potential investors, while its founder and ex-chairman is under potential police investigation. There is a lot of uncertainty about both deals and government support, temporary or long-term, is key to shoring up both high-profile firms.
Satyam’s former chairman, former managing director and former chief financial officer are all being held in jail in the southern Indian city of Hyderabad.
Satyam has not reported earnings since October as the new auditors are still in the process of restating accounts. Local media report the final tally of likely bidders for Satyam is shrinking.
Will the auction be the first step in a much-needed recovery for a company once ranked as India’s fourth-biggest IT services exporter or spell more pain ahead?
Now that Satyam bid is finalized, the attention will switch to satyam’s bankruptcy resulting from a dozen law
suits. On the contrary ,I think, now satyam’s existing customers will start abandoning it; thus its takeover
will not solve any problems.
I think it is essential to take the middle path, bearing in mind that you cannot make an omelet without breaking any eggs. There will always be somebody or group that is adversely affected but that has to be then set off against the greater good, whatever that may be.
I think that what is primarily required is the need to have more comprehensive dialogues from the very beginning and for those involved not to take an uncompromising stand. Left only to the environmentalists, we would probably have to regress to the stone age and start living in caves again. Everything else either pollutes, or has a carbon signature, or displaces people or creates some problems for some people. I think awareness is spreading, albeit slowly, and that such problems very often get politicised and then there is simply no solution in sight.
Why not make a rule, that if something essential cannot be located somewhere, then those opposing or refusing permission to operate must also have a suitable alternate site.