Cairn, ONGC plans for gas fields in Gujarat coast nearing completion

Kolkata, June 29 Cairn India and ONGC (Oil and Natural Gas Corporation) have near-finalised the plan for joint development of Ambe and North Tapti offshore marginal gas fields in the Gujarat coast.
According to sources, the project will lead to natural gas production of 1.5 million metric standard cubic metre a day (mmscmd) from Cairn operated Ambe field and 2 mmscmd by ONGC’s North Tapti.
The entire production of 3.5 mmscmd gas and associated oil will be processed at Cairn’s existing operations at Hazira. ONGC and Cairn have opted for the joint development route to optimise the investment in pipeline, processing and other infrastructure in these marginal fields.
Ambe is a satellite gas field of Cairn (40 per cent) operated CB/OS-2 joint venture in Cambay basin.
The other partners in the joint venture are ONGC and Tata Petrodyne. The satellite field, discovered in 2001, is surrounded by ONGC’s North Tapti.
According to sources, the Cairn-operated joint venture has already pegged the estimated cost of developing Ambe at approximately Rs 300 crore.
ONGC may have to pump in Rs 500-600 crore for development of North Tapti.
When contacted, ONGC sources admitted that they were moving ahead with the plan to jointly develop the North Tapti field.
“The (joint) development plan for North Tapti is nearing finalisation and is expected to be placed before the ONGC board shortly,” a company source told Business Line.
ONGC proposes to build two platforms in North Tapti for production of 2-2.2 mmscmd gas and associated oil, which will be connected to Cairn’s existing pipeline network for processing at Hazira.
While comments were not available from Cairn, industry sources said that the CB/OS2 JV would develop one production platform at Ambe. Apart from gas, the field was expected to produce 7,000 barrels of oil and condensate.
According to a Cairn announcement in April, the CB/OS-2 JV is currently producing a little more than 1 mmscmd (36 million standard cubic feet a day) of natural gas and 10,000 barrels of oil from Lakshmi, Gauri and CB-X fields.
The offshore Lakhsmi and Gauri are ageing fields and are on a declining phase of production. CB-X is an onshore marginal field.

Sagar Cements, Vicat of France plan joint venture

Hyderabad, June 24 Sagar Cements Ltd and Vicat S.A. of France will together set up a 5.5-million-tonne a year cement plant at a cost of Rs 2,500 crore in Gulbarga, Karnataka.
Vicat will also pick up a 6.67 per cent stake in Sagar Cements for a consideration of Rs 70 crore.
The proposed joint venture, Vicat-Sagar Cements, will also explore opportunities for holding assets overseas, Sagar Cements informed the stock exchanges today. This venture gives Vicat an entry into the Indian market while for Sagar Cements it offers them an opportunity to tap overseas markets.
The joint venture will have an equity capital of Rs 720 crore, of which Sagar Cements’ share will be Rs 196 crore and Vicat’s Rs 524 crore. The balance will come as debt, for which Vicat will be responsible, according to the statement.
The Gulbarga plant will have a 5.5-million-tonne a year cement grinding unit, a 4-million-tonne clinker facility and a 60-MW captive power plant. Operations are slated to commence in four years.
Sagar Cements said it would make a preferential allotment of one million shares of Rs 10 each at a premium of Rs 690 a share to Vicat for the French company to pick up a 6.67 per cent stake. This would expand the fully diluted equity share capital of Sagar Cements from Rs 14 crore to Rs 15 crore.
Apart from this, the joint venture also planned to set up a cement plant in Oman in collaboration with a local partner.
The Vicat group will have four representatives on the board of the joint venture and Sagar Cements three; Sagar Cements will propose the chairman and Vicat the chief executive officer.
Commenting on the agreement, Dr Anand Reddy, Joint Managing Director, Sagar Cements said, ``We look forward to leverage on Vicat’s high degree of experience and expertise in fields like waste fuel and product development.”
According to Mr Guy Sidos, Chief Executive Officer of Vicat S.A, the agreement illustrated the international expansion strategy of the group which aimed to expand its presence in high potential markets. ``We are confident about the growth momentum of our markets in Asia and India,” he said.
Recently, Belgium-based Ackermans & Van Haaren (AvH), an independent, €2.1-billion diversified group picked up a 14.3 per cent stake in Sagar through open market.
When asked on the impact of the JV on AvH’s stake, Mr Srikant Reddy, Director, Sagar Cements, told Business Line that there was no relation between them. ``However, after the issue of preferential shares to Vicat, the holding of alls share holders will decrease correspondingly, he said.
As on date, the promoters hold 45 per cent stake in Sagar Cements.
Sagar Cements’ shares closed on the NSE today at Rs 390.70, up 3.5 per cent from yesterday’s closing price.
Our Chennai bureau adds: In response to an email, Mr Piet Bevernage, member of the executive committee of AvH, told Business Line over telephone from Belgium that AvH had no intention of selling its stake in Sagar Cements. AvH had decided to focus a bit more on the minerals sector and found the minerals and infrastructure boom in India a sound combination for investing.
AvH also did not intend increasing its stake as it was aware that crossing the 15 per cent threshold would trigger an open offer to the shareholders. “We look forward to working with the Reddy family (the promoters) as they have made a good impression on us,” Mr Bevernage said.

Diversification for Tech Mahindra

Tech Mahindra’s deal win with Telecom New Zealand (Telecom NZ) may help diversify its revenue base, by adding to revenues from non-British Telecom clients.
That the deal does not involve any transfer of employees from Telecom NZ is another positive takeaway.Revenue Visibility
The $24 million, 18-month deal envisages, Tech Mahindra providing complete system integration services to Telecom NZ’s retail business.
This deal involves services to be delivered for the client’s next-generation telecom initiative signifying a move up the value chain for Tech Mahindra.
With Telecom NZ reportedly planning a NZ $1 billion a year capex expansion, Tech Mahindra appears well-placed to tap into any new opportunity.
There would be no transfer of employees from Telecom NZ to Tech Mahindra, as normally happens with large deals.
This means that there would be lower burden in terms of manpower costs and the company could work in a non-captive mode. For Tech Mahindra, this deal also helps reduce dependence on BT (its largest client contributing over 60 per cent of its revenues) related deals.Geographic Diversification
New Zealand/Australia, two under-tapped geographies, represent yet another diversification opportunity for Indian IT companies, in the Asia Pacific region.
HCL Technologies recent large deal win Fonterra of New Zealand is a case in point.
This may set a new course for these companies that are dependent on the US and Europe and help diversification.

Sagar Cements, Vicat of France plan joint venture

Hyderabad, June 24 Sagar Cements Ltd and Vicat S.A. of France will together set up a 5.5-million-tonne a year cement plant at a cost of Rs 2,500 crore in Gulbarga, Karnataka.
Vicat will also pick up a 6.67 per cent stake in Sagar Cements for a consideration of Rs 70 crore.
The proposed joint venture, Vicat-Sagar Cements, will also explore opportunities for holding assets overseas, Sagar Cements informed the stock exchanges today. This venture gives Vicat an entry into the Indian market while for Sagar Cements it offers them an opportunity to tap overseas markets.
The joint venture will have an equity capital of Rs 720 crore, of which Sagar Cements’ share will be Rs 196 crore and Vicat’s Rs 524 crore. The balance will come as debt, for which Vicat will be responsible, according to the statement.
The Gulbarga plant will have a 5.5-million-tonne a year cement grinding unit, a 4-million-tonne clinker facility and a 60-MW captive power plant. Operations are slated to commence in four years.
Sagar Cements said it would make a preferential allotment of one million shares of Rs 10 each at a premium of Rs 690 a share to Vicat for the French company to pick up a 6.67 per cent stake. This would expand the fully diluted equity share capital of Sagar Cements from Rs 14 crore to Rs 15 crore.
Apart from this, the joint venture also planned to set up a cement plant in Oman in collaboration with a local partner.
The Vicat group will have four representatives on the board of the joint venture and Sagar Cements three; Sagar Cements will propose the chairman and Vicat the chief executive officer.
Commenting on the agreement, Dr Anand Reddy, Joint Managing Director, Sagar Cements said, ``We look forward to leverage on Vicat’s high degree of experience and expertise in fields like waste fuel and product development.”
According to Mr Guy Sidos, Chief Executive Officer of Vicat S.A, the agreement illustrated the international expansion strategy of the group which aimed to expand its presence in high potential markets. ``We are confident about the growth momentum of our markets in Asia and India,” he said.
Recently, Belgium-based Ackermans & Van Haaren (AvH), an independent, €2.1-billion diversified group picked up a 14.3 per cent stake in Sagar through open market.
When asked on the impact of the JV on AvH’s stake, Mr Srikant Reddy, Director, Sagar Cements, told Business Line that there was no relation between them. ``However, after the issue of preferential shares to Vicat, the holding of alls share holders will decrease correspondingly, he said.
As on date, the promoters hold 45 per cent stake in Sagar Cements.
Sagar Cements’ shares closed on the NSE today at Rs 390.70, up 3.5 per cent from yesterday’s closing price.
Our Chennai bureau adds: In response to an email, Mr Piet Bevernage, member of the executive committee of AvH, told Business Line over telephone from Belgium that AvH had no intention of selling its stake in Sagar Cements. AvH had decided to focus a bit more on the minerals sector and found the minerals and infrastructure boom in India a sound combination for investing.
AvH also did not intend increasing its stake as it was aware that crossing the 15 per cent threshold would trigger an open offer to the shareholders. “We look forward to working with the Reddy family (the promoters) as they have made a good impression on us,” Mr Bevernage said.

Exide gets 51% in lead smelting co

Lead acid storage battery company Exide Industries Ltd on Wednesday announced the acquisition of a 51 per cent stake in Leadage Alloys India Ltd, a lead smelting company located near Bangalore. Earlier this month the company's board had approved a maximum investment of up to Rs 35 crore for such an acquisition. Having acquired Tandon Metals Ltd in October 2007, this is the second lead smelting unit in which Exide Industries has taken a controlling stake. Lead constitutes approximately 70 per cent of the material cost of a battery and its price has been extremely volatile in the past three years

Singhs sell out entire stake in Ranbaxy to Daiichi

Marking the largest ever deal in Indian pharma industry, Japanese drug firm Daiichi Sankyo on Wednesday announced the acquisition of a majority stake of more than 50 per cent in domestic major for over Rs 15,000 crore (Rs 150 billion).
Under the deal structure that would create the 15th biggest drugmaker globally, the Japanese firm would acquire the entire 34.82 per cent stake in the Gurgaon-based firm from its current promoters Malvinder Singh and family.
Besides, Daiichi would also make an open offer for an additional 20 per cent stake in Ranbaxy at a price of Rs 737 per share which represents a premium of over 50 per cent on the average price over the last three months.
Post this offer, the deal would value Ranbaxy at about $8.5 billion (over Rs 36,000 crore). The purchase of shares from the promoters and through the open offer is expected to value the deal between $3.4 billiona and $4.6 billion, the two firms said in a joint statement.
Even as Malvinder Singh would continue as CEO and MD of the entity, which would retain its Ranbaxy brand, the family would net in about Rs 10,000 crore *Rs 100 billion) by selling their stake.
Singh would also assume the position of chairman of the board upon the deal's closure that is expected by March 2009.
Besides the promoters' 34.8 per cent stake, Daiichi would also get about 9 per cent through issue of preferential allotment of shares and some warrants, which could be later converted into another 4.5 per cent holding. These, along with a minimum 8 per cent that the new promoters wish to acquire through the open offer, would take Daiichi's holding to above 50 per cent.
Post acquisition, Ranbaxy would become a debt-free firm with a cash surplus of around Rs 2,800 crore (Rs 28 billion).
The two firms said they plan to keep Ranbaxy a listed entity in India.
The combined market capitalisation of both companies would be around 30 billion dollars making it the world's 15th largest pharmaceutical company.
A binding share purchase and share subscription agreement was entered into by Daiichi Sankyo, Ranbaxy and the Singh family, Ranbaxy said.
"As the company moves into a next level of growth it would benefit the organisation, its shareholders and the employees," Ranbaxy CEO and Managing Director Malvinder Mohan Singh told reporters, while adding, "Now it is a clear opportunity ahead of us to leverage from each others' strengths."
The proposed open offer price of Rs 737 represents a premium of 53.5 per cent to Ranbaxy's average daily closing price on the NSE for the three months ending June 10, 2008.
Besides, the offer price is 31.4 per cent higher than Tuesday's closing price, Ranbaxy said.
"Malvinder Singh will continue to lead the company as its CEO and managing director, while additionally assuming the position of chairman of the board," Daiichi Sankyo president and CEO Takashi Shoda said.
The Japanese firm said there would be 10 members in the board and Ranbaxy would appoint four members, including Malvinder Singh, while the rest of the members would be from Daiichi Sankyo.
"Daiichi Sankyo has operations in 21 countries and by entering into agreement with Ranbaxy, we will have presence in now 60 countries globally," Shoda said.
Commenting on the deal, Singh said it puts Ranbaxy on a new and much stronger platform to harness its capabilities in drug development, manufacturing and global reach.
"With this, we will see significant growth in our business in Japan as the generic drugs market in the country is also opening up," he said.
Explaining the deal Singh said, post closing Ranbaxy would continued to remain an independent identity and all the strategic tie-ups of the company including the deals with Zenotech, Orchid and Merck would remain unaffected.
The hived-off research and developed division of the firm would also continued to be remained the part of the company.
"Together with our pool of scientific, technical and managerial resources and talent, we would enter a new orbit to chart a higher trajectory of sustainable growth in the medium and long term in the developed and emerging markets organically and inorganically," he said.

Assignment Topics

Strategic Management

Assignment Topics

1. Model of Strategic Management
2. Role of Board of Directors and Top Management
3. Social Responsibilities of Strategic Decision Makers
4. Societal Environment Analysis
5. Porter’s Approach to Industry Analysis
6. Strategic Groups
7. Value Chain Analysis
8. Strategic Audit
9. IFAS,EFAS & SFAS
10. TOWS Matrix
11. Competitive Strategies
12. Cooperative Strategies
13. Corporate Directional Strategies
14. Growth, Stability and Retrenchment Strategies
15. Portfolio Analysis
16. Functional Strategies
17. Stages of Corporate Development
18. Types of Organizational Structure
19. Managing Corporate Culture
20. Measuring and Problems in Measuring Performance