Daily Excelsior...Business

Enron’s exit countdown begins from Nov 19, 2001

MUMBAI, Aug 12: The countdown for US energy major Enron’s exit from India will begin from November 19, 2001, after which its Dabhol Power.......more

FIIs net buyers in
equities at Rs 168.5 cr,
stay away in debt

MUMBAI, Aug 12: The Foreign Institutional Investors (FIIs) were net buyers in equities to the tune of Rs 168.5 crore (USD 35.7 million) even as they . ....more

IIP to grow at 4.5 pc in
2001-02 despite slowdown

MUMBAI, Aug 12: Notwithstanding slowdown in the manufacturing sector in the April-May 2001, the Index for Industrial Production (IIP) is likely to grow .....more

Inflation remains
stuck at 4.96 pc

NEW DELHI, Aug 12: The annual inflation rate stood firm at the previous week’s level of 4.96 per cent in the week ....more

Demand for enhanced
ceiling for MPLADS
scheme turned down

NEW DELHI, Aug 12: Government has turned down the recommendation of a parliamentary committee to enhance........more

AIADMK Chief Jayalalithaa

CHENNAI, Aug 12: NDA convenor George Fernandes today ....more

Volvo approaches HC
to protect its brand name

NEW DELHI, Aug 12: Swedish automobile major A B Volvo had to approach Delhi High Court to protect its brand name. .....more

Enron’s exit countdown begins from Nov 19, 2001

MUMBAI, Aug 12: The countdown for US energy major Enron’s exit from India will begin from November 19, 2001, after which its Dabhol Power Company (DPC) will serve a termination notice to MSEB even if a buyer is not found for the USD three billion power project in Maharashtra.

‘We are not in the business of litigation but of selling energy worldwide. November 19 is our exit path and no way are we going to take a merchant risk in the power purchase agreement’, Enron India chief K Wade Cline told PTI in an interview here.

‘I surely have a distressed asset but not a distressed PPA’, he emphasised.

DPC’s May 19 pre-termination notice to MSEB expires on November 19, after which the US energy major would approach its lenders for a go-ahead on issuance of the final termination notice. DPC has been incurring extra expenses to the tune of half million USD per month as interest charges, he said adding ‘my options are very clear—either the centre finds a buyer for the project or we renegotiate or terminate the PPA’.

The multinational was also willing to help the centre scout for a buyer.

‘Contrary to media reports, DPC’s rate of return in dollar terms is a mere six and half per cent... We are not a debt collections company. We too have to show our face to the shareholders who expect a healthy return on their overseas investments’, Cline said.

When asked whether DPC had agreed to waive off the rupee-dollar parity in order to reduce tariffs, Cline said, ‘if you want to get rid of foreign equity from this country and do not want a dollar linkage, please do all investment in Indian currency only’.

He said the rupee-dollar parity would disappear if an Indian company buys out the project.

‘The project then also could be run on a 30 per cent plant load factor...Believe me no foreign guys are going to do that’, the Managing Director said.

However, Cline said apart from wanting to sell its USD three billion asset for USD one billion ‘at cost and no profit’ basis, DPC was ready to complete the project before calling it a day from Dabhol.

‘Though we are looking at exit routes, DPC is ready to get the original contractors and ensure completion of the project as the original designs and drawings of the plant are not with the company, but with them’, he added.

Over the fate of DPC’s LNG carrier ‘Laxmi’, the Managing Director said the Mitsui-osk Line Consortium was looking at various options like deferring its delivery or even diverting it to other markets.

‘Laxmi is undergoing sea trials, however its lenders have also stopped disbursal of the funds for the carrier’, Cline added.

Several factors, including the announcement of a judicial probe by Maharashtra, strengthened the mulinational’s decision to quit the project. (PTI)

FIIs net buyers in equities at Rs 168.5 cr,
stay away in debt

MUMBAI, Aug 12: The Foreign Institutional Investors (FIIs) were net buyers in equities to the tune of Rs 168.5 crore (USD 35.7 million) even as they preferred to stay away from the debt market for the trading week ended August 10.

FIIs, in the whole trading week, only transacted in offloading activity worth Rs 1.7 crore (USD 0.4 mn) for debt on August six, thus remaining net sellers at the same amount, according to data available with the Securities and Exchange Board of India (SEBI).

The foreign funds were net buyers on all the five days in equities.

Mutual funds, on the other hand, were net sellers in equities at Rs 139.4 crore and net buyers in debt at Rs 72.34 crore as per the data for four days beginning August six.

In the reporting week, Standard & Poor’s downgraded India’s sovereign credit rating outlook for both local and foreign currency to ‘negative’ from ‘stable’ while Moody’s lowered the outlook for country’s foreign currency to ‘stable’ from ‘positive’ and for domestic debt to ‘negative’ from ‘positive’.

On August six, the foreign funds bought and offloaded equities worth Rs 178.5 crore and Rs 124.8 crore respectively, thus turning net buyers at Rs 53.7 crore (USD 11.4 mn) followed by Rs 39.6 crore (USD 8.4 mn) on August eight.

The BSE-30 share sensitive index opened barely steady at 3323.36 and was trapped in a narrow breadth of 3356.34 and 3279.62 before ending the week at 3316.21 compared with last week’s close of 3325.38, a loss of 0.28 per cent.

Mutual funds, on the equity side, were net sellers on all the four days with the highest being on August nine at Rs 46.96 crore.

On August seven, MFs bought equities worth Rs 15.92 crore while selling them to the extent of Rs 55.30 crore, turning into net sellers at Rs 39.38 crore.

With the debt instruments, MFs recorded their highest net purchases on the first day of the week at Rs 51.96 crore. (PTI)

IIP to grow at 4.5 pc in 2001-02 despite slowdown

MUMBAI, Aug 12: Notwithstanding slowdown in the manufacturing sector in the April-May 2001, the Index for Industrial Production (IIP) is likely to grow at 4.5 per cent in the current fiscal, according to Centre for Monitoring Indian Economy (CMIE).

‘The first quarter seems to be headed for a slowdown in industrial growth. Notwithstanding the gloomy tenor, we expect some sectors to post growth and iip to grow by 4.5 per cent in 2001-02’, CMIE said in a monthly review (August) of Indian economy.

The IIP grew at a low of 2.6 per cent compared to 6.2 per cent in the same period last year, CMIE said.

Yesterday’s Government data for June 2001 showed that the IIP plummeted to 1.5 per cent (5.9 per cent in June 2000).

Early indications are that a better monsoon would boost the farm produce with a salutary effect on rural incomes visible towards end of this fiscal, CMIE said.

In April-May, first sectors that posted lower growth included chemicals, basic metals, machinery and vehicles industry. However, some sectors like man-made textiles, paper product bettered their performance over same period of last fiscal, it said.

Indian industry is faced with depressed purchasing power in the rural and urban areas and declines in agricultural production for the two years of 1999-2000 and 2000-01 affected rural demand, CMIE said.

The substantial wealth erosion caused by the fall in the equities and real estate markets hampered the average urban consumer’s inclination to spend. (PTI)

Inflation remains stuck at 4.96 pc

NEW DELHI, Aug 12: The annual inflation rate stood firm at the previous week’s level of 4.96 per cent in the week ended July 28 even as primary articles became costlier due to a sharp one per cent rise in the price of food items.

The point-to-point inflation rate based on Wholesale Price Index (WPI) for all commodities (base: 1993-94 = 100) was firm mainly on account of stickiness in the price of fuel and manufactured products. The index was, however, comparatively higher at 6.61 per cent in the previous year.

The WPI rose marginally by 0.1 per cent to 160.9 from 160.8 in the previous week. The index was 153.3 a year ago.

The final WPI was marginally down to 160.5 compared to the provisional figurinal inflation rate stood lower at 5.45 per cent as against the provisional level of 5.52 per cent.

Primary articles became costlier by 0.2 per cent, while fuel and manufactured stood unchanged at the previous week’s mark.

The index for primary articles’ group rose to 168.6 from 168.2 on account of one per cent rise in the price of food articles. The index was 164 in the previous year.

Food articles’ group index rose to 175.5 from 173.8 due to higher prices for fish-inland (22 per cent), jowar (four per cent), ragi (two per cent) and maize, moong, eggs and condiments an spices (one per cent each), while there was one per cent dip in the price of bajra.

The index for non-food articles’ group fell drastically by near two per cent to 155.3 from 158.2 due to cheaper niger seed (15 per cent), groundnut seed (11 per cent), raw jute (three per cent) and hides raw and tobacco (one per cent each), while there was price hike for kardi seed (six per cent), linseed (four per cent), raw rubber (two per cent) and castor seed and soyabean (one per cent each).

Fuel, power, lights and lubricants’ group index remained firm at the previous week’s figure of 222.3 and the index was 194.4 in the previous year. The group after a 17-week solitude had fallen marginally last week from 222.7 a week before.

The index for manufactured products’ group remained firm at the previous week’s figure of 144.5 despite increase in the price of food products, beverages and chemicals. The index was 140.5 a year ago.

Food products’ group index rose by 0.1 per cent to 146.9 from 146.8 as prices rose for hydrogenated vanaspati (two per cent), maida, sooji (rawa), gingelly oil and groundnut oil (one per cent each).

But there was decline in the price of all kinds of bran (two per cent), khandsari, solvent extracted groundnut oil, coconut oil and cattle feed (one per cent each). (PTI)

Demand for enhanced ceiling for MPLADS scheme turned down

NEW DELHI, Aug 12: Government has turned down the recommendation of a parliamentary committee to enhance the Member of Parliament Local Area Development Scheme (MPLADS) entitlement from the present Rs 2 crore per year to Rs 4 crore even as it conceded the demand of the nominated members to allow them to spend their allocation under the scheme anywhere in the country.

The committee headed by former Commerce Minister B B Ramaiah in its recommendation stated that despite the enhancement of amount under the scheme from Rs 1 crore to Rs 2 crore in December 1998, the committee felt that the enhanced amount is "just not sufficient to implement developmental schemes based on the locally felt needs of the constituents".

The Government, however, turned down the proposal saying it had already stated the reasons for not accepting the demand in a discussion in Parliament.

The Centre accepted the recommendation of allowing nominated members to utilise their fund allocation under MPLADS anywhere in the country.

"The committee noted the position stated by the Ministry of Statistics and Programme Implementation that nominated members have represented that they should be allowed to recommend works throughout the country on the plea that they are the presidential nominees and represent whole of the country and not a particular state", it said.

Similarly, the nominated members of Lok Sabha in particular have been arguing that they represent the Anglo-Indian community, which is scattered all over the country, and they should be allowed to spend the funding anywhere in the country, the committee said. (PTI)

CHENNAI, Aug 12: NDA convenor George Fernandes today said sacked UTI Chairman P S Subramanyam had been appointed to the post on the recommendation of AIADMK chief Jayalalithaa in 1999.

"She (Jayalalithaa) gave the name. I myself wrote it down and forwarded it to PMO. Jayalalithaa insisted on his name", Fernandes, who was here enroute to Maduranthakam, 80-kms from here, told reporters while responding to a question on Jayalalithaa’s denial of having any `nexus’ with Subramanyam.

In a statement here yesterday, Jayalalithaa had denied nexus between her and Subramanyam saying she did not even know him.

AIADMK was an ally of the coalition Government headed by the BJP at the centre during 1999. (PTI)

Volvo approaches HC to protect its brand name

NEW DELHI, Aug 12: Swedish automobile major A B Volvo had to approach Delhi High Court to protect its brand name "Volvo" after its effort to stop an Indian garment manufacturer from using the mark for its denim failed.

After three years of legal wrangle, the Swedish company got respite as the court retrained Delhi-based Shayoka fashions from carrying their business under the trade mark "Volvo".

"I am satisfied that A B Volvo have made out a case for ex parte injunction and in case no injunction is granted, they may suffer irreparable loss," Justice A K Sikri said in a recent order.

"The defendants (Shayoka fashions), their agents are hereby restrained from manufacturing, selling, advertising etc or dealing with in clothing or any other products with the trade mark Volvo or under any other mark which is similar to Swedish company’s trade mark Volvo," the court said.

A B Volvo’s advocate Pravin Anand said that apart from manufacturing and sale of automobiles of various kinds, Swedish company was also using the trade mark "Volvo" in respect of their other promotional goods including garments.

He alleged that local company has also started using the trade mark "Volvo" for garments which amounts to infringement of the trade mark of the foreign company also registered in India.

A B Volvo alleged that after getting the legal notice in may 1998, the Delhi-based garment firm stopped manufacturing and marketing the goods under the trade mark "Volvo" but they restarted their business using the same brand name in December last. (PTI)