LONDON, May 10: GlaxoSmithKline will take its 2.6 billion dollars bid for long-time partner Human Genome Sciences direct to shareholders this week, after its takeover offer was rejected last month by the US biotech group’s board. The decision to go hostile with the $13-a-share cash tender offer sets up GSK for a potentially lengthy battle with those Human Genome investors who believe it is not offering enough. (agencies)
US may speed approval of “breakthrough” drugs
WASHINGTON, May 10: Experimental drugs that show a big effect early in development for treating serious or life-threatening diseases would get a faster and cheaper path to US approval, under a proposal likely to become law this year. US drug regulators would be able to label such treatments “breakthrough” therapies, and work with companies to speed up clinical trials, for example by testing the drugs for a shorter time or enrolling fewer patients. (agencies)
Etihad Airways to launch flights to Ahmedabad
DUBAI, May 10: Abu Dhabi-based Etihad Airways has announced that the airline will start flying to Ahmedabad in November. Flights will operate daily between Abu Dhabi and Ahmedabad, the airline’s ninth destination in India.
Etihad’s new service to Ahmedabad will offer nearly 1,000 seats a week into the Gujarati city, Etihad Airways’ President and CEO James Hogan said.
The airline will also add a flight to Ethiopian capital of Addis Ababa in the same month.
“We continue to build strength and depth to our global network and the addition of Addis Ababa, a major East African hub, and Ahmedabad, the fifth-largest city in India, will make significant contributions to traffic flows to Abu Dhabi and beyond,” he said.
The two new cities will expand the airline’s reach to 86 passenger and cargo destinations around the world. The new routes will each be served by an Airbus A320 aircraft.
“Addis Ababa and Ahmedabad are economic centres in their respective countries and daily flights to Abu Dhabi will build greater ties with the UAE’s capital as it continues to invest in world-class development projects and attract business and leisure travellers,” Hogan added.
Flights between Abu Dhabi and Addis Ababa, its ninth destination in Africa, will initially operate five times a week, increasing to daily in 2013.
The A320 aircraft that will serve Addis Ababa and Ahmedabad have two cabins with 16 Business Class seats and 120 Coral Economy Class seats. (PTI)
Oil cos demand subsidy for petrol losses
NEW DELHI, May 10:With losses on sale of petrol climbing to over Rs 7 a litre, state-owned oil firms have asked the government to either provide subsidy on the fuel or reduce excise duty.
“The public sector oil marketing companies have not revised the price of petrol since December 1, 2011, in spite of sharp increase in international prices of petroleum products,” Minister of State for Petroleum and Natural Gas R P N Singh told the Lok Sabha here today.
The current retail selling price of Rs 65.64 per litre in Delhi is short of actual cost by Rs 8.60 a litre.
“There is an under recovery of Rs 7.17 per litre on sale of petrol,” Singh said. After adding 20 per cent local sales tax or VAT, the desired increase in petrol price comes to Rs 8.60 per litre.
“In order to mitigate losses on sale of petrol, oil marketing companies have, inter alia, suggested to the government to either declare petrol as a ‘regulated’ product temporarily and provide cash compensation (subsidy) for under- recovery or to reduce the excise duty on petrol from Rs 14.78 per litre by an amount equivalent to the under-recovery on petrol,” he said.
Singh, making the submission in a written reply to a question, said his ministry has taken up the matter with the Finance Ministry.
The government had freed pricing of petrol from its controls in June 2010 but rarely have the fuel rates moved in tandem with cost.
Petrol price were last revised on December 1 when the imported cost of the fuel was USD 109.30 a barrel. Since then global rates have climbed to about USD 120 per barrel.
At the last revision, oil firms cut rates by Rs 0.65 a litre on top of an earlier price reduction of Rs 1.85 per litre effected from November 16, 2011.
Oil firms had lost Rs 4,859 crore on selling petrol below cost in 2011-12 fiscal. This was over and above Rs 138,541 crore they lost on selling diesel, domestic LPG and kerosene below market price in the fiscal.
“The public sector oil marketing companies have incurred under-recovery (revenue loss) of Rs 138,541 crore during 2011-12, which is 77 per cent more than the under-recovery of Rs 78,190 crore for 2010-11,” Singh said.
Of the total under-recovery, the government has so far provided only Rs 45,000 crore in cash subsidy, he said adding in 2010-11, the government gave cash subsidy of Rs 41,000 crore or 52 per cent of the under-recovery. (PTI)
RBI fixes limit of authorised dealers
MUMBAI, May 10:In another move to stem the fall of the Rupee, which opened at a record low of 53,88 today, the Reserve Bank of India has decided to fix the intra-day open position/daylight limit of Authorised Dealers at five times the Net Overnight Open Position Limit available to them or the existing Intra-day open position limit as approved by the central Bank, whichever is higher, for positions involving Rupee as one of the currencies.
The directions were given in a circular issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other lawm. The RBI said in a statement.(UNI)
Retrospective amendment to IT Act not to impact FDI: Basu
NEW DELHI, May 10:Chief Economic Advisor Kaushik Basu today said amending the Income Tax Act with retrospective effect will not impact foreign investments into India.
“I don’t think there is going to be any negative effect on investor sentiment at all,” Basu said while replying to a query on whether I-T Act amendment would harm foreign direct investments.
The finance ministry had proposed in the Budget to introduce a retrospective provision for tax on some types of international mergers.
“This is being seen as a one off thing… There were certain aberrations, certain misunderstandings on the law that we have adjusted,” Basu said.
Various corporate bodies from US and UK had cautioned that such tax proposals could dent India’s image as an investment hotspot.
The issue pertains to a Budget proposal to amend the Income Tax Act, 1961, with retrospective effect to bring into tax net overseas mergers and acquisitions involving assets in India. Such amendment will bring Vodafone type deals under the tax net.
FDI flows into India has continued unabated with a highest ever monthly inflow in March at USD 8.1 billion. Cumulative FDI inflows for the fiscal 2011-12 amounted to USD 36.50 billion. (PTI)
Steel Min allocates 7.09 LT steel for SSIs in FY’13
NEW DELHI, May 10:The Steel Ministry has fixed the quantity of iron and steel to be allocated to small-scale industries (SSIs) this fiscal at 7.09 lakh tonnes.
“Based on the allocation made in the year 2011-12, a quantity of 7.09 lakh tonnes of iron and steel material will be allocated to SSICs and NSIC for the year 2012-13,” the ministry said in a statement.
State small scale industries corporations (SSICs) and the National Small Industries Corporation (NSIC) allocate iron and steel, which is procured from producers like SAIL, RINL and Tata Steel, to SSIs and other government departments.
In order to ensure that small scale industries obtain these raw materials at reasonable prices, government provides handling charges of Rs 500-550 per tonne to corporations to ensure that they supply the material at the doorsteps of SSI units.
In 2011-12, the ministry had allocated 7.1 lakh tonnes steel to the small scale industries through the corporations, which are entitled to supply a maximum of 30 per cent of their allocated quantity to government agencies.
The government had allocated 6.99 lakh tonnes of steel in 2008-09 to SSI units, 7.43 lakh tonnes in 2009-10 and 7.66 lakh tonnes till December 31 of the 2010-11 fiscal.
However, there is no bar for the small units to procure steel directly from the buyers. But, their benefit of buying steel from the corporations is that they get their material at their doorsteps.
SSICs and NICS are not permitted to sell steel meant for SSIs to traders. In such a case, their payment for handling charges are discontinued and supplies stopped. (PTI)
India exported 11 million bales of cotton in Oct-May
NEW DELHI, May 10:India’s cotton exports stood at 11 million bales of 170 kg each in the first eight months of the 2011-12 marketing year, a top government official said today.
Eleven million bales of cotton have been exported between October 1, 2011 and May 7, 2012 in the current cotton marketing year, Commerce Secretary Rahul Khullar told reporters here.
Cotton marketing year runs from October to September.
Last month, the government allowed further cotton exports in 2011-12 marketing year as production estimates have been revised upwards.
In March, it had lifted the ban on exports but decided not to issue fresh registration of certificates (RCs). It only allowed shipments for which RCs were already issued before the ban was imposed on March 5.
Before the ban was imposed, the government had issued RCs for about 130 lakh bales.
According to the latest estimates of the Cotton Advisory Board (CAB), cotton production has been revised upwards to 34.7 million bales from 34.5 million bales for the current season.
The agriculture ministry has also revised upwards cotton output to 35.2 million bales from 34.08 million bales. (PTI)
Kingfisher Airlines ceases to be a subsidiary: UB Holdings
NEW DELHI, May 10:Vijay Mallya-led UB group’s United Breweries (Holdings) Ltd today said Kingfisher Airlines has ceased to be its subsidiary, but it had a significant exposure of over Rs 12,000 crore to the air carrier.
Announcing its financial results for the fourth quarter ended March 31, 2012, which saw its net profit plunging sharply by over 83 per cent to Rs 2.10 crore, UB Holdings said that Kingfisher ceased to be a subsidiary as on February 18, 2012, after the carrier alloted shares against optionally convertible debentures to certain entities.
Noting that it has given significant guarantees on behalf of its subsidiaries and associate companies, UB Holdings said that its exposure to Kingfisher Airlines totalled Rs 12,215.18 crore as on March 31, 2012.
The company’s exposure relating to Kingfisher Airlines is under various accounts including corporate guarantees to banks.
“The company has significant exposure on various counts to Kingfisher Airlines as on March 31, 2012. These include investment in equity/preference capital at Rs 2,118.48 crore, corporate guarantees to banks/aircraft lessors at Rs 8,925.86 crore,” the filing said.
Total exposure include “advances at Rs 1,029.75 crore and other receivables Rs 141.09 crore”, it said.
“Certain corporate guarantees have been invoked and Kingfisher Airlines is under negotiation in this regard with the beneficiaries,” the filing added.
As on December 31, 2011, UB Holdings’ stake in Kingfisher stood at 40.1 per cent, but it declined to 34.55 per cent on February 18, 2012 after an increase in the airline’s equity base pursuant to issue of shares to some entities in lieu of certain convertible bonds.
As per the latest shareholding pattern available with the BSE, UB Holdings’ stake in Kingfisher has declined further to 29.39 per cent as on April 24, 2012. The entire holding of UB Holdings in Kingfisher is as such pledged, the BSE data shows.
UB Holdings further said that the development of a luxury residential building ‘Kingfisher Towers-Residences at UB City’ is under progress and it has entered into agreements to sell part of this project.
The agreements have been reached with prospective buyers for sale of six units of 8,321 square feet at the project, where UB Holdings’ share is 4,18,388 square feet.
UB Holdings further said that its investment in subsidiaries have been considered as long term strategic investments and diminution in their market value, though significant is considered temporary in nature.
The company said guarantee commission has been accrued based on contractual obligation, although the recovery could take a longer period of time than what was anticipated.
UB Holdings has been giving significant guarantees on behalf of subsidiaries and other associated companies and advances to subsidiaries. No amount has so far devolved on the company, the filing said. (PTI)
Car sales see slowest Apr growth in 10 yrs at 3.4%
NEW DELHI, May 10:Passenger car sales in India witnessed slowest growth during April in 10 years at 3.4 per cent as customer sentiment remained low due to post-Budget price hikes and high interest rates, affecting the entry-level segment most.
According to figures released by the Society of Indian Automobile Manufacturers (SIAM) today, domestic passenger car sales stood at 1,68,351 units in April 2012 compared to 1,62,813 units in the same month last year.
“The growth in last month was sober, it is the slowest for April in the last 10 years. The price hike that was done after the excise duty was raised in the Budget and high interest rates have affected consumers’ sentiment,” SIAM Director General Vishnu Mathur told reporters here.
In April 2002, the auto industry had saw passenger car sales falling by 22 per cent, he added.
“The volume-driven small car segment is the worst hit in April with just 0.68 per cent rise. This segment is very price sensitive and slightest alterations impact it,” Mathur said.
The market will take some time to absorb this price hike that has affected other sectors also.
In the Budget 2012-13, the Government had hiked excise duty by 2 percentage points to 12 per cent that every automobile manufacturers passed on to customers. Besides, different duties were raised depending upon the vehicles’ engine and size specifications.
Total sales of vehicles across categories registered an increase of 10.01 per cent to 14,72,385 units in April as against 13,38,430 units in the same month last year.
“Overall growth in the industry was subdued. The first six months are going to be tough because if we expect any industry-friendly monetary policy, then it will happen in the second half only,” Mathur said.
In the passenger car segment, market leader Maruti Suzuki’s sales dipped by 1.31 per cent to 72,939 units.
However, rival Hyundai Motor India’s sales increased by 10.75 per cent to 35,000 units.
Homegrown auto major Tata Motors’ passenger car sales were down by 4.78 per cent at 18,610 units.
Total two-wheeler sales last month increased by 10.94 per cent to 11,57,108 units from 10,43,010 units in April 2011.
According to the SIAM data, motorcycle sales in the country grew 6.54 per cent during the month to 8,61,602 units from 8,08,728 units in the same month last year.
In this segment, market leader Hero MotoCorp posted 5.53 per cent jump in sales to 4,94,473 units in April. Rival Bajaj Auto’s sales went up by 2.17 per cent to 2,00,228 units during the month.
Honda Motorcycle & Scooter India (HMSI) posted a 35.69 per cent increase in sales to 77,665 units, while TVS Motor moved 50,863 units, 2.13 per cent more than the corresponding month of the previous year.
SIAM said the scooter segment’s overall sales grew by 30.29 per cent to 2,27,924 units from 1,74,931 units.
HMSI’s scooter sales grew by 55.64 per cent to 1,15,846 units, while Hero MotoCorp sold 40,354 units, up 15.44 per cent. TVS Motor’s sales saw marginal growth during the month to 32,736 units.
Commercial vehicles sales grew by 4.37 per cent to 56,257 units in the reported month from 53,903 units in the year-ago period, SIAM said.
Medium and Heavy Commercial Vehicle sales declined 11.60 per cent to 19,914 units during the month compared to 22,528 units in April last year.
According to SIAM, light commercial vehicle sales grew 15.83 per cent to 36,343 units in April 2012 from 31,375 units in April 2011.
In the three-wheeler category, sales fell by 5.35 per cent to 31,986 units from 33,793 units in the same month last year. (PTI)