JP Morgan,Goldman Sachs propose to buy stake in GHC

Private equity firms including J P Morgan and Goldman Sachs and telecom majors Nokia, Ericsson, Huawei and ZTE have proposed to pick up 22 per cent stake in Global Holding Corporation (GHC), which has two listed firms GTL Ltd and GTL Infrastructure and three unlisted entities.GHC has two other wholly-owned subsidiaries, Global Projects and Global Innovsource and 90 per cent stake in tower manufacturing arm Global Towers.

According to sources, in October last year, GHC diluted eight per cent stake for $150million to Technology Infrastructure, an offshore fund. Now it intends to dilute additional 22 per cent stake to raise around $700 million.

The market capitalisation of the two listed entities was $1.7 billion as on June 31, 2008. The Group recorded in excess of $600 million revenue last fiscal. The company had early this year said that promoters intend to dilute anywhere between nine to 30 per cent stake in GHC to raise $150-$500 million for increasing promoters stake in the listed firms.

GHC currently holds 44 per cent in GTL Ltd and 23 per cent in GTL Infrastructure. GTL Ltd in turn owns 41 per cent in GTL Infrastructure. GHC promoters have infused $101.76 million since March 2006 to enhance their stake in GTL Ltd through creeping acquisition from 26 per cent earlier. Promoters intend to increase GHCs stake in GTL Ltd to 69 per cent and to 51 per cent in GTL Infrastructure directly.

Goldman, Shriram Group call off deal

The investment arm of US investor and the Chennai-based Shriram Group have called off the much hyped stakesale in the latter believed to be due to valuation differences.Sources familiar with the development said that the deal ran into rough weather, after Goldman wanted to revisit the valuation of Shriram group company. With falling markets, it is but natural that deals get re-visited.

In March this year, Goldman Sachs, announced it was picking up a 20% stake in Chennai-based Shriram Credit for Rs 300 crore, thereby making an indirect entry into equity and commodity brokerage business in India. Shriram Credit is a non-banking finance company (NBFC) under Shriram Group, which is engaged in lending activities.

Read more in The Economic Times article.

Related Story:
Goldman Sachs picks up 20% in Shriram Credit for Rs 300 cr

Goldman Sachs picks up 20% in Shriram Credit for Rs 300 cr

One of the world’s largest investment banking firms, Goldman Sachs, is picking up a 20% stake in Chennai-based Shriram Credit for Rs 300 crore, making an indirect entry into equity and commodity brokerage business in India. Shriram Credit is a non-banking finance company (NBFC) under the south India-based Shriram Group, which is engaged in lending activities.

The Indian group is transferring its brokerage and distribution services business to Shriram Credit and bringing in Goldman Sachs as a significant minority partner. The deal values the firm at Rs 1,500 crore ($375 million). Goldman Sachs is routing the deal through its 100% Mauritius-based subsidiary GS Strategic Investments.

According to company sources as per the initial agreement, the US-based I-banking firm also reserves the right to further expand its equity stake by 5% to take its stake in Shriram Credit to 25%. The transaction will be through a preferential allotment to Goldman Sachs.

Read more in


The Economic Times article.

PTC raises Rs1200cr via placements

PTC India, the country’s leading power trading company, has raised Rs 1,200 crore through the qualified institutional placement (QIP) route.The company has allotted 7.41 crore equity shares of Rs 10 each at an issue price of Rs 155 per share aggregating Rs 1,199.94 crore in favour of qualified institutional buyers (QIBs).

The company intends to use the net proceeds of the issue for enhancing the capital adequacy, capitalisation of PTC Financial Services, investment in fuel intermediation, investments in entities in the energy sector along with meeting the working capital requirements.

ABN AMRO Securities and Kotak Mahindra Capital acted as the book running lead managers (BRLMs) for the issue. Post-issue PTC India’s paid-up capital has been raised to Rs 227.41 crore from Rs 150 crore.

Earlier, PTC India’s subsidiary - PTC India Financial Services Limited (PFSL), had placed 20% each with Goldman Sachs and Macquarie India Holdings(Related Story). PFSL is a non public deposit taking NBFC and has been set up to undertake investments across the Indian energy value chain.The FIPB has already granted PFSL the approval for equity participation from Goldman Sachs and Macquarie for up to 40% of the paid up capital of PFSL.

PTC to divest 40% in its arm

PTC, formerly known as Power Trading Corporation, has raised Rs 155.74 crore by diluting 40% stake in PTC Financial Services (PFS) to Goldman Sachs and Macquarie India Holdings.

As part of the agreement, the two financial investors acquired 20% stake each at Rs 16 per share which is 60% premium to the face value of the shares and pegs the company’s valuation at Rs 389.35 crore.

The firm has already picked 26% stake in Indian Energy Exchange, the country’s first power exchange. In addition, PFS is expected to invest in greenfield and brownfield power generation assets, power transmission and distribution assets, apart from energy related infrastructure assets such as gas pipelines, fuel linked ports and electricity equipment.

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FT, PTC India to launch power exchange

Goldman values Tejas at $625 million

Tejas Networks, the Rs 240 crore Bangalore-based optical networking firm which makes proprietary boxes for transmitting data for telecom carriers, has been valued at Rs 2,400 crore ($625 million) by Goldman Sachs when it recently invested around Rs 95 crore.The investment by Goldman Sachs in the firm takes the total private equity investments in the company to Rs 280 crore ($73 million).

Tejas is aiming to go public next year and its valuation is expected to be close to Rs 3,200 crore ($800 million), when it will have a topline of around Rs 400 crore.
According to industry information, around 10-15 per cent is expected to be offloaded, with Tejas raising around Rs 300 crore in the process. Tejas Networks offered not to comment on the valuation by Goldman Sachs.

Other private equity investors, include Sandstone, Intel Capital. Mayfield Ventures, Battery Ventures, SUN Group of the Khemkas, besides ASG Omni. IL&FS Venture was among the early investors who have exited the firm. Tejas has Silicon Valley billionaire entrepreneur Gururaj Deshpande as its mentor and early-stage investor, besides his company Sycamore, also has an exposure.

Tejas Networks is among the few homebred firms focussing heavily on the Indian markets and counts almost all telecom service providers among its customers.

Read more in The Business Standard article.

Vatika sells 10% to 3 PE funds

Vatika Group, a Delhi-based realty firm, has divested 10.75 per cent for raising $250 million (Rs 1,000 crore) as private equity investments from Wachovia Bank, Baer Capital and Goldman Sachs. The deal estimates the valuation of the privately held Vatika at around Rs 9,302 crore.This is the first private equity investment in Vatika, which is planning its maiden public issue in 2009.

Vatika’s valuation at Rs 9,302 crore is higher than the market capitalisation of some listed bigwigs such as Bangalore-based Sobha Developers (Rs 6,269 crore) and Purvankara (8,284 crore); its Delhi peers such as Parsvnath Developers (Rs 6,398 crore), Omaxe (Rs 7,111 crore) and AnantRaj (Rs 8,557 crore) and the Mumbai-headquartered companies such as Akruti City (Rs 7,705 crore).

Read more in The Business Standard article.

IFCI raises bar for strategic investor

IFCI Ltd, the troubled term lender that has started the process of inducting a strategic partner, has agreed to its creditor banks’ demands to convert all their debenture holdings into equity shares.

This formula, which is expected to be ratified at a board meeting on December 1, could jeopardise the prospective partner's attempt to gain management control at the New Delhi-based institution.

The short-listed bidders for a stake in IFCI include Blackstone Group, General Electric Capital Corporation, billionaire Wilbur Ross along with Goldman Sachs Group, Standard Chartered and HDFC, Cargill Financial Services Corporation, Natixis and Newbridge Asia. Their bids will be considered after the conversion issue is resolved.

Read more in The Business Standard article.

25 foreign investors line up for UTI AMC stake

Private equity firm Blackstone, Goldman Sachs, UBS, Citigroup, National Australian Bank and Shinsei Bank are likely bidders for an equity stake in India’s oldest fund house, UTI Asset Management Company (UTI AMC).

Close to 25 overseas institutional investors have evinced interest in picking up a stake in the country’s third largest mutual fund. UTI AMC plans to offload 20% stake through a private placement and 29% through an initial public offer. However, no single investor would be able to hold more than 5%.

The private placement is expected to be completed by January while the initial public offer is slated for February-March. The listing process has to be completed before March 31, 2008. The fund house could raise about Rs 6,000-8,000 crore through the combination of private placement and initial public offer.

Read more in The Economic Times article.

Goldman, Macquarie set to buy 40% in PTC arm for Rs 120 crore

PTC is selling a 40% stake in PTC Financial Services (PFS), the investment arm of power trading and advisory services company.The deal is expected to be in the region of Rs 120 crore.Two private equity players, Goldman Sachs and Macquaire would subscribe equal number (20% each) of shares in the company. PTC, formerly known as Power Trading Corporation, is diversifying beyond its traditional power trading business.

PFS Registered as a non-banking finance company (NBFC), one of the main activities of which would be to pick up equity in power projects and facilitate financial closure.

PFS is expected to dilute its holding further by 26% when the capital of the NBFC is raised further, reducing the holdings of PTC to below 50%.The proposal received a huge response from investors forcing it to appoint a consultant to finalise the equity partners for PFS.PTC was also engaged in talks with Blackstone, Soloman Brothers and a few other private equity players for roping them as strategic partner in PFS.

Read more in The Economic Times article.

Goldman Sachs eyes 33% stake in Bhatia’s Nano City

US-based financial services major Goldman Sachs is learnt to be in talks with Hotmail co-founder Sabeer Bhatia to acquire about 33% stake in his ambitious Nano City project in Haryana. Sources said that the firm is looking at an investment of about $125-150 million.

The Nano City is being developed in Panipat, in a 90:10 joint venture (JV) between Mr Bhatia’s Nanoworks Developers and the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC). The corporation holds 10% sweat equity in the Nano City for providing 25% of the land required. The project will be developed over 11,000 acres.

Only Nanoworks Developers will dilute its equity for the investment by Goldman Sachs and HSIIDC will hold on to its 10%.The fund infusion by Goldman Sachs or any other investor will help the developers speed up the multi-year project. In all, the Nano City is estimated to be developed at an investment of Rs 1,850 crore. Of this, over Rs 800 crore will go towards buying the land.

Read more in The Economic Times article.

IDFC in race for IFCI`s 26% stake

Infrastructure Development Finance Company (IDFC), an investor in public works, is interested in IFCI, competing with the Blackstone Group and General Electric Capital Corporation for a stake in the state-run project financier.

The winner of the 26 per cent IFCI stake will gain access to a market where lending grew 28 per cent last year, and where the central bank limits foreign banks’ ownership of local private rivals to 5 per cent. IFCI, bailed out by the government in 2003 because of bad debts, in July announced plans to sell stake to a local or overseas investor to bolster its capital

Other bidders including a group led by billionaire Wilbur Ross and comprising the Goldman Sachs Group, Standard Chartered and HDFC, were vying with Cargill Financial Services Corporation, Natixis and Newbridge Asia for the stake, IFCI said last month.

Read more in The Business Standard article.

Blackstone, GE Capital, HDFC expected to bid for stake in IFCI

Manager of the world’s biggest buyout fund Blackstone Group LP., General Electric Capital Corp. and a group led by billionaire Wilbur Ross are among investors who may bid for a 26% stake in India’s oldest state-owned project financier, the Industrial Finance Corporation of India Ltd (IFCI).

Ross’s group, including Goldman Sachs Group Inc., Standard Chartered Plc. and Housing Development Finance Corp. Ltd (HDFC), is vying with Cargill Financial Services Corp., Natixis SA and Newbridge Asia HT LP, IFCI said in a statement to the Bombay Stock Exchange (BSE).

The successful bidder would gain access to a market where lending grew 28% last year, and where the Reserve Bank of India (RBI) limits foreign banks’ ownership of local private rivals to 5%.IFCI, which was bailed out by the government in 2003 because of bad debts, in July announced plans to sell a stake to a local or overseas investor to bolster its capital.

Other potential bidders for a stake in IFCI include a group comprising Sterlite Industries (India) Ltd and Morgan Stanley, and a team consisting of Japan’s Shinsei Bank Ltd, India’s Punjab National Bank Ltd and J.C. Flowers & Co., IFCI said. Kotak Mahindra Bank Ltd and Infrastructure Development Finance Co. (IDFC) may also submit offers, the lender said.

Read more in The Livemint article.

United Phos, Rallis eye $2 bn buy in Japan

Another big-ticket global acquisition by an Indian company is brewing. United Phosphorus and Tata Group enterprise Rallis India are in the race to acquire the world’s largest privately held crop protection and life sciences firm, Arysta LifeScience Corporation, from private equity firm Olympus Capital Holdings.

Sources close to the development said these two Indian companies were among the six contenders for the Tokyo-based firm. The acquisition is expected to cost nearly $2 billion (Rs 8,200 crore), or nearly double Arysta's turnover of 124.1 billion yen (Rs 4,400 crore) last year.

Other bidders include an Israeli firm, Australia’s Nufarm and Blackstone, the global private equity fund.

Olympus has put Arysta on the block and has appointed investment banks Goldman Sachs and Lehman Brothers for the sale. It had bought 8.7 per cent of Arysta in 2002 for around $80 million (Rs 320 crore). Since then, it has been gradually building up its stake.

Read more in The Business Standard article.

State-Run Power Finance Corp In Talks With Goldman, Blackstone For $1-B Fund

The Indian government-owned Power Finance Corp (PFC) plans to launch a private equity fund for investing in the domestic power sector. PFC is reportedly in talks with leading investment bankers including Goldman Sachs for raising the fund. The fund, which is expected to have $1 billion in corpus, is intended to support the last-mile equity requirement of power projects.

The fund is likely to be registered in overseas tax havens like Mauritius, Cyprus or Isle of Mann to get maximum tax benefits for the investors and encourage them to increase exposure to the power sector.Mauritius is apparently the first priority for the company.

All the approvals from the power and finance ministries have been obtained and the company may announce the fund later this month, the report adds. The power sector needs a about $250 billion investment, while it needs at least $75 billion in equity support.

ICICI to raise $1.5 bn in loans

ICICI Ltd is raising $1.5 billion via a yen-denominated loan-the country's biggest offshore loan for a financial borrower, sources familiar with the deal said.

The loan has three equal-sized maturity buckets to fund general corporate purposes. The five-year portion is the longest maturing loan to be issued by ICICI. ICICI, already Asia's biggest issuer outside of Japan in the offshore bond market this year, is trying to feed fast-growing India's frenzied loan market as deposit growth struggles to keep pace.

Lending by Indian banks is growing at an annual pace of 29 per cent, but deposit growth is a more modest 20 per cent. The issue is being arranged by Bayern LB, BNP Paribas, Calyon, Commerzbank, Goldman Sachs, HSBC, Intesa Sanpaolo, Natixis, Standard Chartered Bank and Sumitomo Mitsui Banking Corp.

The 364-day tranche will pay 15 basis points (bps) over the one-year London Interbank Offered Rate (LIBOR); the three-year tranche will pay 38 bps over LIBOR; and, the five-year tranche will pay 55 bps over LIBOR.

The bank plans to complete the syndication of the loan by the first week of September. ICICI's offshore senior debt is rated BBB-minus by Standard & Poor's Ratings Services.

ICICI may offer stake in holding company

With the government yet to approve foreign holding in ICICI Financial Services, ICICI Bank may look at options to rope in domestic investors in the holding company. An application for offering a slice of the holding company’s equity to overseas investors is stuck with the Foreign Investment Promotion Board (FIPB).

Sources said the bank had sensed interest among local institutional proprietary investors in the holding company. The bank had applied to the FIPB to get 24% foreign investment in ICICI Financial. It is also looking at listing this entity in the future. ICICI Bank had also received firm commitments of Rs 2,650 crore ($650 million) for a 5.9% stake in ICICI Financial. This put the holding company’s valuation at $10.94 billion. The investors, who have agreed to pick up stakes, include Goldman Sachs, Swiss Re and Nomura, along with two more overseas investors. Of this, Goldman Sachs has agreed to pick up a 2.02% stake. Over 70% of the value of ICICI Holdings is expected to come on account of ICICI Prudential — the largest private life insurance company in India. Although it’s yet to show profits, the high growth in the insurancebusiness and a 7% market share have helped in the valuation of the holding company. The holding company will own ICICI Bank’s stake in insurance and mutual fund JVs.

Read more in The Economic Times article.

IDFC raises Rs2,100 cr through QIP route

The Board of state-run lender IFCI will consider a proposal on 6 July to invite preliminary bids for selling at least 26% stake to a strategic investor.Along with annual results, the board would take up the issue of inviting expression of interests (EoI) from strategic investors.

The lender has appointed management consultant Ernst & Young to look for the strategic investor. E&Y has been asked to suggest names of strategic investors and will help IFCI in carrying out modalities related with stake sale.

According to the plan, strategic investors will have to make bids within a month of the memorandum of information being made public. Following this, IFCI will shortlist some investors. These investors will be allowed to do a detailed due diligence and submit a fresh bid indicating the price they are willing to pay for the 26% stake.
Based on the second round of bids, the IFCI board will decide on the new stakeholder.
As a precusor to stake sale, IFCI had in May passed an enabling resolution to increase foreign holding in the company up to 74% of its share capital.

Foreign investors Morgan Stanley (2.5%), Goldman Sachs (3.3%), Citigroup (2.5%) and Deutsche Securities (4.61%) already have equity interest in IFCI.Eleven financial institutions, domestic and overseas, hold 34.8% in the company as on 31 March, which includes 8.4% and 5.01% held by LIC and IDBI respectively.

Credit Suisse wins merchant banking licence

Credit Suisse, one of the world's top investment banks, said on Wednesday it had obtained its Indian merchant banking licence, allowing it to underwrite domestic stock and bond deals in the booming market.

Credit Suisse, which hired V. Anantharaman to lead its Indian investment banking team in October, launched its domestic brokerage operations in March 2007.The firm was hit with a two-year securities trading suspension in India in 2001, with domestic regulators alleging it had violated rules on price manipulation.

Credit's Suisse's licence comes at a time when rivals like Goldman Sachs, Merrill Lynch and Morgan Stanley are expanding their Indian operations to take advantage of booming cross-border M&A deals and securities issuance.

Those three firms have all recently detached from their local partners to go it alone in the market, while firms like Lehman Brothers are building up their franchises, leading to a war for talent in the banking sector.

Read more in The DNA Money article.

IVRCL Infrastructure proposes Rs2,000 cr IPO for realty arm

IVRCL Infrastructures & Projects Ltd, the Hyderabad-based infrastructure company, plans to go in for an initial public offering (IPO) for its real estate subsidiary IVR Prime Urban Developers Ltd to raise Rs2,000 crore, in continuation of a trend of real estate firms tapping the capital market—DLF Ltd’s Rs9,187 crore IPO, in early June, was oversubscribed 3.5 times. Another developer, Housing Development and Infrastructure Ltd, is seeking to raise Rs1,485 crore through an IPO that is already oversubscribed and which closes on Tuesday.

IVR Prime is in the business of constructing urban infrastructure, typically residential apartments and hotels. “We have certain plans for our real estate arm. In order to realize those plans, we have to raise money,” added Ramachandran. IVRCL Infrastructures, which has an 80% stake in IVR Prime, plans to dilute 20% of its holding in the IPO; the balance 20% is held by the family of the company’s promoter, Sudhir Reddy. Foreign institutional investors such as Citigroup, HSBC, Merrill Lynch, Goldman Sachs and UBS Securities together hold a majority 87.5% stake in IVRCL Infrastructures.

Read more in The Livemint article.