Nomura to buy Lehman's Indian operations

Japan's top broker Nomura Holdings today announced that it had agreed to acquire Lehman Brothers' operations in India, giving jobs to 3,000 more workers from the bankrupt Wall Street giant.Nomura, which is already buying Lehman's operations in the Asia-Pacific, the Middle East and Europe, will take on the failed US bank's India-based back office and IT support businesses for an undisclosed sum.The subsidiaries, based in the financial hub of Mumbai, were not included in the earlier deal because they were under the wing of Lehman's North American business, which is being bought by the British bank Barclays.

Lehman to file for bankruptcy, plans to sell units

Lehman Brothers Holdings Inc said it plans to file for bankruptcy protection, but the Chapter 11 filing will not include its broker-dealer operations and other units, including Neuberger Berman.Lehman is looking at selling its broker-dealer operations, and is still in advanced discussions with a number of potential buyers of its investment management division.

Bankruptcy represents the end of a 158-year old company that survived world wars and the collapse of Long-Term Capital Management but could not survive the global credit crunch.Investors in recent weeks had grown increasingly jittery about Lehman's $46 billion of mortgages and asset-backed securities, as well as its credit rating and its ability to raise capital.

Lehman picks up 40 % in Peninsula Hyderabad IT Park

Global investor Lehman Brothers has picked up a 40 per cent stake in the upcoming IT park project of property developer Peninsula Land (PLL) in Hyderabad.Lehman is expected to pump nearly Rs 50 crore into the project. PLL is expected to hold the remaining 60 per cent.

The initial cost of the project, including land, is Rs 125 crore and the development cost is nearly Rs 1,400 crore. The company is planning to fund the project through debt and draw more funds from Lehman if required.

Recently, PLL and Lehman tied up to invest in the realty projects of Peninsula. In the Rs 700-crore joint venture, Lehman invested Rs 500 crore and held a 75 per cent stake, while PLL subscribed to the remaining equity at an investment of Rs 200 crore. The Hyderabad deal was the first such investment from Lehman.

Read more in The Business Standard 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.

Lehman picks 26% in Edelweiss` NBFC

The New York-headquartered Lehman Brothers has picked up 26 per cent stake in ECL Finance, the non-banking finance company of Edelweiss Capital, for close to Rs 180 crore.The acquisition comes within days after Lehman Brothers bought the institutional broking business of Brics Securities, a Mumbai-based broking house.

In March, the Mumbai-based financial services company Edelweiss announced its foray into the non-banking financial space and asset management by investing a total of Rs 400 crore in the new ventures.The NBFC would be looking at mortgage business and other credit instruments.

Last week, Edelweiss filed a prospectus with the capital market regulator, the Securities and Exchange Board of India (Sebi), for its initial public offering. The company will be offering 8.3 million equity shares of Rs 5 each and the post issue dilution is 10.92 per cent.A portion of the proceeds of the issue will be used to buy office space of about 30,000 sq ft either for ECL Finance or for Edelweiss Securities.

Read more in The Business Standard article.

PNB may bid for IFCI stake

"Punjab National Bank may bid for a 26 per cent holding in institutional lender IFCI Ltd.", said the bank's chairman and managing director."The bank's board will take a final call on the matter," K.C. Chakraborty said, adding the bank shared some common account holders with IFCI.

The state-run Punjab National Bank had sought to acquire a controlling stake in IFCI more than three years ago but the proposal fell through. A spokesman at the bank could not be immediately reached.

State-run IFCI is looking for a strategic investor and has appointed Ernst & Young as its advisors.Citigroup, Lehman Brothers, BNP Paribas, Deutsche Bank and Barclays were eyeing a 26 per cent in IFCI.

Lehman acquires Brics' institutional business

Lehman Brothers, the fourth largest securities firm in the US, has clinched the deal to buy institutional broking business of Mumbai-based Brics Securities.Sources said Lehman Brothers is likely to disclose the new acquisition to the regulators in the US, where it is listed, later this week .

Brics Securities was created in October 2003 after the acquisition and rechristening of Birla Sun Life Securities - a joint venture between the Aditya Birla group and the Sunlife Group of Canada.

Brics Securities, the financial services arm of J V Gokal Group, is one of the top-ranked brokerage houses in India, catering to high networth clients. Post-deal, the research team, headed by Prabhat Awasthi and his 21-member institutional team, institutional sales (8 members) and derivatives sales (12 members) will be move to Lehman Brothers.

The sources said Brics Securities, which recently hired Rahul Rege from Sharekhan to head the retail business, will expand the retail brokerage business in the coming years.

Read more in The Business Standard article.

Lehman, Warburg, Carlyle eye 20% of Angel Broking

Leading private equity investors Lehman Brothers, Warburg Pincus and Carlyle Group are in talks with Angel Broking to buy a 20% stake in the Mumbai-based retail broking firm.

Angel Broking is the latest to join the PE bandwagon after leading industry players like Motilal Oswal Securities, Edelweiss Capital and India Infoline roped in equity partners in the past. Angel is planning to raise about Rs 200 crore through the placement, pegging the broking firm’s valuation at around Rs 1,000 crore.

Investment banker Rothschild has been given the mandate to find equity partner and the deal is expected to be sewed up by September-end.A 100% retail player, Angel Broking has chalked out an expansion plan under which it has identified 250 new locations in addition to its existing branch network of 70. It offers a range of services like broking, research, investment advisory, wealth management, e-broking and commodities trading to about two lakh clients.Angel Broking records daily business volumes of Rs 1,500 crore and enjoys about 3% market share.

Read more in The Economic Times article.

Lehman seen close to buying 51% in Brics Sec

Lehman Brothers, one of the biggest global financial services providers, is in advanced stages of picking up a 51% controlling stake in local securities firm Brics Securities.

The Wall Street major will scale up its stake in the Mumbai-based brokerage firm to 100% over the next three years, if the deal goes through, according to sources close to the development. They said Lehman is picking up a stake in Brics Securities which is the financial services arm of the JV Gokal Group. It was created in October 2003, following the acquisition and rechristening of Birla Sun Life Securities — joint venture between the Aditya Birla Group and Sunlife Group of Canada.

The Mumbai-based brokerage has a retail and private client business. It offers portfolio management services, besides distributing third-party products. It also has an NBFC licence, which currently does lending against shares, albeit in a small way and a commodities broking business.

Spice Communications raises $128 mn from public issue

Spice Communications Ltd, an Indian mobile phone venture partly owned by Telekom Malaysia Bhd., raised Rs520 crore ($128 million) in an initial public offering as investors try to tap a market whose numbers almost doubled in 2006.

The Noida-based company priced the 113.1 million new shares at Rs46 apiece, the top end of a Rs41-46 range, according to an email sent to investors. The stock will trade on the Bombay Stock Exchange.

The mobile operator and larger Indian rivals, led by Bharti Airtel Ltd and Reliance Communications Ltd, are attracting investors trying to get access to the world’s fastest-growing market last year. Spice, which offers its services in the southern state of Karnataka and Punjab in the north, plans to spend $140 million during the next two years to boost coverage.

Last month, Spice sold stakes worth $10.1 million each to Lehman Brothers Holdings Inc. and Spinnaker, the company said.Enam Financial Consultants Pvt. Ltd and UBS AG arranged the Spice share sale.

Read more in The Livemint article.

Spice Comm IPO opens today

Spice Communications Ltd’s initial public offer opens on Monday. The company is offering 11.31-crore equity shares of Rs 10 each through the 100% book building route. The price band has been fixed between Rs 41 and Rs 46 per share. The issue constitutes 16.39% of the fully diluted post-issue equity share capital of the company.

The book running lead managers to the issue are Enam Financial Consultants and UBS Securities India.The issue closes Friday.At least 60% of the issue will be allocated to qualified institutional buyers, up to 30% to retail investors and up to 10% to non-institutional investors.

The IPO proceeds will be mainly utilised towards repayment of debt, payment of license fee for national long distance and international long distance services and related capital expenditures. The funds will also be used for payment to vendors for network equipments and other capital expenditures.

The company recently concluded a pre-IPO placement of 2.4 crore shares at Rs 45 per share, raising about Rs 112 crore. Lehman Brothers and Sinnaker Investments have picked up a small stake in Spice Telecom.

Read more in The Economic Times article.

Rolta India raises $150 mn in global market

Rolta India said on 22 June it has raised $150 million (Rs600 crore) through the issue of foreign currency convertible bonds (FCCBs) in international markets.
The company would issue 1,500 FCCBs of $1,00,000 each. The FCCBs are expected to be listed in Singapore, the company informed the Bombay Stock Exchange.

Conversion price for the FCCBs is Rs737.40 per share, which is at a premium of 50% over the 21 June closing of the company’s share on National Stock Exchange.The company has entered into subscription agreement with the arrangers and bookrunners, Lehman Brothers International (Europe).Shares of the company were trading at Rs474.40, down 3.54% on BSE in early morning trade.

Read more in The Livemint article.

Spice fixes IPO price band at Rs 41-46

Cellular operator Spice Communications Ltd said on 19 June it has fixed the price band of its proposed public issue between Rs41 and Rs46 an equity share of Rs10 each.
“We have recently concluded a pre-IPO placement of 24,837,889 shares at Rs45 per share, thereby raising about Rs112 crore. A clutch of investors led by Lehman Brothers and Sinnaker Investments have picked up a small stake in Spice Telecom,” company chairman and managing director Dilip Modi told reporters at a press conference.

Following the IPO, the stakes of the both the promoters, B K Modi and Telekom Malaysia, would come down by 10% each.At present, B K Modi holds 51% and Telekom Malaysia, the remaining 49%.Post-IPO, Modi will hold 41% while Telekom Malaysia, 39%, with the public holding the remaining 20%.

Read more in The Livemint article.

Inst investors lap up DLF offering within an hour

Property developer DLF Ltd. said the institutional portion of its $2.4 billion initial public offering, the country's biggest, had been fully subscribed within an hour of its opening on Monday.

Banking sources told media the offer had received bids to cover about 40 per cent of the issue within 45 minutes of the offer opening.

The offering of 175 million shares at an indicated price band of 500-550 rupees ($12.20-$13.40) each has an institutional allotment of 104.4 million shares.The offer runs until Thursday.

DLF is selling 10.27 per cent of its enlarged capital. If the sale is priced at the upper end of an indicative range, the firm would be valued at around $23 billion, ahead of State Bank of India and ICICI Bank and rival Unitech Ltd., which is worth around $11 billion.

The IPO was shelved in May last year after the stock market dropped sharply and amid disputes with minority shareholders. At the time, New Delhi-based DLF hoped to raise over $3 billion.

The IPO is lead managed by Kotak Mahindra and DSP Merrill Lynch. Other managers are UBS, Citigroup, Lehman Brothers, Deutsche Bank, ICICI Securities, and SBI Capital Markets.

Foreign funds to invest Rs 42cr in Opto Circuits

Foreign funds Lehman Brothers and Alliance Bernstein will invest Rs 41.92 crore for allotment of around 12 lakh shares in Opto Circuits on preferential basis.

An Extra Ordinary General Meeting (EGM) of the shareholders of the company would be held on June 29, to consider the issue of equity on preferential basis to investors, Opto Circuits said in a communique to the Bombay Stock Exchange.

Opto Circuits said it would allot upto 12 lakh shares on a preferential basis to certain investors including -- Lehman Brothers Asia Limited Sub Account- Lehman Brothers India Holdings Cayman II, Alliance Bernstein Hong Kong, subject to shareholders approval.

Read more in The DNA Money article.

Global PE funds set to hit the road with $1.5 b kitty

Global private equity funds are set to drive on Indian roads. At least half a dozen PE firms, including Goldman Sachs, Lehman Brothers, Citigroup and few Gulf-based funds are keen on making a foray into the domestic road sector. Experts say funds worth $1-1.5 billion may be invested in the next 6-8 months. This would be the first time PE investments of such magnitude would flow into the sector.

Goldman Sachs recently picked up 5% stake in IL&FS Transportation Networks Limited (ITNL) for a consideration of $20 million. ITNL is a vehicle promoted by IL&FS to spearhead its initiative in the roads sector.Industry experts say PE firms are in talks for investing in public-private partnerships (PPP) projects in which revenue stream has been fixed and identified.

Construction companies are in discussion with PE funds for jointly investing in road projects through the SPV route. Investment bankers say deals in southern and western parts of India are being discussed and some of these are in the range of $50-80 million. Several Gulf-based funds which have global expertise in managing road projects are also learnt to be interested in picking equity in Indian road projects.

Read more in The Economic Times article.

PE investors to buy 24% in NDTV Networks

A clutch of private equity (PE) investors, which include Lehman Brothers, Goldman Sachs, CSFB and eight others, would acquire nearly 24 per cent stake in NDTV Networks, a fully owned subsidiary of NDTV India, for $120 million. The valuation of the new company would, thus, be over Rs 2,200 crore.

The UK-based NDTV Networks has five companies in its fold. It holds 100 per cent in NDTV Labs, which will develop the market and sell software and technology products; NDTV Imagine, which will operate a non-news Hindi mass entertainment channel; NDTV Lifestyle, which will provide content to TV channels in India and abroad; and NDTV Convergence, which houses all dotcom and mobile properties of the group. NDTV Network also owns 50 per cent in NDTV Media services with Genpact for media process outsourcing.

NDTV India controls news channels, NDTV 24x7, NDTV Profit, among others.

The group flagship has a market capitalisation of Rs 1,992 crore compared with Rs 3,609 crore of rival TV18.

The broadcaster is also believed to have scrapped its initial public offer for the moment and may reconsider it later.

HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times article