SBI to fund Tatas' bid for Singapore co

India’s largest bank, State Bank of India (SBI), will offer Tata Power $1 billion to help it acquire Senoko Power, Singapore’s largest-power utility.In the past, SBI had extended a $1.2 billion loan for the Corus acquisition and about $500 million for financing the buy out of Jaguar and Land Rover( SBI, others to raise $3 bn for Tata Motors
). For the Senoko bid, SBI Capital Market has been appointed as the lead arranger for funds. SBI has agreed to provide a loan for 18-24 months. The loan is pegged 350 basis points over Libor.

Temasek Holdings had put Senoko Power on the block in early August, in a deal which is expected to raise close to $3 billion. Temasek is expected to shortlist bidders in the first week of September after which those shortlisted will be allowed to carry out a due-diligence exercise. The entire sale is expected to be concluded by the end of 2009.

TPC in race for Singapore power co

Investment arm of Government of Singapore,Temasek Holdings has shortlisted Tata Power (TPC) to bid for the city state’s power generating company, Senoko Power.The successful bidder may need to fork out $3 billion to bag Senoko.Tata Power will have to compete with global giants like Japan’s Marubeni and Mitsubishi, France’s GDF Suez, Malaysia’s YTL Power and the OneEnergy-CLP Holdings combine

The sale of Senoko will involve a two-stage process with interested companies initially submitting a non-binding expression of interest. Later, the shortlisted companies will be allowed to conduct due diligence before making their binding offers.

In the last financial year, Senoko Power generated revenues of $2.5 billion and an operating profit of $245 million. Credit Suisse and Morgan Stanley are advising Temasek on the sale of all the three power generating companies.

Read more in The Economic Times artcile.

Chinese firm pips REL, GMR to buy Tuas Power for $3 bn

China’s largest power generator China Huaneng has outbid India’s Reliance Energy (REL) and GMR Group by placing the highest bid of $3.1 billion for a power firm put on block by Singapore’s investment arm Temasek Holdings.REL and GMR Group were the two Indian bidders for Tuas Power, one of the three power generating companies being privatised by the Singapore government.

Besides, REL and GMR, three international firms, including China Light and Power and HongKong Electric, were also believed to have been in the race to acquire Tuas Power.

Temasek Holdings has signed a share purchase agreement with SinoSing Power Pte Ltd, a wholly-owned subsidiary of China Huaneng, for the 100 per cent sale of Temasek’s wholly-owned Tuas Power Ltd for a cash consideration of 4.235 billion Singapore dollars, an official statement said.

Read more in The Business Standard article.

REL, GMR in race for Singapore co

Singapore's state investor Temasek has chosen nine firms including Marubeni and HongKong Electric as bidders for Tuas Power, which could raise $2 billion as part of the city-state's energy liberalisation. The sale of Tuas will be the first of three power generators that Temasek Holdings hopes to sell by June 2009, which analysts say will offer potential investors a low-risk route to steady profits.

Sources close to the deal named six bidders: Japan's Marubeni, Li Ka-shing's Hongkong Electric, India's Reliance Energy, a joint venture of Macquarie, and India's GMR Infrastructure, Malaysia's Tanjong and Huaneng Power.

A third banking source advising one of the bidders said that there could be nine shortlisted firms in total, including the One Energy JV owned by Hong Kong's CLP Holdings and Japan's Mitsubishi, Bahrain-based investment bank Arcapita and Spain's Union Fenosa.

Read more in The Times of India article.

3 Indian cos bid for Singapore power giant

Three domestic power companies — Reliance Energy, Tata Power and GMR Infrastructure — have submitted indicative bids to acquire Singapore-government owned Tuas Power.

While Tata Power and Reliance Energy have decided to bid on their own, Bangalore-based GMR Infrastructure has formed a consortium with Macquarie Bank and Kuwait Fund for the purpose.The price tag for the foreign asset could be at around $2 billion (Rs 8,000 crore).The domestic power majors submitted their bids today, which was the last date of submission of indicative bids.

Industry sources said other interested parties include Hong Kong's China Light & Power, Hongkong Electric, Japan's Marubeni, Singapore's SembCorp Industries, Tokyo Electric Power Co, Australia's Babcock & Brown, General Electric and International Power Plc of the UK.

Read more in The Business Standard article.

Sabre Cap, Temasek eye DBS Chola

Rana Talwar’s Sabre Capital, backed by private equity giant Temasek, is in talks with Cholamandalam DBS Finance (CDFL) to take over the latter’s mutual fund company — DBS Cholamandalam Asset Management. The deal, advised by Kotak Mahindra, is likely to be around Rs 400 crore, said sources. A few other strategic investors are also believed to be in the fray.

The fund’s assets under management (AUM) had dropped from over Rs 5,000 crore in July 2007 to around Rs 3,829 crore in September. Sources said both partners — DBS and the Murugappa group — were not happy with their MF business, which has slipped in rankings over the past few months.

Sabre, along with Temasek, currently owns Lotus India Asset Management. Temasek-owned Alexandra Fund holds 42.8% in Lotus while Sabre holds 32.2%. The balance is held by employees and domestic shareholders.

Sources said if Sabre and Temasek succeed in the acquisition, they will merge the AMC with Lotus. As per the figures available for September 2007, Lotus has built up an AUM of Rs 6,385 crore. DBS Chola, meanwhile, has an AUM of only Rs 3,829 crore.

Read more in The Economic Times article.

'Temasek wants Nasdaq's 30% stake in LSE'

Singapore’s state-owned Temasek Holdings has approached Nasdaq to buy its 30% stake in the London Stock Exchange (LSE), a newspaper reported on Sunday. The Sunday Times said in an unsourced report that Temasek had made the approach in recent days and the deal could lead to a full takeover of LSE by the Singaporean investor.

On August 20, Nasdaq Stock Market said it may sell its stake in LSE, worth £800 million ($1.6 billion), to bolster its chances of buying Nordic exchange operator OMX and it was already in touch with interested parties. The US exchange company said later in the day in a statement that it will not sell its LSE stake to a single buyer. The reported interest by Temasek, which owns stakes in UK banks Barclays and Standard Chartered, comes amid growing protectionism in Europe and the US towards sovereign wealth funds making aggressive overseas investments in search of higher returns.

The newspaper said several parties, including the New York Stock Exchange and the Chicago Mercantile Exchange, may enter the fray as well as investment and infrastructure funds, while another newspaper report said that Nasdaq was seeking to sell up to half of its LSE stake to Deutsche Boerse.Nasdaq, eager to expand its presence in overseas markets, is locked in a $4 billion bidding war with Borse Dubai for OMX, which owns exchanges in Sweden, Denmark, Finland, Iceland and the Baltic states.

SingTel/Bharti can buy Temasek's Airtel stake

Singapore Telecom (SingTel) and Bharti Enterprises, the top two shareholders of Bharti Airtel, will have the first right to buy the stake acquired by Singapore government's investment arm Temasek in the mobile company.

Temasek has been granted an option to indirectly acquire 4.99% in Bharti Airtel.SingTel, which owns 30% in Bharti Airtel, today said it along with Bharti Enterprises have the first right of refusal to the shares bought by Temasek in the mobile firm.

"Should Temasek decide to exercise its option to purchase the shares from Bharti and should Temasek decide to sell these shares thereafter, Bharti and Singtel have the first rights," a SingTel spokesperson told PTI.

A Bharti spokesperson said Temasek, after it exercises the option to acquire the stake in Bharti Airtel, will be bound under the agreement that at the time of exit it has to sell these shares to either one or both Bharti and SingTel. It cannnot sell the stake to any third party.

Read more in The Business Standard article.

Bharti says offers 5 pct equity to Temasek

The Bharti group said late on Tuesday that it had offered 5 percent equity in Bharti Airtel to Singapore's Temasek Holdings.

The group's Bharti Enterprises will hold a controlling 45 percent stake in Bharti Airtel, India's top mobile services firm, it said in a statement.

It said a subsidiary of Temasek would have the option to acquire a stake of up to 4.99 percent in Bharti Airtel.

Global PE players eye stake in JetLite

Naresh Goyal-promoted Jet Airways is believed to be in preliminary talks with leading international private equity players for offloading a minority stake in JetLite, the name given to Air Sahara that it acquired three months ago for Rs 1,450 crore.

Global investment companies and equity funds like Dubai-based Istithmar PSJC, US private equity firms Texas Pacific Group and Blackstone and Singapore’s investment holding company Temasek Holdings have been approached by merchant bankers associated with the talks.

Sources close to the development said Jet Airways, which is readying itself for a $400 million rights issue to fund its expansion plans, may dilute up to 25 per cent in JetLite. Jet Airways Executive Director Saroj Datta, however, denied that talks were on for divesting equity.Jet Airways has been looking for capital to finance its international operations and aircraft acquisition.

Read more in The Business Standard article.

Singapore’s Temasek, GIC set to raise stakes in ICICI Bank

Temasek Holdings and the Government of Singapore Investment Corp. (GIC), two investment arms of Singapore, have made aggressive bids for the ICICI Bank Ltd’s public issue that was subscribed 5.18 times on the third day.

The per-share pricing of the issue is expected on Friday after it closes.
Temasek, through its investment arm, Allamanda Investments, already has a 7.34% stake in the bank, while GIC has a 2.24% stake.Temasek and GIC’s combined stake will go well beyond 10% after the issue.

Under the Indian banking law, no single entity is allowed to hold more than 10% stake in a bank. Until recently, the Indian central bank was treating Temasek and GIC as one entity as both of them are Singapore government’s arms and did not allow them to hold more than 10% in the bank, jointly.

For the domestic part of ICICI Bank’s issue, the qualified institutional buyers subscribed 10.38 times on Thursday, but the retail portion was subscribed only 10.27%.Retail investors trickled in on the third day of the issue, putting in bids for 3.37 crore shares against 32.8 crore reserved for them.

Read more in The Livemint article.

Temasek, Singapore GIC eye 40% of ICICI Bank public issue

Temasek and Government of Singapore Investment Corporation (GIC) are looking at cornering a little less than 40% of the fresh public issue of ICICI Bank. This would involve an investment of around Rs 8,000 crore. Temasek has already put in an application of Rs 8,300 crore — the maximum possible — on Tuesday when the issue opened for subscription.

Though retail investors are yet to step in, the issue was oversubscribed 2.7 times on the first day, thanks to demand from institutional investors.

The Singapore government arms may face some competition from government-owned institutions in the Middle East. State-owned entities from Dubai, Abu Dhabi, Kuwait and Qatar are also said to looking at subscribing to the issue.

The RBI has allowed the two Singapore government arms to pick up 10% stake each in the country’s largest private sector bank. Incidentally, four Middle East government-led institutions are also said to be looking at subscribing to a significant portion in the $5-billion issue, half of which would be raised from the local market.

Other overseas institutional investors who may subscribe include Capital International, T Rowe Price, Legatum Capital and Aberdeen. Temasek and GIC together hold 9.61% stake in ICICI Bank — Temasek through Allamanda Investments has a 7.37% stake while GIC owns 2.24% equity.

Read more in The Economic Times article.

Tatas offload 10% in Tata Sky to Temasek

The Tata Group has divested 10% stake in its direct-to-home (DTH) venture Tata Sky to the Singapore government's investment arm Temasek for $56 million.

A source close to the development told PTI that the deal was inked almost a month back. Temasek is likely to make a formal announcement in this regard soon. "Temasek has the option to increase its stake further to the permissible limit of 26%," the source said.

With this move, Tatas' stake in the company has come down to 70%.

Incorporated in 2004, Tata Sky started off as a 80:20 joint venture between the Tata Group and television network Star. The DTH service was launched last year.

The joint venture partners had earlier stated that the project cost for the venture would be around Rs 3,000 crore.

Read more in

The Business Standard article.

9 giants in race for RCoM's tower biz

As many as nine investors are currently in talks with Reliance Communications (RCOM), the country’s second-largest wireless service provider, for picking up a minority stake in its telecom infrastructure business. RCOM is currently in the process of spinning off its telecom infrastructure into a separate company — Reliance Telecom Infrastructure Limited (RTIL).

According to RCOM sources, the companies that are currently engaged in carrying out due diligence of RTIL include global tower infrastructure majors— Tower Vision and American Towers, private equity investors—Apax Partners; Carlyle; and Temasek, the private equity arms of HSBC and Deustche Bank, and financial investors—George Soros, Blueridge and US-based Tiger.

The company is looking to divest up to 26% stake in RTIL to strategic investors and has been in negotiations with many investors over the last 2-3 months. Sources in the industry say the deal could be in the range of $1 billion for a minority 26% stake in the telecom major’s tower business, pegging the valuation of the tower company at $4 billion.

Read more in The Economic Times article.

ICICI Holdings plans $500 mn stake sale

ICICI Holdings, ICICI Bank’s subsidiary which owns its insurance and asset management businesses, is selling 5 per cent stake to private equity investors and foreign reinsurers for $500 million.

The private equity investors likely to buy the stakes are General Atlantic, Government of Singapore Investment Corporation Private and Temasek.

Sources indicated that all investors would be allotted equal stakes in ICICI Holdings. The company has sought regulatory clearance and appointed JP Morgan as the financial advisor for selling the stake. The two Singapore-based private equity players, GIC and Temasek, have stakes in ICICI Bank.

ICICI Bank when contacted declined to comment. ICICI Bank was looking at valuing ICICI Holdings at $10 billion, the sources said.

ICICI Holdings’ 74 per cent stake in ICICI Prudential Life Insurance Company is valued at $6 billion and in ICICI Lombard General Insurance Company at $3 billion. The bank’s 51 per cent stake in ICICI Prudential Asset Management is valued at $1 billion.

The private placement is just the beginning. ICICI Holdings is planning to list its equity shares at an appropriate time to meet a part of its further capital requirements for ICICI Life and ICICI General.

Read more in The Business Standard article.

Temasek arm to pick up 21.74% in GL Hotels

Dunearn Investments (Mauritius), a wholly-owned subsidiary of Asia investment firm Temasek Holdings, is acquiring a 21.74% stake in GL Hotels for Rs 125 crore. Mumbai-based GL Hotels, promoted by the Ghais of the Kwality and Gaylord restaurant fame, now operates the boutique Intercontinental (IHG) Marine Drive in south Mumbai.

It is foraying into boutique and lifestyle hotels and is understood to be talking to a number of global hospitality majors for the same.

The board of GL Hotels recently cleared its expansion plan for the next 3-5 years involving a first phase investment of around Rs 600 crore. To fund the first phase, GL Hotels approved the issue of warrants to Dunearn Investments to raise Rs 210 crore and an additional Rs 400 crore would be raised through debt and internal accruals.

After the recent amalgamation of its banqueting business( Mayfair) with GL Hotels, IHG’s stake has reduced to around 5% from 12% in GL Hotels.

Read more in The Economic Times article.

Temasek, Singapore investment arm get nod to buy ICICI stake

The Reserve Bank of India (RBI) will allow Temasek and Government of Singapore Investment Corporation (GIC) to acquire 10% equity each in the country’s largest private sector lender ICICI Bank as a “one-off case”.

The regulator has taken a stand that this cannot be “quoted as a precedence” for the Singapore government’s investment arms and any other foreign investor to pick up stakes in other private sector banks, sources told ET. Even though the government has been in favour of allowing the Singapore entities to hold higher stakes in ICICI Bank, RBI had earlier said that Temasek and other investors associated with the Singapore government, like GIC and Monetary Authority of Singapore, were all ‘related entities’ and could together hold a maximum 10% stake.

The tussle between RBI and the Singapore government owes its origin to the Comprehensive Economic Co-operation Agreement between India and Singapore. The agreement says “...for investments into India’s capital markets, India shall regard GIC, Temasek and their investment vehicles as independent and unrelated legal entities, for the purpose of application of the Sebi legislation, including rules, regulations and guidelines governing investment limits on Foreign Institutional Investors...” Further, Annex 7 of the treaty says, “Each legal entity shall be allowed to purchase up to 10% or the prevailing threshold under these regulations, whichever is higher, of the issued capital of any company.” The Singapore investment arms were keen to participate in ICICI Bank’s issue in December ‘05. RBI had refused to make any exception for Temasek in the ownership guidelines for private banks, and had barred from further raising stake in the private bank.

Read more in The Economic Times article.

Mutual fund Lotus India sees assets grow to $2 bn

Lotus India Asset Management, a Mumbai-based mutual fund group, expects funds under management to nearly treble to $2 billion (Rs8,112 crore) in the next 10 months as it targets Indian retail investors, an executive said on Thursday.

Lotus is a joint venture between Fullerton Fund Management, a unit of Singapore’s state investor Temasek Holdings, and London-based Sabre Capital Worldwide, which was founded by former Standard Chartered chief executive Rana Talwar.The group has launched seven mutual funds, raising $700 million, since November 2006 and plans to launch 10 to 12 more funds.

Indian mutual funds had total assets of Rs3.5 trillion ($86 billion) in April, up 36% from a year earlier, according to data from the Association of Mutual Funds in India.
Bagga, who previously worked at Citibank and GE Capital in India, said growth was likely to come from retail investors, thanks to higher savings, and from the pension industry as the government opens up the sector to fund managers.

Read more in The Live Mint article.

Sivasankaran, Future Capital lap up NBFCs

Call it the rush for retail financing. After AIG, Temasek, DB Zwirn and DBS of Singapore, it is the turn of Indian retail honcho Kishore Biyani and rookie businessman Sivasankaran to pocket small NBFC companies to move them as vehicles for consumer finance.

In a recent development, Future Capital (part of the Pantaloon Group) has acquired a small NBFC, Sivagami Finance, for an undisclosed sum, while Sivasankaran has bought the stakes in another NBFC — Abhi Ambi Finance — based in Chennai. The acquisition price of both transactions are not known. However, it is learnt that Ernst & Young was seen advising in both transactions.

RBI Sources confirmed that Future Capital has made an application to buy Sivagami Finance. The acquisition per se is no big deal in monetary terms, but it does indicate the growing appetite of companies to enter the retail financing section.

Global NBFCs want to play it big in India

Top global financial firms which have acquired a foothold in the Indian non-banking finance companies’ (NBFCs) segment are now pursuing an aggressive strategy to expand their reach within the country.

Fullerton India, a subsidiary of Temasek, the Singapore government’s investment arm, is emerging as one of the most aggressive players in the financial sector. The firm is now drawing up plans to open 400 branches over the next 12 months to scale up its operations from the current base of 100 branches.

Other recent entrants in the NBFC segment include biggies such as AIG Capital while other global players — BNP Paribas and Societe Generale have also entered the business by acquiring stakes in Indian firms.

The aggressive moves by these firms come at a time when entrenched firms such as Citi Financial and StanChart’s Prime Financial have been pursuing a scorching growth strategy. Besides, the new players have to contend with local firms — Future Group and Indiabulls which have also forayed into this business during the past few years.

Read more in The Economic Times article.