News Roundup

Radico Khaitan acquires 36% in Greenfield distillery for Rs 160 Cr

India’s second largest spirits marketer, Radico Khaitan, will take 36% stake in a mega greenfield distillery project in Maharashtra. Radico will be the largest shareholder in a three-way joint venture in which leading distributor and bottler, Ashok Jain-led NV Group and Riddhi Siddhi, are the other stakeholders.

The greenfield JV, Radico NV Distilleries Maharashtra Ltd, will be located in Aurangabad with an installed annual capacity of 36 million litre across rectified spirit, extra neutral alcohol and ethanol. The project cost is estimated at Rs 160 crore and the venture, catering to both molasses and grain-based spirits, is expected to become operational in the next 12 months.

The other two partners, Ashok Jain and Riddhi Siddhi, will hold 32% stake each in the JV. This will be Radico’s second distillery after the original facility at Rampur in Uttar Pradesh. Besides primary and secondary distillations, the Aurangabad venture will also have a bottling facility for the company’s brands like 8PM Whisky, Contessa Rum, Magic Moments Vodka and Old Admiral Brandy. “We have large facilities for distillation in Uttar Pradesh. Having facilities in another state balances the geographic spread. Both the states between themselves produce 80% of sugar cane. Our large number of contract bottling facilities located in south will be able to access spirit from this plant, resulting in large savings in freight,” Lalit Khaitan, chairman and managing director, Radico Khaitan said.

Further, the new project’s proximity to sea ports will help Radico’s export thrust. The company has been placing emphasis on export markets in Africa, the Middle East and the UK.


ACC commissions 1st wind energy farm

ACC, the country's largest cement maker, has commissioned its first wind energy farm located in the district of Tirunelveli in Tamil Nadu with a total capacity of 9 MW, according to a Business Standard report. This initiative is part of the company’s efforts to adopt clean and green technologies to reduce dependence on conventional fossil fuel based energy sources.

Wind power generated here will be wheeled to ACC’s Madukkarai cement plant in Coimbatore through a suitable arrangement with the state grid. Excess power not utilised by Madukkarai plant will be offered to the grid.
Company admits that it will not have a substantial cost cuts effect on company's operations. "Energy from such projects are not cheaper. This is environment friendly which is a benefit," said the company's spokesperson.

The company has its cement plants spread at 14 locations across the country. It has kept its options open to come up with similar set ups at the viable places. We need to explore the possiblities and viability for setting up such plants, he added. However, he made clear that Tamil Nadu, being among the top states for wind power generation, has further scope for more such locations.

ACC is enhancing its production capacity to over 27 million tonne per annum in the next two years from the present over 20 million tonne.


Clutch of FIIs buy 49% stake in GHC for Rs 560 Cr

A clutch of foreign investors, including Singapore's SC Bank private equity fund, Mauritius’s Technology Infrastructure, Park Holding Finance Corporation from Virgin Islands and others, have picked up a 49% stake in Global Assets Holding Corporation (GHC), the holding company of leading network services company GTL Ltd and telecom tower player GTL Infrastructure Ltd, for Rs 560 crore, reports ET. GHC is also the holding company of two unlisted firms, India Wireless Technology Ltd, in which it holds a 30% stake, and Global InnovSource Solutions, which it wholly owns.

Following this deal, GHC will increase its investment in GTL from 28% to 62%. It will also increase its stake in GTL infrastructure. Also, with GHC offloading stake in these investors, the total foreign direct investment in GTL will increase to a little over 71% from 40.7% while in FDI in GTL Infrastructure will rise to 39.3% from 33.9%.

GHC has established itself as a leading player in the telecom infrastructure and networking services space. At present, the group has combined revenues of Rs 1,281 crore and over 5,000 employees across 25 countries. GHC has also informed the Foreign Investment Promotion Board (FIPB) that it would use the proceeds to further increase its investments in other unlisted group companies. It has also added that it will invest in its overseas subsidiaries for expanding business opportunities globally.

Industry sources said that investors had picked up stake in GHC primarily because of the impressive performance of GTL and GTL Infrastructure. GTL is amongst largest network services providers in India and offers a range of services such as network planning and design, network deployment, operations and maintenance and also infrastructure management. It has a presence in 20 countries and is associated with about 35 operators globally.

On the other hand, GTL infrastructure is India’s third largest passive telecom infrastructure provider. The company is currently embarking on a ambitious plan of rolling out more than 22,000 towers across various telecom circles in India. The unlisted India Wireless Technology is in the business of manufacturing and fabrication of steel towers for telecom networks and the power transmission industry.

GTL is also arranging funding to the tune of Rs 1,000 crore for making global acquisitions and has already kicked off talks with at least four different companies toward this. Recently, GTL had acquired Genesis Consultancy, a UK-based network services provider, for about over Rs 40 crore. Additionally, GTL Infrastructure has already rolled out 1,200 cell-sites and plans to set up another 6,700 towers by March 2008 with an investment of Rs 2,030 crore.

The potential for stand-alone tower business sector in India can be gauged from the fact that the country will need about 350,000 towers by 2010 from about 111,000 at present, as per the estimates of the Telecom Regulatory Authority of India.


PFC may be roped in for 4 medium power projects

The Power Finance Corporation (PFC), the nodal agency for handling ultra mega power projects (UMPP) of 4000 MW each, is looking for business opportunities to handle smaller power projects of around 1000 MW each, reports ET.

Whereas the company is likely to extend consultancy business to bid out two projects of 1200 MW each in Punjab, it is in talks with Rajasthan and Jharkhand governments for evolving similar arrangements for two projects of around 1000 MW each. Punjab’s present power generation capacity is around 6,000 MW against the peak demand of 9,000 MW.

When contacted, PFC chairman and MD V K Garg confirmed the development while adding that all these are at a preliminary stage. “Out of the two projects in Punjab, one does not have any land acquisition problems. Maybe, we will be the consultant for the entire bidding process. Regarding the projects in Jharkhand and Rajasthan, it’s really at an initial stage of discussion,” he said.

It’s expected that PFC will increase its revenue by doing business in non-UMPP venture. Already, Sasan and Mundra ultra mega power projects were bagged by Reliance power and Tata Power respectively. Significantly, the PFC has paid a dividend of Rs 248 crore to the government for FY 07. This includes the interim dividend of Rs 145 crore which was paid to the government earlier. The company has also paid a dividend of Rs 11.73 crore to private shareholders.