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News of Essar Group
News of Essar Group
News of Essar Group
The telecom firm which operates under the yuMobile brandsays that the hiring of French banking firm BNP Paribas was to help the firm evaluate possible avenues of raising capital and not to shed its shares as was reported Wednesday by a section of the Indian media. Essar Telecom Kenya has denied reports that its mother company and largest shareholder Indias Essar Group is looking to sell off the business. Share This Story The telecom firm which operates under the yuMobile brandsays that the hiring of French banking firm BNP Paribas was to help the firm evaluate possible avenues of raising capital and not to shed its shares as was reported Wednesday by a section of the Indian media. Madhur Taneja, the Essar Telecom country manager, said that the deal was only for the purposes of raising funds needed to increase investments in the Kenyan business, which he added stand at Sh40 billion to date. To meet these future investment needs, we are evaluating an opportunity to raise capital and BNP Paribas has been appointed for the purpose, said Mr Taneja. Raising capital would not relate to selling the business, he added. Reports appearing in Indias Financial Chronicle claimed that the Essar Group had engaged the French firm with the intention of enchasing its majority stake in yuMobile. We have appointed BNP Paribas for the sale of our controlling stake of about 72 per cent in yuMobile. We expect the valuation for the same to be several hundred million dollars, theChronicle reported, attributing this information to a top Essar official familiar with the plans. Essar entered the Kenyan market three years ago by buying out stakes held by local shareholders such as Capital Africa and CrossLink. The balance of about 20 per cent is held by local shareholder Startnet, a company associated with businessmen Peter Kibiriti and Jos Konzolo, a former National Social Security Fund managing Trustee. Communication Commission of Kenya (CCK) has said that it had not received any report from the telecom firm notifying it of any planned sale of shares.
I have read the reports about the alleged sale plans but as of today (Wednesday), yuMobile has not formally contacted us on the matter as is required when ownership changes, said Francis Wangusi, the acting director general of CCK. Both BNP Paribas and the Essar head office in India did not respond to our queries by the time of going to press. For yuMobile, this is not the first time that it has had to deal with claims of a planned exit by its parent company. Mid last year, similar reports indicated that Essar was looking for a buyer to pay approximately Sh25.5 billion ($300 million), about double what it paid in 2008, for its controlling stake. The latest exit reports come two months after Essar Telecom requested its local shareholders and its parent company for a Sh10.5 billion capital injection.
CAG report on coal block allocation in Par in this session The CAG reports on allocation of coal blocks without bidding and the Delhi airport concession given to GMR will be tabled during the current monsoon session of Parliament, finance minister P Chidambaram said today. The CAG reports on allocation of coal blocks without bidding and the Delhi airport concession given to GMR will be tabled during the current monsoon session of Parliament, finance minister P Chidambaram said today.
The leaked draft CAG reports had rocked Parliament during the previous Budget session and were used by Team Anna to attack the government. "The CAG reports were received in the Ministry of Finance on May 11... (May) 12th and 13th were Saturday (Sunday), so it was put up to the finance minister on May 14 and we approved sending of the reports to the President," Chidambaram told reporters here.
The CAG report on allocation of coal blocks between 2004 and 2009 without auction has reportedly pegged the value of "undue benefits" that the government extended to private firms at more than Rs 1.8 lakh crore.
According to CAG, major beneficiaries included Tata Group entities, Jindal Steel & Power, Anil Agarwal Group firms, Essar Group's power ventures, Adani Group, Arcelor Mittal and
Lanco. The CAG report on public-private partnership for the Indira Gandhi International Airport had reportedly said that Delhi International Airport (DIAL), which runs the utility, has a potential to earn Rs 1,63,557 crore over a 60-year period from the land given to it on a lease rent of Rs 100 per annum, hurting the interest of the government.
"The reports were sent on May 16, it was received back from the office of the President on May 26 at 2:30 pm, by that time the House was in the process of being adjourned, therefore it was not laid on the table of the House at the end of the last session," Chidambaram said. On being asked whether these reports will be tabled in this session, he said "Yes".
"This morning we have issued notice to both Lok Sabha and Rajya Sabha requesting the Speaker and the Chairman to fix a date to lay the reports on the table of both the houses simultaneously, once they give us a date we will lay all the three reports. There is no delay at all," he added. Essar & Loop promoters allowed to go abroad from Aug 2 to 26 NEW DELHI: The promoters of Essar Group and Loop Telecom, facing trial in a case arising out of the probe into the 2G spectrum allocation scam, were today allowed by a Delhi court to visit abroad from tomorrow till August 26. Special CBI Judge O P Saini allowed the pleas of Essar group promoters Ravi Ruia and Anshuman Ruiaand Loop Telecom promoters I P Khaitan and Kiran Khaitan after their counsel said their case is listed for hearing on August 27 and they would come back to attend the proceedings on that day. Besides them, the court also allowed a similar plea of co-accused Vikash Saraf, Essar Group Director (Strategy and Planning). "All five applications are allowed," the judge said after the CBI prosecutor did not object to their pleas. CBI prosecutor A K Singh submitted that he does not have any objection to their pleas for travelling abroad from August 2 to August 26, but they must be present in the court on August 27. Appearing for Ruias, senior advocate S V Raju said they would go to the USA, Canada and other places, but would return by August 26. Besides Ruias, Khaitans and Saraf, three telecom firms -- Loop Telecom Pvt Ltd, Loop Mobile India Ltd andEssar Teleholdings Ltd -- have also been arrayed as an accused in the case of alleged conspiracy to cheat the government. Essar takes ONGC to court for keeping it out of $2-billion tenders
MUMBAI: Mumbai-based metal-to-shipping conglomerate Essar Group has approached the Bombay High Court against state-run energy explorer Oil and Natural Gas Corporation's (ONGC's) decision to keep the business house out of its offshore oil services tenders worth $2 billion. ONGC blames Essar of violating its contract and diverting a rig to foreign firm to make more money. Essar sources say there was a little delay in providing the rig but ONGC got another rig within a month, and this did not warrant the harsh step taken by ONGC against other group companies that have a long track record of doing business with ONGC. Essar sources say the group was not given a chance to explain its position before ONGC took the decision. Both companies declined formal comment as the matter is in court. "Yes, I'm aware that we have discontinued our working relationship with Essar as of now as last year they conducted a clear breach of contract by not providing us with a rig for operational work in one of our blocks in the KG basin after the tendering process had been duly completed and it was mandatory for them to supply the rig," a senior ONGC executive told ET. "The matter is serious as we have also learnt that Essar did not supply the rig to us as they preferred to supply it to another foreign company as the terms there were more lucrative," he added. According to the petition filed by Essar Offshore Subsea Ltd (EOSL) Essar Shipping and Essar Projects, ONGC decided in April 2012 to stop any further business with Essar Oil Service India Ltd (EOSIL). ONGC also decided not to work with Essar Shipping and Essar Projects for two years starting September 2011. However, Essar says that there was no show-cause notice issued to the companies affected nor did they get any opportunity of being heard. EOSL came to know about the order on April 2012 through communication with EOSIL. In its plea, Essar states that the order to bar its other entities from bidding for ONGC contracts is a violation of its fundamental rights to do business. The plea states that ONGC is one of the largest purchasers of services and products pertaining to offshore and marine activities in India and worldwide. If the firm does not stand entitled to bid for tenders issued by the PSU for a period of two years, it will result in a situation in which they will be effectively prevented from doing business in India and worldwide. The petition, which has been reviewed by ET, also states that Essar Projects and Essar Shipping were barred from participating in two tenders amounting to $1 billion each, which caused major financial losses to the firms. There are around five tenders from July 2012 to August 2012 worth $1.2 billion where too the petitioners were disentitled from participating. Senior Counsel Mukul Rohtagi and Senior Counsel Janak Dwarkadas along with Mumbai based corporate law firm Dhruve Liladhar & Co are representing Essar Group while ONGC is being represented by MDP Partners.
Natural resources can't be exclusive domain of government: Shashi Ruia, Essar Group KOLKATA: Noting that recent controversies overnatural resources have put stakeholders at risk, Essar group today said such wealth cannot be the exclusive domain of the government if it wanted industry with the private sector. Essar Group Chairman Shashi Ruia also said it has become more and more complex to manage businesses, "especially if you take the position that you don't know what's going to happen". "Natural resources could not be the sole domain of the government if it wanted industry with the private sector," he said. Speaking at the annual general meeting of industry body ICC, he said controversies have brought all resources under question creating uncertainty and putting stakeholders at risk which were not anticipated. He, however, did not elaborate on whether he desired that mining of coal should be opened up for the private sector. "Essar's coal mining projects are affected after the CAG note," Ruia said. "Mining equipments worth Rs 450 crore are lying idle and we are not able to move ahead." It was reported that the Comptroller and Auditor General (CAG) had estimated losses of crores of rupee to the exchequer on allotment of coal blocks during 2004 to 2009 without auction to 100 private and public sector companies. However, CAG Vinod Rai had later said the media reports quoting the loss of Rs 10.76 lakh crore did "not even constitute our pre-final draft and are exceedingly misleading". Besides, the Supreme Court had also ordered cancellation of 122 2G spectrum licences allotted in 2008 by the then Telecom Minister A Raja, saying they were issued in a "totally arbitrary and unconstitutional" manner. Ruia also raised questions about corporate holding in insurance companies, saying though foreign holding was just 26 per cent, but "corporate structure is such that almost all insurance companies in India are directly and indirectly owned by foreign companies". Essar was planning for 10,000 MW of power plants in the country
Fitch revises Essar Projects' long term rating to negative MUMBAI: Fitch ratings has affirmed Essar ProjectsLtd's long-term and short-term Foreign Currency Issuer Default Ratings (IDRs) at 'B'. The Outlook on the long-term rating has been revised to Negative from Stable. The rating company has also withdrawn the 'B' rating on EPL's $100m working capital loans as there is no amount outstanding against the instrument. EPL is the holding company of the various construction companies of the Essar Group. "The Negative Outlook reflects Essar Global Ltd's (EG, a 100% stake in EPL) high financial leverage in FY12 (year end March) and its likely slower-than-expected deleveraging," said the rating company. EPL's ratings are constrained by EG's credit profile as group entities are key clients for EPL and EG has full access to EPL's cash flows. Fitch notes that as a large part of EG's capex - namely the 10mtpa oil refinery expansion and the 5mtpa steel expansion - is complete, the group level EBITDA will increase in FY13 and consequently lead to deleveraging. However, given the adverse industry scenario in some of the businesses, deleveraging could be lesser than expectations. The rating affirmation reflects EPL's robust order book of $6.3bn (2.9x FY12 revenues) and its comfortable credit metrics. In FY12, revenue grew by 23% yoy to $2.1bn and EBITDA margin was 7.9% (FY11: 9.5%). Fitch notes that though credits metrics weakened in FY12 with net financial leverage of 3.5x (FY11: 1.5x) and interest cover of 2.5x (3.7x), they are commensurate with the current rating level. The ratings continue to be constrained by the inherent business risk in construction companies wherein cash flows are project driven and can vary significantly. In case of offtake risks, many companies tend to stall their capex plans, which could negatively affect a construction company's working capital requirements and cash flow position. Fitch also notes that the company's exposure to the Essar group remains high. The trend of a reduction in group entity projects in the order book was reversed in FY12, with group orders accounting for 77% (FYE11: 69%). A negative rating action could be initiated on - a worsening of EG's credit profile and a
deterioration in EPL's credit metrics with financial leverage above 5x and interest coverage below 1.2x on a sustained basis.
Mumbai: Essar Group's BPO arm AGC Networks Thursday reported a seven-fold (680 percent) jump in net profit at Rs 18 crore for the first quarter ended June 30 against Rs 2.3 crore a year ago, on the back of a robust revenue flow from its overseas business. Sales during the reported period grew by 25 percent at Rs 246 crore against Rs 196 crore in the year-ago period. "We have seen impressive growth in the year and will keep the momentum going through our well defined growth strategy," AGC Networks Managing Director and Chief Executive S K Jha told reporters while announcing the quarterly numbers. The firm is all set to expand its global footprints to the European market (Britain primarily), he said, adding "as we progress and see customer engagements, we would be enhancing our presence subsequently in the other markets as well." Revenue from the overseas business grew significantly to 42 percent in the June quarter as against 16 percent in the year-ago period. "We have seen improvement across all parameters of growth. Now the focus is to grow business out of the country also. We are going in the markets where we are seeing opportunities. So this pie is also changing," the company's Global Chief Financial Officer, C M Sharma, said. "We are improving our margins while maintaining our product mix," he said, adding the revenue mix between solutions and services currently stood at 70:30.
provisionally approved forest clearance for its Mahan coal block. Operations at the 380 MW Vadinar P1 gas fired power station have commended, taking the company's total power capacity to 2,800 MW, the statement said adding 1,580 MW installed capacity has been added since 2011. "However, regulatory issues continued to cause delays, notably with regard to Government clearances to begin mining operations at the coal blocks previously allocated to Essar Energy's Mahan and Tori power projects," it said. "So far, some improvements have been seen, including reports that our own Mahan coal block received provisional stage 1 forest clearance last month from the Group of Ministers on coal," the statement said adding the decision has not been conveyed to the company as it has to get a final clearance from the Cabinet. Essar Energy, 77 percent-owned by Mumbai-based conglomerate Essar Group, said it has processes in place to purchase coal from other sources, both international and domestic, in the short to medium terms until these issues are resolved. "Longer term, the logic of investing in the Indian energy sector remains, given ongoing large deficits of generation relative to demand," it said. The company will continue its dialogue with state and central governments to ensure the approval process does not lose momentum, the statement added. Essar said it has also commissioned the phase 1 expansion of its flagship Vadinar refinery in Gujarat enhancing capacity to 375,000 barrels a day, from 300,000 previously. This has come together with a sharp uplift in complexity from 6.1 to 11.8, giving the capability to produce high value fuels from some of the world's toughest, heaviest crude oils with a corresponding increase in margins. "A further optimisation project, taking capacity to 405,000 bpd, was commissioned in June 2012, four months ahead of schedule," it said. "Essar Energy is now well positioned to take advantage of rising demand for high value refined fuels in India and internationally". PTI
Earlier this year the Supreme Court had upheld Gujarat government's appeal against Essar Oil's tax benefit claims. Subsequently, tax authorities of Gujarat Government had issued a demand notice to EOL for repayment of sales tax deferment benefits utilised by the company. The state government had put the company's tax dues at Rs 8255.47 crore, which included interest and penalty.
During the reporting quarter, the profit before tax grew to Rs 69.7 crore from Rs 17.8 crore a year ago on the back of a jump in total income and Ebitda margin, which moved up to 82 percent from 75 percent last year. The company handled around 45 million tonne cargo during the fiscal, utilising around 50 percent of its 88 million tonne capacity, Sawa said, adding it is currently in the process of nearly doubling the capacity it up to 158 million tonne per annum by March 2015. Third-party cargo accounted for only 5 percent of the cargo handled during the fiscal and the company targets to grow it up to 25 percent by FY15, he said, adding by FY15, it targets to increase the utilisation to 75 percent. Right now, the company is full with new projects and will not be bidding for any new projects apart from the Chennai port project for which it has already announced its plans to participate, Agarwal said.
"While accepting the resignation, the Board placed on record its appreciation for the invaluable contribution made by Shashi Ruia in the growth of the company," the filing said. Shares of Essar Ports were trading at Rs 89.55, down 0.57 percent on the BSE. PTI
Lalit said that from September 2, 2004 to June 2, 2005, two employees of Essar Group were the directors of STPL. He said in July 15, 2005, 7.2 percent equity of Nambiar in BPL Communications was purchased by STPL for which Rs 124.99 crore was paid by ETHL. Lalit said that BPL Cellular and BPL Mobile sold their stake to Hutch and the entire amount of Rs 2,737 crore was paid to ETHL directly by Hutch. He said on September 3, 2007, applications for UASL was filed for 21 circle by Shipping Stop Dot Com (India) Pvt Ltd. After the filing of applications, Shipping Stop Dot Com became Loop Telecom Pvt Ltd on September 21, 2007. Lalit said that after the issuance of letter of intents (LoIs) to Loop Telecom for 21 circles by the DoT on January 10, 2008, licence fees was paid by the firm which was allegedly sourced from Essar Group. Detailing the source of funds, he said that Rs 700 crore had come from the Essar Group while State Bank of India (SBI) had given a loan of Rs 725 crore under the impression that Loop was a Essar Group company. Besides these, Rs 175 crore had come from ETHL Global Capital Ltd and huge amount of loans were taken from banks in which the bank guarantee was given by Essar Global Ltd. Lalit told the court that the entire funding for STPL had come from Essar Group companies and not "even a single penny" had come from STPL. "Behind the scene, the real beneficial owner behind all this is ETHL," he said. "Though money has come from Essar Group, the controlling block is shown to be STPL...It is nothing but ETHL or the companies under the same umbrella which is controlling STPL," Lalit said. Detailing the roles of the accused, Lalit said, "Saraf, in conspiracy with Ravi Ruia and Anshuman Ruia and other persons, applied for licences and they fraudulently did it. They made false representation to conceal the actual hold of Essar on it (Shipping Stop Dot Com which later became Loop Telecom Pvt Ltd)".
"In addition to cutting costs, Windows Azure has given Essar the flexibility to scale compute and storage resources up and down as needed," Prabhu said, adding: "In fact, we can maintain the high level of scalability needed at a lower total cost of ownership compared with an on-premises solution." Essar is a leader in various business sectors, including steel, energy, power, communications, shipping ports, logistics and construction, and with operations in more than 25 countries across five continents and revenues at $17 billion.