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Corporate 5
. 7,000 crore to various lendowes over ` ers, including State Bank of India, and has remained grounded since last year as it failed to pay salary to staff and bills to oil companies. We waited and waited before taking the decision to sell the shares, the counsel representing SBI told the court. We have about 26 lakh shares (of United Spirits) and we can sell it at our discretion. After waiting for months for Mallya to infuse more equity into the airline to revive it, banks have decided to sell the collateral remaining with them to recover loans of more than ` . 7,000 crore. Analysts said banks will only get less than ` . 2,000 crore even if they sell all the collateral. Banks have already sold the entire pledged stake of over 1-crore shares in Mangalore Chemicals and about 7.3-lakh shares of USL in the open market. pledged with banks, including SBI. Lawyers informed the court that United Spirits shares were sold at an average . 1,870 a share since last week; price of ` 2.85 lakh shares were sold on Tuesday at ` . 1,856 a stock. People familiar with the development said Mallya fears that SBIs sale will jeopardise the Diageo deal. Diageo has agreed to buy 26% from . 1,440 a share. minority holders at ` The UBHL management still has the option of challenging the order in the division bench, a senior lawyer involved in the case said. But, since bankers are constantly offloading the shares in the market, that exercise may not bring in the desirable result. Mangalore Chemicals closed 20% up . 39.30, while United Spirits closed at ` . 1,859.80 on BSE on 1.57% down at ` Tuesday .
maulik.vyas@timesgroup.com

HC Rejects UB Plea to Stop Banks from Selling USL Shares

Mallya fears lenders move to sell pledged shares may jeopardise the Diageo deal
MAULIK VYAS
MUMBAI

Kingfisher Pays Salary for June-July 2012

NEW DELHI Kingfisher

The Bombay High Court has dismissed United Breweries Holdings plea to direct banks to stop selling the shares of United Spirits, and Mangalore Chemicals and Fertilizers to recover the dues of the near-bankrupt Kingfisher Airlines. Justice SJ Kathawala dismissed the plea filed by UBHL, the holding company of billionaire Vijay Mallya, who owns Kingfisher Airlines. The carrier

Mallya could suffer more damage if banks keep selling the shares in United Spirits, which is being taken over by the UKs Diageo. Diageo and Mallya agreed on a deal in November last year under which Diageo agreed to buy a majority stake in USL. Mallya owns about 27% in USL, but most of it is

Airlines has paid its staff salaries for June and July 2012, a company spokesman said on Tuesday. Kingfisher, which has been stripped of its flying licence and has not flown since October, owes an estimated $2.5 billion to banks, staff, airports and oil companies. Reuters

In A Nutshell
Ex-Reebok CFO may Face Action for Hiding Info: ICAI
NEW DELHI Accounting watchdog ICAI on Tues-

Revival to Add Horsepower to Tata Motors

Six months into his job, Karl Slym is already making radical changes
LIJEE PHILIP & KETAN THAKKAR
MUMBAI

day said strict action could be taken against Reebok Indias former chief financial officer Vishnu Bhagat if he fails to respond to the show-cause notice regarding the alleged fraud at the sportswear maker. The Institute of Chartered Accountants of India had issued showcause notice to Bhagat, who sought time till March 31 to give his response. But ICAI is yet to receive any response. He had sought time till March 31. We have not got the information, ICAI president Subodh Kumar Agrawal said here. We have sent a very strong letter to Vishnu Bhagat saying if we do not get the information within a stipulated time, ex-parte decision may be taken, he added.

Cloud Products See Huge Adoption in India: Oracle

MUMBAI IT firm Oracle on Tuesday said it is

witnessing massive adoption of cloud services across industries such as IT/ITeS, telecom, banking and automobile industry in the country. Cloud computing facilitates sharing of technological resources, software and digital information. It operates on a pay-per-use model, helping companies cut costs as they do not have to invest heavily in infrastructure. Cloud services are transforming the way businesses function and people are no more just talking about cloud, they are deploying it. We are seeing massive adoption of cloud across industries in India, Oracle India managing director Sandeep Mathur said here.

NTPC Signs Loan Pacts worth ` . 1,870 cr with 3 PSBs

NEW DELHI State-run NTPC on Tuesday said it

his Monday , Cyrus Mistry succeeded Ratan Tata in yet another tradition at Tata Motors the chairmans annual employee address at the companys Lake House facility in Pune. As he stood up to face over 25,000 employees, including many watching via webcast, he had behind him the passenger car industrys worst year in a decade. Industry sales were likely to be down by about 5% in FY13 and Tata Motors is slipping towards its worst loss in a decade, according to analysts. It posted a ` . 458 crore loss in the quarter ending December, 2012 Mistry was quick to identify one part of the challenge fierce competition. Seven new global car makers came to India in the past four years and the industry saw 150 new launches. The other part of the challenge, which the Tata Group chairman didnt refer to directly , perhaps lies within the company . Tata Motors new car and truck launches since FY09 have failed to prevent market share erosion down from 14.9% to 12% in passenger vehicles and from 60.1% to 56% in trucks, according to SIAM. Nano sales are down from about 75,000 to a little over 52,000 in one

year. The Sanand plant is idling at less than 10% capacity utilisation. Its immediate new product line-up isnt exciting: this year will just see model year changes, 2014 will see some new products, but a new platform will come only in 2015, according to a person in the know. Undaunted, Mistry egged his employees on in his Lake House address. Its time to meet them (global rivals) and beat them in their backyard, he said. And the man Mistry has chosen to lead this charge is Karl Slym, Tata Motors new managing director, who took charge in mid September 2012. Six months into his job, Slym is already scything his way into the organisation, making radical changesstarting at the very top. He has pretty much disbanded the old management committee that was running the company and has replaced it with a leaner, more purposeful executive committee of just eight. Apart from Slym, commercial vehicles head Ravindra Pisharody , passengers cars head Ranjit Yadav and engineering head Tim Leverton are on this. Heads of quality , purchasing, finance and HR, Satish Borwankar, Venkatram Mamillapalle, C Ramakrishnan and Prabir Jha respectively , form the rest of the team. Yet to be identified heads of program planning and project management, and corporate strategy will also join this committee in the future. The new structure is very different from the earlier one. For example, each factory had its own quality and purchase heads. Deci-

Turnaround Mantra
Replaces old management committee with leaner, more purposeful team of just eight New quality, purchases, product planning & corporate strategy heads reporting to him Drive greater synergies between car & truck biz
Its time to meet them (global rivals) and beat them in their backyard CYRUS MISTRY
Chairman, Tata Motors speaking at cos Lake House facility

sions were dispersed and lacked consistency . Now, with just one head each for quality and sourcing, reporting directly to Slym, Tata Motors hopes to take and implement faster decisions, buy smart, leverage economies and maintain high and consistent quality , said a person aware of these decisions. The new leadership team will also aim to avoid duplicity and bring in synergies between the passenger cars and commercial vehicles businesses. In the past, the two businesses were guided by individual missions, according to Tata Motors external agency partner Rediffusion. Four of these positions, all reporting directly to the MD, did not exist earlier and have been created by Slym. Some are designed to tackle challenges the company is struggling with. For example, the planning and project management function will take charge of timelines and cost schedules for all new

launches. The company has struggled with timely launches in the past. Its SUV Safari Storme was intended to be an 18 month project, but took five years, says a person in the know. Industry watchers say the companys problems cant be easily fixed. Tata Motors products have not kept pace with the changes in the marketplace. Cosmetic changes in the organisational structures can barely have any impact, says BVR Subbu, an industry veteran who has worked for many years at

Tata Motors and Hyundai India and is now an independent consultant. Tata Motors still fares poorly on quality and its product pipeline is empty , says Deepesh Rathore, India MD for IHS Automotive, a consultancy . It will take at least two to three years for Tata Motors to launch new products and how Karl is able to induce customer demand in that time frame is going to be a challenge. This is a problem, especially since the company is yet to identify the new product planning head who will sit on the new executive committee. In the interim, Girish Wagh, formerly VP-operations passenger vehicles has been moved into the program planning function (only for cars). He will handle the new X0 premium hatchback program which will roll out in 2015. In trucks, Tata Motors is now rolling out six heavy trucks and an intelligent vehicle and driver management solution Tata FleetMan Telematics Services. The Ultra range of LCVs will also be introduced during the calendar year. Tata Motors claims some of these steps are already delivering

results. With Satish Borwankar bringing a sharp focus on quality, the company has found the confidence to introduce a 4-year warranty on tractor trailers, multiaxle trucks& tippers of 25 tonnes GVW & above, covering the vehicles driveline (engine, gear box & rear axle). Earlier, the warranty was for only for 2 years. Similarly , if Tata Motors is now able to offer 60% buyback value for its Manza Club Class after three years, it is because of the benefits flowing in from these changes, according to the companys external agency partner Rediffusion. Analysts believe Slym took some tough calls towards the end of FY13, including aligning production to demand, putting workers on the bench, diluting inventory levels at both company and dealer yards. Sources say he is keen to absorb the negative financial impact of such measures in the FY13 balance sheet in order to start the new financial year on a clean slate. As a consequence, some analysts believe the company will report higher losses in the quarter ending March 2013. (Inputs from Keyur Dhandeo)

. 1,870 has signed loan agreements worth ` crore with three public sector banks, to partially finance its capital expenditure plans. NTPC signed three loan agreements aggregating to ` . 1,870 crore with Punjab and Sindh Bank (` . 570 crore), Andhra Bank (` . 300 crore) and Canara Bank (` . 1,000 crore) recently, the company said in a statement. The loans have been extended at the respective base rates of the bank, which is the bare minimum rate at which a bank can lend, the statement said.

Voda Stock Jumps 6% on Joint Bid Report

Ramky Infra Bags ` . 387-cr Orders in Four States

NEW DELHI Ramky Infrastructure on Tuesday

said it has won orders worth ` . 387 crore for various projects in Karnataka, West Bengal, Odisha and Andhra Pradesh. Ramky Infrastructure, the flagship company of Ramky Group has bagged projects worth ` . 386.90 crore across the nation...covering water, waste water and building verticals, the company said. Some of the notable projects include a ` . 138.26-crore project from Hyderabad Metropolitan Water Supply and Sewerage Board for a water treatment plant at Kondandapur in Hyderabad, it said. In Karnataka, the company was awarded three projects for construction of . 151 crore from sewerage systems at a cost of ` Bangalore Water Supply & Sewerage Board.

BLOOMBERG
LONDON

V Umashankar Appointed Govt Director on MTNL Board

NEW DELHI The government has appointed

telecom joint secretary V Umashankar as its representative on the board of state-run telecom firm MTNL. V Umashankar, joint secretary, (telecom) DoT, has been appointed as government director with effect March 15, 2013, in place of Shri Malay Shrivastava, MTNL informed BSE in a filing on Tuesday.

Vodafone Group rose as much as 6.1% in London trading after a Financial Times blog reported that AT&T and Verizon Communications may jointly bid for the British mobile-phone company . Verizon, which co-owns Verizon Wireless with Vodafone in the US, and AT&T have been working on putting together a breakup bid for Vodafone, the FT Alphaville blog said on Tuesday , citing usually reliable people it didn't name. The offer being discussed, should it happen, would be pitched at about 260 pence ($3.95) per share, giving Vodafone an enterprise value of about $245 billion, the Alphaville report said.

Verizon is working to resolve its partnership with Newbury , England-based Vodafone this year to gain full control over its most valuable asset, and has considered a full merger, sources said. In that scenario, Verizon could sell Vodafones international assets to AT&T for a premium, analysts have said. Vodafone spokesman Matt Morgan declined to comment on the report. Vodafone shares rose 9.45 pence, or 5.1%, to 195.05 pence at 11:51 am London time. The stock rose as much as 6.1%, the biggest intraday gain in a month. Shares of the worlds second-largest wireless service provider behind China Mobile, jumped 6.8%on March 6, after reports that Vodafone and Verizon were discussing a deal to end their joint venture.