CORPORATETHE ECONOMIC TIMES MUMBAI MONDAY 10 AUGUST 2009 5

PLANS HOTELS IN JAIPUR, PUNE, AHMEDABAD & INDORE

LIFE PARTNERS

Bharti working on revisedMTN dealNEW DELHI: Bharti Airtel is working on arevised offer for a possible deal with SouthAfrica’s MTN, which may entail higher cashoutgo and additional debt to be raised by theIndian company to fund the transaction,sources said. While there is still no certaintyabout the closure of the deal, the two sides arebelieved to be working on finalising the termsand conditions over the next few weeks. Aftertheir earlier exclusive talks period ended onJuly 31, the two companies extended it by amonth and now have time till August 31.

SC notice to Moser Baer NEW DELHI: The SC has issued a notice toMoser Baer India as to why it should not beasked to pay income tax worth Rs 2,978 crore.A bench headed by Justice SH Kapadia soughtthe reply from the manufacturer of computer-related products, including floppies and CDs,on the I-T department’s plea alleging that thecompany had evaded tax in 2000-01.

Essar Steel to earn Rs 300 crNEW DELHI: Essar Steel has entered into a dealwith Denmark-based Nordjysk Elhandel forselling carbon credits that will earn the Indianfirm about Rs 300 crore over a period of 10years. The agreement between Essar andNordjysk was signed last week and wasfacilitated by the Danish embassy. Under theagreement, Essar Steel will sell carbon creditsgenerated at three of its projects at the Hazirasteel plant in Gujarat to the Danish firm.

BSNL earmarks Rs 1,250 crNEW DELHI: Anticipating to woo a big chunk ofmobile subscribers from rivals to its network,BSNL has earmarked a capital expenditure ofRs 1,250 crore to make its network ready fornumber portability, which allows customersto change service providers without changingnumbers. BSNL is required to make an initialcapital expenditure of about Rs 1,065 crore formaking its basic and mobile networks MNPcompliant, in addition to annual opex ofabout Rs 185 crore for the purpose of MNPservice, said a senior company official.

Mahindra Satyam tax liabilityNEW DELHI: Mahindra Satyam on Sunday saidthe government should not assess the taxliability of the IT firm before the restatementof financial accounts is completed. Reacting toa government statement, which says thatSatyam Computer, which is now rebrandedMahindra Satyam, owes Rs 532 crore to I-Tdepartment, a Mahindra Satyam official said:“Our accounts are still being restated and theassessment must be subject to the final outco-me and any tax liability calculated based onthe previous financial may not be accurate.”

Rio Tinto to invest $100 mMUMBAI: UK-based diamond producer RioTinto diamonds plans to invest $75-100million on a pre-feasibility study of its diam-ond mines project in Madhya Pradesh, a topcompany official said. If the study shows thatthe project is viable, then the company wouldconsider further investments.

Jaiprakash to add capacityMUMBAI: Jaypee group firm Jaiprakash Hydro-Power has plans to add 2,000 mw powergeneration capacity, comprising hydro andthermal, in the current Five-Year Plan periodending 2012. Jaiprakash hydro-power has atotal capacity of 300 mw. It has a hydro powerplant in Himachal Pradesh. The company isplanning to take its total capacity to over13,520 mw with a mix of thermal and hydroin less than seven years from now.

IN A NUTSHELL

Mayur ShettyMUMBAI

THE Mumbai-based financialservices firm Edelweiss Capital isin talks with Japanese insurancegroup Tokio Marine Holdings fora possible joint venture in life in-surance. The Japanese insurer,which is already present in Indiathrough a non-life JV with fer-tiliser co-operative IFFCO, hasbeen on the lookout for a localpartner to start a life venture.

Tokio MarineHoldings, as thename suggests, is theholding company forthe group’s non-life,life and financialservices businesseswhich includes assetmanagement, in-vestment bankingand real estate man-agement. It has beensearching for a newpartner for life insur-ance since IFFCO isnot interested in get-ting into the busi-ness. Besides TokioMarine, Edelweiss isunderstood to havereceived feelers fromoverseas companieslike German insurer Ergo, Nip-pon Life and another MalaysianLife insurer which is keen to en-ter India, said a senior official inthe insurance industry.

It’s learnt that managementconsultancy firm Ernst &Young is advising Tokio Marinein their India strategy. Whencontacted, Rashesh Shah,chairman of Edelweiss Capital,refused to comment.

Speaking to ET, the country

head of a multinational insurancecompany, which is looking for apartner here, said that foreigncompanies need to tie up withsmaller second-rung companies ifthey need an equal say in themanagement. “If they want theadvantage of a strong local part-ner with deep pockets, a well-known brand and a distributionnetwork, they need to acceptplaying second fiddle in the jointventures,” he said. There is also atrend of strong partners, particu-

larly banks, seeking ahigh premium for the26% stake.

Ergo, a part of theMunich Re group,has been scouting fora partner ever since itstie-up with the Herogroup fell through afew months ago. Ergoalready has a pres-ence in non-life in In-dia in partnershipwith HDFC, but needsanother partner forlife since HDFC al-ready has a life com-pany. Nippon Life isanother foreign com-pany that has beenshowing interest inIndia for some years

now, but is yet to make a move.Edelweiss is into investment

banking, stock broking, wealthmanagement and asset manage-ment. The company is listed in thestock exchange and has a marketcapitalisation of Rs 3,100 crore.The company has announced a Rs58 crore of consolidated net profitfor the quarter ended June 2009,up 41% from the correspondingquarter last year.

mayur.shetty@timesgroup.com

Edelweiss intalks with Tokio

Marine for JV

Chauhans lock horns overParle brand, yet again

Parle Products Objects To Parle Agro Using Brand Name For Its Snack FoodsParamita Chatterjee &

Ratna BhushanNEW DELHI

THE two factions of the Parlefamily — Parle Products andParle Agro — are involved in a

legal tussle yet again. Vijay and SharadChauhan-led Parle Products, makersof KrackJack and Poppins, has filed afresh case against Prakash Chauhan-owned Parle Agro, makers of Frootiand Appy, in the Bombay High Court.This time, Parle Products, a dominantplayer in biscuits and confectionery,has objected to Parle Agro using the‘Parle’ trademark for its foray intosnack foods with its Hippo brand.

Parle Products believes that usingthe name ‘Parle’ in confectionery andbiscuits is its exclusive right as per anearlier family agreement. However,Parle Agro feels it is not legally boundto stop using the Parle brand name forits own confectionery and snacks aslong as it has separate product identifi-cation marks. In this case, the productidentification mark is Hippo.

Even though all family businesses ofthe Chauhan cousins are allowed to

use the Parle trademark, the compa-nies under them have traditionally nottrodden on each other’s territories.

Parle Agro introduced Hippo, abaked wheat-based snack, in Junethis year to tap the Rs 6,500-crore or-ganised snack market. The domesticsnack foods industry remains largelyfragmented and significant players inthe category include PepsiCo’s Frito-Lay, ITC Foods’ Bingo and Parle Prod-

ucts with its Musst Bites. The new case will come up for

hearing in the Bombay HC by August-end, two people familiar with the de-velopments told ET. Officials of thecompanies did not comment, sayingthe matter was sub-judice.

Parle Products had earlier draggedParle Agro to court and contested theuse of the Parle trademark on its con-fectionery products. Parle Products has

been a dominant player in confec-tionery segment for decades, and itfeels the rival faction is flouting a familyagreement by using the Parle name forits two-year old confectionery venture.

In January this year, the High Courthad passed a judgement which al-lowed Parle Agro to use the Parlename for its businesses. Parle Productshad contested that judgement and thecase remains unsettled.

The battle between cousins PrakashChauhan and Vijay and SharadChauhan has been on for close to twoyears now.

The Chauhan family had amicablysegregated the Parle trademark intoseparate business. Confectionery andbiscuits have been an exclusive do-main of Parle Products under SharadChauhan and Vijay Chauhan for sev-eral decades. Parle Product’s flagshipbrands include biscuits Parle-G,Melody, Mango Bite, Poppins, Mona-co and KrackJack. Prakash Chauhan’sParle Agro markets juices and waterunder Frooti, Appy, LMN and Bailley.Ramesh Chauhan, Prakash’s brother,manages the bottled water businessunder the Bisleri brand name.

Meenakshi Verma AmbwaniNEW DELHI

UK-BASED investment groupDuet’s Indian hospitality fund,Duet India Hotels, has committedinvestment worth $45 million inthe country, when few private eq-uity players are active in this space.

Besides acquiring the Indianhospitality assets of another UKfirm, Dawnay Day Hotels, for $33million last year, the group hasnow bought land in Hyderabad for$12 million for a 220-room hotel.

“We are working on construc-tion of four hotels in Jaipur, Pune,Ahmedabad and Indore totalling650 rooms. Our first hotel atJaipur is expected to open within amonth,” said Dilip Puri, chief ex-ecutive officer, Duet India Hotels.These hotels would be positioned

in the mid-market segment.Duet India Hotels, a $166.5-

million fund, is part of Duet Pri-vate Equity (DPEL), the privateequity, real estate and corporate fi-nance arm of the Duet Group thatmanages several global invest-ment funds. The Indian hospitali-ty fund is primarily focusing ondeveloping hotels in the mid andupper-mid segment. “We follow abrand-agnostic strategy and select

brands on the basis of the locationand type of hotels and availabilityof a franchise,” said Mr Puri.

The fund will try and replicatethe global hotel managementmodel in India. Under this strategy,it would either build a new hotel orbuy an existing property and thenstrike a deal with hotel firms forbranding. A third-party hospitalitymanagement firm, JHM Interstate,will manage Duet’s hotels in India.

JHM Interstate hotels is a jointventure hotel management com-pany between JHM Hotels, a US-based hotel ownership and man-agement company, and InterstateHotels, an independent hotelmanagement firm. Globally, boththe companies manage propertiesfor brands like Marriott, Hilton,Sheraton, Westin, Radisson, Dou-bletree and Wyndham.

UK’s Duet lines up $45 mfor India hospitality push

Indage staffers takesalary issue to policeSushmi Dey & Boby Kurian

NEW DELHI | BANGALORE

TROUBLED Indage Vintners(IVL), India’s oldest winemaker, isslipping into turmoil. Employees ofIndage have approached theMumbai police after not being paidsalaries of three-eight months.

A group of about 60 employeesfrom across the country jointly fileda complaint with the office ofdeputy commissioner of police,Worli, last Friday, following thecompany’s failure in sticking to acommitment that salaries and statu-tory dues will be paid by August 5.

These development come afterIndage chairman ShamraoChougule, widely considered a pio-neer of India’s wine industry, in animpassioned internal communica-tion said: “The hardship caused tothe employees and their familieswill remain a nightmare for me formy lifetime.”

Unimpressed, the employeessaid they remain clueless on whathappened to a promise made bythe promoter family about meet-ing salary obligations by dilutingpromoters’ equity. In June, thecompany said it was bringing inover Rs 90 crore by diluting around42% stake in what appeared to bea distress valuation for the enter-prise. IVL — makers of Riviera,Chantili and Vino brands — re-ported standalone revenues of Rs267 crore in FY08 (it is yet to pub-

lish the latest fiscal numbers), butcarries debt estimated at over Rs350 crore. “We employees are fac-ing severe financial difficulties dueto non-payment of wages, affect-ing the lives of our families. Theemployees have lodged a writtenpetition to register a case of ‘Breachof Employment Terms’, accordingto the law, against ShamraoChougule, chairman; RanjitChougule, MD, and Shilpa Cha-purkar, HR head,” said a letter ad-dressed to the deputy commission-er of police, a copy of which is ob-tained by this newspaper.

A request made for an interac-tion with Mr Chougule did not ma-terialise at the time of going to press,with the company spokesperson

seeking more time.Admitting that the manage-

ment’s poor judgement could haveexacerbated the impact of the eco-nomic slowdown on the company,Mr Chougule’s letter to the em-ployees lists a litany of woes: “In-ability to pay salaries, wages andsuppliers have seen the collapse ofsales channels resulting in collec-tions not commensurate with thecost of infrastructure created by us.The production has been seriouslyimpacted due to non-availability ofmaterials and other support.”

“The creditors, including bankers,ICD and other borrowings, have notbeen able to be serviced with desiredlevel of proficiency. The lack of com-munication with stakeholders havefurther impaired the reputation andimage of the enterprise. While at apersonal level, I have incurred hugecosts, including disposal of my sharesby creditors and inability to give sat-isfactory answers even to my well-wishers, I have always believed inthe future,” said Mr Chougule, whohas come out of retirement to savethe three-decade-old enterprise.

Indage’s financial travails come ata time when India’s nascent wine in-dustry has suffered setbacks with theeconomic slowdown denting fancygrowth projections. ET had earlierreported that Indage was in financialdistress, with the company shuttingdown operations in most parts of thecountry leading to a precipitous fallin its sales and market share.

Meenakshi Verma AmbwaniNEW DELHI

APEEJAY Surrendra Group’s hospitality arm, ThePark Hotels, plans to invest Rs 1,000 crore to add fournew hotels in the country, said its chairperson PriyaPaul. The privately-held company wouldopen hotels in Hyderabad, Pune andJaipur, besides opening its second hotel inKolkata in the next three-four years.

The expansion would be fundedthrough internal accruals and funds fromits financial partner Credit Suisse, whichpicked up about 15% in the company in2007 for over Rs 220 crore ($55 million).

“We would be opening our 280-room hotel in Hy-derabad this year. This will be followed by hotels inPune, Jaipur and Kolkata that will double our roominventory to 1,700 rooms,” said Ms Paul.

The Park is a luxury boutique hotel chain withproperties in Bangalore, Chennai, Navi Mumbai,

Kolkata, New Delhi and Vishakhapatnam with 834rooms. “We are investing about Rs 320 crore in Hy-derabad and estimated Rs 270 crore in the Puneproperty. Another Rs 500 crore would be put in theJaipur and Kolkata hotels,” she said.

Park Hotels is scouting for land purchase to build asecond hotel in Mumbai and is also openfor management contracts. “By this year-end, we will take up our first manage-ment contract and will manage a luxurycruise and resort in Kerela, which willalso be our first leisure property,” Ms Pauladded. The company is looking to even-tually have 20-25 properties in the long-run under the brand, The Park.

The hospitality firm, which is largely catering tobusiness travellers, believes that Indian corporate trav-el spending has witnessed an upswing in the past two-three months. “International corporate spends are stillrecovering, but Indian companies have already startedspending on travel and conferences...,” she said.

Park plans Rs 1k-cr expansion

Sutanuka GhosalKOLKATA

AMBOOTIA Group, the second-largest Dar-jeeling tea producer in the country, has just ac-quired Bush Tea for an undisclosed sum. Thedeal was concluded on Sunday after protractednegotiations for 10 days between AmbootiaGroup chairman Sanjay Bansal and Bush Teaowner Vijay K Awasty.

Confirming the development, Mr Bansaltold ET: “We have just concluded the deal.Bush Tea is regarded as one of the reputed teaexport houses in the world. They are suppliersto all leading tea brands in the world like Tet-ley, Starbucks and others. This acquisition willhelp double our export turnover to Rs 100

crore by the next finan-cial year.” However, MrBansal did not reveal thedeal size.

The acquisition of BushTea will help the Am-bootia Group take overthe one acre blending fa-cility of Bush Tea at Hyde

Road. “We will be able to access all the interna-tional brands that Bush Tea was supplying teasto,” Mr Bansal added.

Ambootia Group now has 15 tea estateswithin its fold. Of this, 12 gardens are in Dar-jeeling and two each in Assam and Dooars.

Incidentally, Bush Tea kicked off its sojournback in 1972 in Calcutta under Mr Awasty, a teataster and a buyer of repute. Subsequently,Bush Tea acquired the business of Lyons old teawarehouse. Bush Tea has dealt with both or-thodox and CTCs right from its inception. As aresult, it has steadily shipped Indian flavouredtea to the US, the UK, Ireland, Germany, Egypt,Japan among other nations.

Darjeeling’sAmbootia Group

buys Bush Tea

HUNT’S

ONTokio Marine islooking for a newpartner for lifeinsurance sinceIFFCO is notinterested in gettinginto the business

Apart from buying the

Indian hospitality assetsof Dawnay Day for $33 m,the group’s bought land inHyderabad for $12 m for

a 220-room hotel

ROOM FOR MORE

A group of around 60

employees of Indageacross the country haveapproached the Mumbai

police after not being paidsalaries of 3-8 months

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