Saturday, September 26, 2009
As part of the deal, NBVL will also have to set up a power plant and invest fresh money in the mine.
Though primarily conceived as a transaction that will earn the company more revenue by operating a mine and generating power abroad, it’s also an opportunity for NBVL to expand its global reach and earn additional revenue by selling surplus coal from this mine in adjoining markets.
The second global acquisition by NBVL, caution analysts, may prove to be tricky since it will also have to deal with labour problems and salary arrears.
The company won against rivals that included Vedanta Resources Plc, South Africa’s Londoloza Resources Corp., Borneo Mining SA, London-based Aldwych International Ltd and the Zambezi Consortium Ltd comprising investors from Mauritius and Zambia.
NBVL, which had some Rs1,168 crore of reserves as on 31 March, plans to fund the $550 million (Rs2,640 crore) acquisition with a 70:30 debt-equity ratio, said Managing Director Panda Trivikram Prasad. “We plan to dilute our stake in the special purpose vehicle Nava Bharat (Singapore) Pte Ltd (NBS) to mobilize the necessary equity funds at an appropriate time,” he said.
The company acquired its first overseas asset, an Indonesian mining firm, in January through wholly owned subsidiary NBS.
The Zambian government had invited global bids, which closed in March, to privatize Maamba Collieries Ltd. The rider was that the winning company will also have to set up a 300MW power project, the fuel for which would be sourced from the coal mine, to meet the demand for power at the country’s copper mines.
“A consortium comprising NBS and a Zambian group bid against a global tender for a 65% equity stake in Maamba Collieries Ltd, a company held 100% by ZCCM IH, a government investment holding company of Zambia. The NBS consortium was chosen as the preferred bidder by ZCCM IH (ZCCM-Investment Holdings Plc),” G.R.K. Prasad, director (finance and corporate affairs) at NBVL, said on Thursday.
Apart from around $50 million to be paid to the Zambian government, setting up the power project will require an investment of around $140 million, and recapitalization of the coal mine and increasing coal production will require an investment of around $360 million.
Going by recent coal deals, if the reserves are not proven, the valuation of a mine is around 10-20 cents per tonne. For proven resources, it is 50-60 cents per tonne. Operational mines come with a much higher price tag of around $2-3 per tonne.
“Nava Bharat is on the verge of concluding a monumental deal with ZCCM-IH on Maamba Collieries to establish a coal power station,” Andrew Chipwende, director general of Zambia Development Agency, said in an email response.
“These are distress assets and there are a lot of liabilities. The coal will be mined and sold there,” said a person aware of the development, who did not want to be identified.
Workers at the mine have not been paid for months and production has been hit.
NBVL posted a net profit of Rs520.57 crore on sales of Rs1,350.05 crore in 2008-09. On a paid-up equity of Rs15.22 crore, the company’s reserves stood at Rs1,168.24 crore as on 31 March.
“The transaction is likely to be consummated by December 2009,” G.R.K. Prasad added.
Managing director Trivikram Prasad said, “The process is expected to take (a) couple of months and a purchase-cum-sale agreement with the Zambian government could be inked before the year-end. The priority would be on mining activities in the first phase. (The) power project would come up in the second phase and would take off within three years.”
At present, Zambia’s copper mines consume up to 60% of the country’s power generation of around 1,600MW, and many of them have suffered on account of nationwide power failure in January.
Analysts say coal mining costs are expected to rise due to demand pressures on equipment and human resources in particular, but the sector will still hold value for investors who choose to mine rather than purchase at prevailing market rates.
Friday, September 25, 2009
"Natco Pharma has launched Natflu capsules (generic version of Tamiflu - Oseltamivir) the first cure for swine flu to be available against medical prescription at chemists across India," announced V C Nannapaneni, chairman & managing director.
Globally, this drug is approved both in treatment and prevention of swine flu. Natflu is being launched all over India by Natco but since Maharashtra and Karnataka are the states where maximum Swine Flu deaths have been reported, these two states are the immediate focus areas. The company is ready with 1,25,000 doses and can meet any expectation depending on the seriousness of the Swine Flu situation.
The medicine, whose maximum retail price is fixed at Rs 480 for a bottle of 10 capsules, is available in all Schedule X pharmacies. Natco is working with low margins for this drug from the humane angle and not for purely commercial reasons.
Natco Pharma has tied up with Medplus for distribution and is in talks with other distributors to ramp up its channel across India. The company expects to release 10 million capsules of Natflu by October 2009.
Natco Pharma has four manufacturing facilities in Andhra Pradesh and Dehradun and employs around 2000 people. It has been consistently ranked among the fastest growing pharmaceutical companies in the country. It manufactures branded and generic dosage forms, bulk actives and intermediates for both the Indian as well as the international markets. The company is a pioneer in Timed Release Dosage Systems in India.
Wednesday, September 16, 2009
Saturday, September 12, 2009
The launch is timed for the mini summer season building up to the festival season and would be available both in traditional kirana stores and MTO's (modern trade outlet) across South India.
The category-first 275 ml pet bottle with the distinctive wide mouth and grip-handy neck brings alive the long chilled drink experience straight from the bottle. The 275 ml. mango pack retails at Rs12 and the 550 ml. at Rs 22 while the apple-litchi is priced at Rs13 and Rs 24 respectively.
Branded fruit juices consumed primarily as thirst quenchers with fruit pulp content up to 20% are classified as fruit drinks and constitute the most popular segment in India accounting for nearly 76% in the overall market. The South Indian fruit juices market is estimated at 92 million litres with 98% contributed by fruit drink beverages.
Announcing the launch at the Media Preview today in Chennai, Jay Galla, and managing director said, "With in-house process over the entire value chain - right from the farmer to the consumer - we have complete control. Beginning with the selection of fruits to the final product in the bottle, every single step goes through the rigorous Galla Foods quality control. This ensures Galla fruit drinks are the best and the freshest in the market."
"Though the thirst quencher segment takes the lion's share among branded fruit juices, it has been more of a volume driven market. The consumers so far had to settle for the smaller size tetra-pack, glass bottle or an occasional pet bottle to quench their thirst while at home or on the move. We are offering them a tasty thirst quencher in a very trendy pack at a very attractive price. The unique long neck-wide mouth bottle with 275 ml drink will give the consumer the true long fruit drink experience. Our target is to reach 10% market share in the fruit based beverage category within 5 years. We are planning more new launches shortly," he added
Set up in 2005, Galla Foods is a premier exporter of fruit concentrates and pulp to top institutional buyers in Europe, Japan and the USA. Last year, the company entered the domestic market with the launch of the thickest mango nectar in India - the Galla Thick Mango. Recently mango blends were added to the portfolio.
Galla Foods Private Ltd, a member of the Amara Raja Group, is a premier exporter of the finest tropical purees and concentrates.
Middle East Coal (MEC), a joint venture between Trimex Group (Prasad Koneru, Chairman and MD) and the UAE Government-owned RAK Minerals and Metals Investment, has initiated talks with these players to swap equity for coal. The company assures coal supply at $35-$40 a tonne for 15 years. Currently, coal prices are around $50-$55 a tonne.
MEC is developing a coal mine at East Kalimantan in Indonesia with proven reserves of two billion tonnes at an investment of $1 billion.
Mr Madhu Koneru, Executive Vice-Chairman, MEC, said production would begin with two million tonnes by the middle of next year and would be ramped up to 15 million tonnes by November 2011.
“We have floated a tender of $1 billion to develop a coal jetty and rail link of 130 km to transport the coal from the mine. With such huge investments, we thought of forward integration by joining hands with the promoters of large power projects,” he added.
The company wants to sell 70 per cent of its production to India and the balance to China.
On an average, about 17 million tonnes of coal are needed for a generation capacity of 5,000 MW. Coal accounts for about 60-70 per cent of the power production cost in India for producers dependent on imports.
Though companies such as Reliance Power, Tata Power and Adani Power have their own mines in Indonesia, MEC is confident of convincing Indian companies as the price it is offering is quite attractive.
It has managed to offer a lower price compared to others as the rail link being developed will result in savings of about 50 per cent of transportation costs.
The company is targeting new power projects as existing companies use coal with calorific value of 6300 KCal while MEC will produce coal with calorific value of 5300 KCal. The stripping ratio of MEC mines is 1:1 (mud to coal), while for most mines it is 8:1, said Mr Koneru.
MEC has also signed an agreement with Nalco which plans to set up a one million tonne alumina smelter at the coal mine site in Indonesia. Nalco will hold 74 per cent stake in the project while MEL will have 26 per cent equity to provide assured coal supplies. The company is in the process of negotiating the price, he said.
Reliance Industries Executive Director PMS Prasad has been awarded the 'Energy Executive of the Year' 2008 award, instituted by the London-based renowned energy journal Petroleum Economist.
"Prasad was recognised for leading the development of Reliance Industries move from a refining and petrochemicals group into a successful, vertically diversified E&P (Exploration & Production) business," RIL said in a statement.
"Under his leadership, RIL commissioned India's first ...deep water oil production facility in a record time of about two years from discovery, and more recently in April 2009, successfully commissioned the world's largest deep-water gas production facilities in a record time of about six and half years from discovery," Petroleum Economist said as part of the nomination.
The award comes as a recognition of the leadership role which Prasad played in bringing India's largest gas field to production within seven years from discovery. The KG D6 block commenced production in a very short time in April this year, despite tight global conditions, the RIL statement said.
The 70-year-old energy publication, Petroleum Economist, which is the official publisher of most of the global energy events, including World Petroleum Congress and World Gas Conference, has nine award categories, with the most coveted one being the 'Energy Executive of the Year Award.'