Havell’s acquire German lighting firm Sylvania for $300 mn

Havell’s India has acquired Germany’s SLI Sylvania’s lighting business for $300 mn (about Rs. 1350 crores) in an all-cash deal, from a group of private equity firms. This is the biggest overseas takeover by an Indian electrical equipment manufacturer in the lighting business.

The acquisition was made through Havell’s Dutch subsidiary, Havell’s Netherlands BV and would be funded through a mix of debt and internal accruals. The combined revenues are expected to be $1 bn. Deutsche Bank was the advisor to Havell’s on the transaction and Barclays Capital would provide the financing to the deal.

SLI Sylvania operates in key geographies of Europe, Latin America and Africa through 10 manufacturing facilities. The company would get access to all of Sylvania’s markets across the world except Mexico, US, Australia and New Zealand where the business is owned by German lighting firm Osram, one of the largest lamp manufacturers in the world. Sylvania Osram had sold its lighting business to a consortium of three private equity funds comprising Subros, JP Morgan and DDG Capital and Havell’s has acquired the business from this consortium.

Read more on this in Moneycontrol.com.
Related Post:
Havell’s may buy UK lighting company for Rs. 1000 crores

GIC, Deutsche Bank, L&T Infra submit bids for SICOM stake

Government of Singapore Investment Corporation (GIC), Deutsche Bank, Standard Chartered Bank and L&T Infrastructure have submitted their bids along with eight others with the Specified Undertaking of Unit Trust of India (SU-UTI) for acquiring its 40% stake in the State Industrial Corporation of Maharashtra (SICOM), the investment arm of the Maharashtra government. The tender invited by the SU-UTI closed in the second week of February and 12 parties have submitted their expressions of interest. Currently, the Maharashtra government holds 49% in SICOM, SU-UTI 36.5% and another 3.5% stake is held by UTI AMC.

ICICI Securities has been appointed as the merchant banker by SU-UTI for the stake sale. It will hold talks with the interested buyers soon. SU-UTI is also said to be in talks with the state government to offload its stake in SICOM.

SICOM has posted a net profit of Rs. 33.98 crores in 2005-06, up 69% from Rs. 20.15 crores in the previous year. SICOM offers advisory services to the state government, Maharashtra Electricity Regulatory Commission and other corporates. It is launching a second venture fund and would be soon offering merchant banking, treasury management and real estate development through subsidiary or joint ventures.

Read the Business Standard article.
Related Posts:
IFC, DEG planning to acquire a stake in SICOM
UTI to divest 36.58% stake in SICOM

ICICI Bank raises $500 mn via five-year bond

ICICI Bank has raised $500 mn (Rs. 2205 crores) through dollar-denominated five-year bond overseas. The bank will pay a coupon of 62 basis points above the London Inter-Bank Offered Rate (LIBOR). Road shows for the issue were conducted in London, Singapore, Hong Kong, and Paris. Barclays Capital and Deutsche Bank AG were the lead managers to the issue. This is the second time that ICICI Bank is tapping the overseas market in 2007. In January this year, ICICI Bank had raised $2 bn through a bond issue in three tranches.

Read the article in Business Standard.

Investment banking fees in India touch $200 mn from Jan-Feb 2007

Investment banking houses in India have generated a deal fee of around $200 mn in the months of January and February in 2007, as compared to $150 mn for the total year of 2006. Total fees earned during 2006, including equity and debt capital for India, was around $500 mn. Of the $500 million, equity capital markets could have contributed around 60% while around 10% could be the debt capital market fees. The M&A transactions have contributed the remaining $150 mn. Equity and capital market deals entail issuance of shares and bonds by companies to raise money.

For multi-billion deals above $10 bn, advisory fees range from 0.1% to 0.2% of the deal size or anywhere between $10-25 mn. Global i-banks charge a minimum of $1 mn. For small-sized deals, the fee could be around 3.5% of the deal size. With corporates looking at big-ticket deals which require large syndication ability of banks, a commitment fee is also now being levied. This would ensure a minimum payment to i-banks from the deal, even if the corporate eventually loses out in the bidding battle. As deals turn complex, i-banks have also started levying ‘drop dead’ fee or non-refundable fee in case of failed transactions. This is simply to compensate for their time and effort. The bigger chunk of the fee collected by i-banks is garnered from financing and structuring the deal. This fee could range anywhere between 0.50% and 1.25% of the deal size. Fees are higher for equity transactions.

In most of the recently announced deals, European banks have been the lead advisors as Europe has been the destination for the maximum number of acquisitions by Indian corporates. In case of Tata Steel, it was ABN-AMRO, Deutsche Bank and NM Rothschild, while in case of Vodafone and Hindalco, UBS was the sole advisor.

Read more in The Economic Times article.

ChrysCapital sells Global Vantedge BPO to Essar-owned Aegis Communications

ChrysCapital has sold one of its portfolio companies, Global Vantedge, a credit and receivables management BPO to the Essar-owned Aegis Communications for around Rs. 100 crores. ChrysCapital had set up the Global Vantedge in 2001 and owned 75% in the firm. Global Vantedge is headquartered in the US and employs around 1500 people in two centres in Gurgaon. It specializes in credit and receivables management and its customers include credit card, telecom and auto companies, mostly in the US and UK.

Aegis has a turnover of around $180 mn and employs over 9000 people in India and USA, operating from 24 centres and 18 cities around the world. It offers multi-channel customer relationship management services including customer acquisition and customer services, back office services, as well as value-added services. These services are offered across verticals such as telecom, retail, financial services, energy, education and logistics. The credit and receivable management services of Global Vantedge will strengthen Aegis’ customer relationship management portfolio. Essar and Deutsche Bank had bought 80% share in Texas-based Aegis Communications for $28 mn in November 2003. Subsequently, the Essar Group increased its stake in the company.

Read The Economic Times article.

SBI to raise $700 mn from markets overseas by March 2007

The State Bank of India will raise $700 mn by March through placing long- and medium-term bonds overseas. The bank may also go for a follow-on public offer in 2007-08. The borrowing is part of the $2 bn medium term note programme of SBI. It has hired Barclays and Citigroup to sell dollar-denominated bonds. Deutsche Bank and HSBC will also manage the sale. The four banks will also arrange a sale of five-year notes. The bank is raising funds to meet new Central bank rules on capital levels and meet demand for loans. The Reserve Bank of India (RBI) on 21 July permitted banks to increase capital by selling debt overseas. SBI last month increased $300 mn of bonds it sold in December to $500 mn.

Read the Business Standard article.

Deutsche names Sanjay Sharma head of India equity capital markets

Investment banking in India is bearing witness to many high-profile people movements of late. After Citigroup’s investment banking head Surojit Shome’s move to Lehman Brothers India, we now hear of Merrill Lynch old hand Sanjay Sharma quitting Merrill to lead Deutsche Bank’s Indian equity capital markets operations. Sharma’s vacancy is being filled by Sumeet Puri, who will be moving from his post as Asian equity syndicate head from Hong Kong (See Related Post).

Indian equity capital markets volume jumped 22% to more than $19 bn last year, as total investment banking revenue hit a record $413 mn. Indian stocks rose more than 45% in 2006. Deutsche ranked second in investment banking revenues behind Citigroup, with $42 mn in revenues from underwriting stock and bond deals and advising on mergers.

Investment banks like Lehman Brothers, Goldman Sachs and UBS are expanding their
India teams as the country’s companies become bigger global players. Lehman last month poached Citigroup’s Surojit Shome as head of investment banking for India. Bankers, particularly non-resident Indians, are keen to move to Mumbai and New Delhi as top salaries approach the same levels as those in Singapore and Hong Kong, and the market yields increasingly large and interesting transactions. However, intense competition between banks has taken a bite out of fees, with equity deals only paying an average of 1.6%, compared with 2.3% for Hong Kong offerings and up to 7% for initial public offerings in the United States.

Read the article in Reuters.com.

Deutsche Bank’s real estate arm in talks with Emaar-MGF for investments worth $200 mn

Deutsche Bank’s real estate arm is in advanced stages of talks with real estate major Emaar-MGF to invest around $200 mn in the company. If the transaction goes through, it could possibly be the biggest deal in the real estate sector in India. As of now, the largest private equity transaction in the realty space has been Morgan Stanley Real Estate Fund’s $125 mn investment in Mumbai-based Oberoi Constructions (See Related Post).

Deutsche Bank’s investment will be done through its New York-based real estate arm RREEF. RREEF is one of the biggest real estate investors in the world with over $65 bn in assets under management. It currently has seven separate funds around the world which make investments in real estate and infrastructure. It provides services in fund management, investment management, asset management, property management, leasing, research, construction and development.

The stake Emaar-MGF will dilute is not known as the transaction is expected to be a quasi-equity deal. RREEF will hold convertible debentures in the company. Last year, Citigroup and New York Life Insurance had picked around 2% equity in Emaar-MGF Land for a consideration of $100 mn. Evolvence India Fund had recently invested $41 mn in Emaar-MGF.

Emaar-MGF is a joint venture between the Dubai-based real estate company Emaar Group and India-based MGF Developments. It plans to hit the capital market sometime in the third quarter of 2007. It is expected that the JV will dilute about 5-10% of its equity in the IPO. On the hospitality front, Emaar-MGF recently entered a 50:50 JV with French hospitality chain Accor. The JV aims to build and operate a chain of 100 budget hotels with an investment of $300 mn. Of this, the first 20 are likely to come up on Emaar-MGF’s existing land bank.

Read The Economic Times article.

Deutsche Bank emerges as leading foreign debt arranger for India

German banking major, Deutsche Bank, has emerged as the number one arranger of foreign currency bonds for Indian borrowers in 2006. Deutsche Bank AG has managed a number of landmark deals in India, including a $400 mn deal for ICICI Bank, a $ 150 mn deal for UTI Bank as well as the longest-dated bond in Japanese yen from an Asian borrower, with a 10-year deal for Reliance Industries. In equity-linked deals, Deutsche Bank executed the largest ever capital market financing for an Indian pharmaceutical, with a $440 mn deal for Ranbaxy Laboratories Limited. The bank was also the sole book-runner on the $500 mn convertible bond for the Anil Ambani-spearheaded Reliance Communications Limited.

Read the article on the Zee News website.

Indiabulls’ overseas real estate arm raises Rs. 1200 crores from LSE’s AIM

Indiabulls Real Estate’s overseas arm, Dev Property Development has raised Rs. 1200 crores from the London Stock Exchange’s AIM market. Investors include LN Mittal, Fidelity, Capital Research and the Singaporean government having picked up large stakes in the IPO. The company’s shares will start trading on the exchange from Monday. The Dev Property IPO was managed by Deutsche Bank, Citigroup and UBS. The lead marketing agent of the issue was CLSA and KPMG is the statutory auditor of Dev Property Development.

Dev Property Development will buy minority stakes in the projects of Indiabulls through a secondary sale of shares by the latter and by investing fresh equity capital in Indiabulls’ projects for a total consideration of Rs. 1055 crores. Indiabulls had received Rs. 437 crores by partial sale of its stake in Jupiter Mills and Elphinstone Mills development projects. Dev Property has also invested Rs. 618 crores in subsidiary companies of Indiabulls undertaking real estate projects. It would also have the right to co-invest along with Indiabulls in its future real estate projects.

Knight Frank has valued Indiabulls’ real estate projects at Rs. 21,569 crores and Indiabulls’ stake in its projects at Rs. 15,125 crores. Indiabulls’ real estate business has been de-merged to Indiabulls Real Estate and its shares are expected to start trading in February. All shareholders of Indiabulls Financial Services received one share of Indiabulls Real Estate for every share they held in Indiabulls Financial Services. In December, Indiabulls Infrastructure, a subsidiary of Indiabulls Real Estate, had sold 13.3% stake to LN Mittal and Farallon for a consideration of Rs. 447 crores.

Read The Times of India article.

UTI mandates banks for $250 mn

UTI Bank has mandated Citigroup and Deutsche Bank as lead managers for raising $250 mn via three-year floating rate notes, a source close to the deal said on Monday. Investor presentations will take place in Singapore on Tuesday. Timing of the issue launch and bond pricing will be decided subject to market conditions (Source – The Economic Times).

Core Projects gets equity infusion from Morgan Stanley, Goldman Sachs, Deutsche

Bulge bracket investment banks Morgan Stanley, Goldman Sachs and Deutsche Bank have picked up 10% stake in Mumbai-based software firm Core Projects and Technologies Limited (CPTL) at a combined investment of Rs. 39.76 crores. Morgan Stanley has taken the largest share at 4.03%. Goldman Sachs, through its investment arm Grants Investments Limited, has taken 3.46% and Deutsche Bank 2.59%.

Core Projects was recently in the news for its plans to acquire two US-based software firms. It is also setting up an offshore development centre in Navi Mumbai, to be completed by January-end 2007.

The stake was picked up following conversion of FCCBs issued in November 2006. FCCBs of the value of Rs. 15.90 crores still remain for conversion into equity shares.

Read The Economic Times and Business Standard articles.
Related Post: Mumbai-based software company Core Projects plans two US buyouts

Mumbai-based software company Core Projects plans two US buyouts

Core Projects, a Mumbai-based IT company involved in education projects, is about to acquire Aarman, an ERP software company and SkyBridge. Both companies are US-based. The deal size for Aarman is estimated to be around $8 mn; it has revenues of around $10 mn. SkyBridge may be bought for $8-10 mn. Announcements are expected in the first week of January. A third acquisition in the UK is said to be at a preliminary stage.

Core has raised funds for these acquisitions through a recent FCCB issue. The company had issued 1, 225 FCCBs of $10, 000 each in November 2006. The issue had collected Rs. 56 crores and the bonds have been listed on the Singapore Stock Exchange.

The company now has a kitty of Rs. 100 crores which includes FCCB proceeds and internal resources. Financial majors including Morgan Stanley, Deutsche Bank and Goldman Sachs have converted the bonds into equity and have picked up a 10% stake for $8.75 mn. The stake has been acquired following the conversion of the FCCBs by financial majors at Rs. 315 per share for Rs. 10 each, against the FCCB price of Rs. 310. The Core scrip closed at Rs. 469 on Thursday on BSE.

Morgan Stanley has the largest share at 4.03%, Grants (a Goldman Sachs subsidiary through which they will hold the stake) has 3.46% and Deutsche Bank has 2.59%. FCCBs worth $3.5 million still remain for conversion.

Core is present in verticals like education, pharmaceuticals and bio-science. The company, however, has a strong focus on education. It essentially maintains management information system for government-aided schools. Based on the data collected it devises solutions and analyses drop-out rates among students. Recently, it had bagged a Rs 25-crore project from the Jharkhand government to maintain education records of state government schools.

Read The Economic Times article.

OnMobile buys out ITFinity

OnMobile, a provider of ring tones and mobile-commerce services, has made a 100% buyout of ITFinity, reports The Economic Times. ITFinity is a specialist software company. The transaction value is around $15-20 mn.

The investors of ITFinity represent a who’s who of the private equity world. These include Rajat Gupta of McKinsey & Co, Ashish Dhawan of ChrysCapital, Luis Miranda of IDFC, Mumbai-based Edelweiss Capital and Rajesh TS Reddy, former founder of Unimobile.

OnMobile has the backing of IT giant Infosys. In October 2006, Deutsche Bank, Goldman Sachs and Polygon Investment Partners acquired a 10% stake in OnMobile for about $27.8 mn, valuing the company at $270 mn.