Peter Mukerjea’s private equity-funded broadcast venture INX Media officially launched

Two new media companies INX Media Private Limited and INX News Private Limited, promoted by ex-Star CEO Peter Mukerjea and his wife Indrani, have been officially launched. The full bouquet of channels will include a Hindi entertainment channel, an English news channel, various entertainment channels in regional languages, a music channel and city-specific channels. INX Group promoter Indrani Mukerjea will be chairperson of the venture.

The Hindi general entertainment channel, the music channel and the English news channel will be launched by the last quarter of the year while the other channels will be rolled out over the next two years. Funding for the entertainment company INX Media has come in from Temasek Holdings via Dunearn Investments, New Silk Route, New Vernon, Kotak and SREI Group. The news company, INX News, will be 26% owned by the entertainment company and, in accordance with government regulations, by a single Indian entity drawn from the INX Group. Heading INX News as CEO and editorial head is Vir Sanghvi.

No single fund will own more than 25% of the entertainment channel. A portion of the equity will be kept aside as sweat equity for key employees both in the entertainment and the news companies. The two companies have already applied for necessary permissions.

Kotak Investment Bank is the exclusive adviser to the INX Group on this transaction. Amarchand & Mangaldas & Suresh A Shroff & Co. are the legal advisers to the group. The investors in INX Media which will have the entertainment and the music channels include Dunearn Investments, a wholly owned subsidiary of Temasek Holdings, NSR PE, a fund advised by New Silk Route Partners, New Vernon Private Equity, SREI, Kotak Mahindra Capital Company and Kotak Private Equity and IM Media Private Limited.

Read more in the article on indiantelevision.com.

Temasek, Crown Castle in talks with Tata Teleservices for stake in towers business

Singapore-based government private equity arm Temasek Holdings and wireless tower operator Crown Castle International are in talks to buy around 15% in the mobile phone towers business of Tata Teleservices Limited. Tata Teleservices is in talks with several firms about spinning off its mobile phone towers into a separate unit, part or all of which could then be sold. The tower business of Tata Teleservices has been valued at up to $1 bn. Temasek already holds nearly 10% of the company, which has more than 5000 mobile phone towers. Tata Teleservices, along with subsidiary Tata Teleservices (Maharashtra) Limited, has more than 15.5 mn subscribers in India.

Rival firm Reliance Communications Limited is spinning off its towers business into a separate unit. American Tower Corporation as well as private equity firms including Blackstone, Carlyle and Temasek have shown interest in Reliance Communications’ towers unit.

Read the article in The Economic Times.

Temasek sells stake in Apollo Hospitals for Rs. 134 crores

Singapore government’s investment company Temasek Holdings has sold its entire holding of 5.26% stake in healthcare major Apollo Hospitals Enterprise for Rs. 133.68 crores. The stakes were held by two investment firms Maxwell Mauritius and Aranda Investments.

Maxwell Mauritius sold 2.079 mn shares, while Aranda Investments sold 640,000 shares for Rs. 491.50 each in a bulk deal in the open markets. Aranda Investments’ holding represented a 1.24% stake while that of Maxwell Mauritius represented 4.03% in the Chennai-based healthcare group.

Meanwhile, another fund house Fid Funds Mauritius of Fidelity Investments bought 2.94 mn shares (5.7%) of Apollo for around Rs. 144.62 crores at the same price Temasek’s units sold their stakes. Fidelity Select Portfolios Medical Delivery Portfolio already holds 723,000 shares representing a 1.4% stake in Apollo Hospitals.

Article in Business Standard.

Firstsource Solutions, 24/7 Customer to merge

India’s fifth-largest BPO Firstsource Solutions (formerly ICICI OneSource) and 24/7 Customer, the tenth-largest, are planning to merge themselves in a move which would usher in a whole new era of consolidation in the Indian BPO / ITeS industry.

It is reported that Sequoia Capital is behind this action, which has substantial stakes in both companies. An array of strategic investments has been made in Firstsource by Sequoia, Temasek, Metavante and ICICI. In June 2003, Sequoia had led the $22 mn funding in 24/7 Customer. Firstsource employs over 10,717 people; 24/7 has 5500 people on its rolls.

Read the article in DNA Money.

Temasek to invest $300 mn in TV channel; in talks with US PE funds, Reliance and media professionals

Temasek Holdings, the private equity arm of the Singapore government, is in talks with a clutch of Indian media professionals and business houses to set up a TV broadcasting company. The proposed company could rope in former CEO of Star TV Peter Mukerjea and Mukesh Ambani, the latter through his personal investment companies, as well as some US-based equity funds. The venture will operate news and current affairs as well as entertainment channels. Ambani, Temasek and US investors are to get 26% each and the remaining portion will be divided among Mukerjea and other professionals who join later. The channel would look at an investment of around $300 mn (roughly Rs. 1400 crores) in the next two to three years.

Read the Business Standard article.

Tata Group ups stake in TTML by 3.5%

The Tata Group has raised its stake in Tata Teleservices Maharashtra (TTML), its publicly listed telecom company. TTML provides telecommunication services in the states of Goa and Maharashtra. The group’s holding in the company has now gone up from 65.5% to 69%. Tata Sons has picked up the unsubscribed portion of TTML’s recent rights issue, thereby increasing its stake by 11%, from 7.86% equity to 18.68%. Tata Teleservices, the Tata Group’s flagship telecom company and the single largest shareholder in Tata Teleservices Maharashtra did not subscribe to the rights issue. Consequently its holding has now decreased from 46.98% to 39%. The other group companies including Tata Power, Tata Investment Corporation and Panatone Finvest have maintained their equity stake by subscribing to the rights issue.

Of late, the Tata Group has been quite in news for such corporate moves where it has raised stake in some group companies including Tata Tea and Tata Coffee. The total indirect foreign holding in TTML would also go down as Tata Teleservices, the parent company of TTML, has foreign equity holding from Singapore government’s private equity arm Temasek Holdings. The board of TTML had approved a rights issue of the size of Rs. 491.14 crores on January 12, 2007 through an aggregate of 288.91 mn equity shares at a price of Rs. 17 per share. The date of allotment of the share was January 17, 2007.

Read The Economic Times article.

UTI to divest 36.58% stake in SICOM

The Unit Trust of India has invited bids from financial investors to sell its 36.58% stake in State Industrial Corporation of Maharashtra (SICOM), the investment arm of Maharashtra government. UTI holds 40% stake in SICOM – 36.58% through Specified Undertaking of Unit Trust of India (SU-UTI) and 3.5% is held by UTI Mutual Fund (UTI AMC).

The bids have been invited for the entire 36.58% stake held by SU-UTI. Foreign investors, including International Finance Corporation (IFC), the private sector lending arm of the World Bank Group and DEG, one of the largest European development finance institutions, have approached investment bankers to take stake in SICOM. Standard Chartered Private Equity (SCPE), Lehman Brothers, Singapore’s Temasek Holdings and a couple of hedge funds may also be interested in picking up stake in SICOM (See Related Post).

Apart from UTI’s 40%, the Maharashtra government holds 49% stake in the corporation. The remaining stake is held by other financial institutions and employees.

Read the article in The Economic Times.

IFC, DEG planning to acquire a stake in SICOM

The private equity arm of the World Bank, the International Finance Corporation (IFC), and Germany-based DEG, one of the largest European development finance institutions, are eyeing a stake in the State Industrial Corporation of Maharashtra (SICOM), the investment arm of Maharashtra government. Standard Chartered Private Equity (SCPE), Lehman Brothers, Temasek and a couple of hedge funds may also be interested in picking up stake in SICOM.

Existing shareholder in SICOM, the Specified Undertaking of Unit Trust of India (SU-UTI) is planning to fully divest its 36.5% in SICOM. Both IFC and DEG have approached the investment banker appointed by SU-UTI for the divestment. UTI AMC holds another 3.5% in the corporation.

SICOM offers advisory services to the government of Maharashtra, Maharashtra Electricity Regulatory Commission as well as other corporates. It also gives investment facilitation services to MNCs as well as Indian companies who wish to setup their manufacturing units in Maharashtra. The company is launching a second venture fund and would be soon offering merchant banking, treasury management of state PSUs, real estate development through subsidiary or joint ventures.

Read the article in Business Standard.

Temasek Holdings buys 10% in Tata Sky for Rs. 250 crores; values the DTH provider at Rs. 2500 crores

Singapore-based private fund Temasek Holdings has invested Rs. 250 crores in Tata Sky, the DTH service joint venture between the Tata Group and Star TV, for a 10% stake, belonging to Tata Group holding company Tata Sons. Following this restructuring, Tata Sons’ stake has been reduced to 70%, while Star continues to maintain its 20% holding. This is Temasek’s second investment in the Tata Group of companies. It had earlier acquired about 10% stake in CDMA service provider Tata Teleservices.

In a related development, Sky TV’s competitor, Dish TV is reportedly in talks with Warburg Pincus for diluting a stake to the latter.

Read the article in The Economic Times.

FirstSource acquires US outsourcing company BPM for $30 mn; sells stake to US-based technology firm Metavante and hedge fund Galleon Partners

BPO company FirstSource Solutions, formerly known as ICICI OneSource, has acquired a Delaware-based healthcare claims’ outsourcing company called BPM and its two wholly-owned subsidiaries MedPlans 2000 and MedPlans Partners for an estimated $30 mn. This is FirstSource’s second US acquisition after it had acquired Account Solutions Group In September 2004.

The acquisition will allow FirstSource to penetrate the healthcare vertical with capabilities in complex claims’ adjudication. FirstSource will now offer clients database management, policy administration, claims processing and complex claims adjudication capabilities.

The company, by virtue of this acquisition, has also acquired a client portfolio that includes six Fortune 1000 companies and adds three centres in Rockford, Illinois; Fort Scott, Kansas and Louisville, Kentucky to its current 17 delivery centres globally which includes 11 in India, 3 in the US, 2 in the UK and 1 in Argentina. The company has a workforce of 9,018 full-time employees and 61 clients as of September 30, 2006. With this acquisition, the US headcount of FirstSource Solutions has risen to 800.

Read The Economic Times and Business Standard articles.

In a related development, the ICICI Group has divested around 19% stake in FirstSource to US-based banking technology solution provider Metavante and US hedge fund Galleon Partners in a pre-IPO placement. Metavante already holds an 11% stake in Firstsource which it had acquired in April last year through a combination of primary infusion and secondary purchase. The deal has been reported at $$75-80 mn; the ICICI spokesperson has confirmed the deal but declined to comment on its size.

Along with group companies ICICI Bank and ICICI Ventures, Sequoia Capital and Temasek Holdings also holds stake in FirstSource. Sequoia Capital has invested $17 mn in FirstSource for 11% stake and hopes to make $60 mn on its initial investment in the company’s upcoming IPO. Temasek Holdings has invested $50 mn for picking 11-12% stake in the company.

Metavante has picked up a 14% additional stake in the company, taking its total shareholding in the company to 25%. Galleon Partners has acquired 5.84%. FirstSource is planning a public issue of 95.6 mn equity shares, including a fresh issue of 60 mn equity shares and 35.6 mn equity shares, to be offered for sale by the ICICI Group.

Read The Economic Times article.

Reliance India Power Fund buys 15% in KRYFS Power Component

Reliance India Power Fund has acquired a 15% stake in KRYFS Power Component for an undisclosed sum. Reliance India Power Fund is a 50:50 JV between the Reliance-ADAG financial services subsidiary Reliance Capital and Singapore-based private equity firm Temasek Holdings. The corpus of the fund is $200 mn and has been set up to invest in Indian power ancillary companies. Su-Kam Power Systems, EMI Transmission, and Ravin Cables are some of its investee companies.

The fund invested Rs. 45 crores in Delhi-based Su-Kam Power Systems for a 20% stake and Rs. 50 crores in Mumbai-based EMI Transmission, an unlisted power equipment company, for a 23% stake.

KRYFS Power Component is a Rs. 300-crore manufacturer of transformer cores and patented sling-set twin path slings. It will utilize the funds for capacity expansion and diversifying into newer businesses through organic and inorganic means. The company manufactures high-tenacity fiber slings in collaboration with Slingmax, Inc. of USA and currently has a capacity to produce nearly 12,000 mt of transformer cores, wound cores and built up cores.

Read The Economic Times article for more details.