Milan: Italy’s biggest carmaker Fiat SpA will close four of its six auto plants in the country for three weeks between September and November because of slumping sales.
The closures will affect factories in Mirafiori, Termini Imerese, Pomigliano and Melfi, a company official said on Tuesday. The sites employ a total of 22,000 people, or about three-quarters of Fiat Auto’s Italian workforce.
Sales in Europe’s second biggest car market fell 19.5% in June, a sixth straight monthly decline, as record oil prices and a slowing economy put consumers off buying. Registrations at Turin-based Fiat declined 16.5% to 60,220 vehicles.
“The production cutbacks show the slowdown is going to have a strong impact on earnings,” said Karim Bertoni, who helps manage $24.8 billion (Rs1.08 trillion) at Banque Syz and Co. in Geneva.
S&P reiterates credit watch on Tata Motors
New Delhi: Standard and Poor’s Ratings Service said it was leaving the “credit watch” on Tata Motors Ltd unchanged as it waits for India’s largest auto maker to finalize its plans for funding the purchase of British brands Jaguar and Land Rover.
The credit rating agency had lowered the rating on Tata Motors three months ago after the company announced that it was paying $2.3 billion (Rs9,982 crore) for buying the luxury vehicle makers, and raised $3 billion in short-term bridge loans. Tata Motor’s rating stands on BB+ with negative implications.
Malaysia Airlines cuts 15 loss-making routes
Kuala lumpur: Malaysia Airlines has axed 15 loss-making routes, mostly to China and India, as it streamlines operations to survive high fuel prices, the official news agency ‘Bernama’ said on Tuesday.
Transport minister Ong Tee Keat said the carrier would cease operations between the Malaysian capital Kuala Lumpur and Manchester, Vienna, Zurich, Fukuoka, Nagoya, Ahmedabad, Kolkata, Pontianak, Xian, Chengdu and Cairo.
Flights to Perth and Sydney from the Borneo island city of Kuching, and the Langkawi-London and Penang-London routes will also be closed in stages, Ong told parliament.
Uco Bank to raise Rs825 cr, hike rates
New Delhi: State-run Uco Bank on Tuesday said it would raise about Rs825 crore from the market during the year to fund its business growth.
“We are looking to raise Rs325 crore through preferential non-convertible bonds during the second quarter of this fiscal and about Rs500 crore from follow-on public offer in the third quarter,” Uco Bank chairman and managing director S.K. Goel said.
The capital raised during the year will help the bank to register a growth of 25% in advances in the next two year, he said. Besides, the bank is planning to increase both lending and short-term deposit rates by up to 50 basis points in the next few days. The decision about the rate hike is likely to be taken next week.
Banks must follow SME credit guidelines: Thorat
Mumbai: Banks need to fine-tune their lending processes to small and medium enterprises (SMEs) and follow the Reserve Bank of India (RBI) guidelines on the subject, a top RBI official said.
Despite these guidelines being in place, many banks were observed to have not been following them, RBI deputy governor Usha Thorat said at a seminar organized by the Indian Banks Association here on Tuesday.
Giving an example, Thorat said that as per the RBI guidelines, banks were not supposed to insist on collateral security from SMEs for advances to them up to a limit of Rs5 lakh but only take into account the viability of their projects while granting loans.
However, banks were not adhering to this guideline and were asking for collateral security, Thorat said.
Deutsche Bank appoints Soni as CEO of DeAM
Mumbai: The Deutsche Bank group said on Tuesday it has appointed Suresh Soni as chief executive officer for Deutsche Asset Management (DeAM India). He assumes the responsibility in addition to his current role as chief investment officer for Asset Management, India, a release said here.
Soni would also become a member of the Deutsche Bank India Senior Management Executive Committee.
DeAM established its business in India in 2002.
Bankers meet RBI prior to policy review
Mumbai: Ahead of the central bank’s quarterly review of its monetary policy scheduled later this month, top bankers on Tuesday met a Reserve Bank apex body to discuss the present macroeconomic situations.
The bankers who attended the meeting are State Bank of India chairman O.P. Bhatt, Punjab National Bank CMD K.C. Chakrabarty, Bank of Baroda CMD M.D. Mallya, Bank of India CMD T.S. Narayanaswami and HDFC Bank Ltd’s managing director Aditya Puri. RBI deputy governors Rakesh Mohan, P. Leeladhar and Shyamala Gopinath represented the apex bank at the meeting. Indian Banks Association chief executive H.N. Sinor, who was also present, said the meeting was a pre-monetary policy consultation between the bankers and RBI, and was largely limited to discussions on various industry aspects.
Area under sugar cane may fall on weak prices
New Delhi: Farmers in India, the world’s second biggest sugar maker after Brazil, may plant fewer acres to the crop this year because of a drop in sweetener prices, agriculture secretary P.K. Mishra said. “Farmers will look at market situation and profitability” before planting the crop, he said on Tuesday.
Sugar cane was planted on 4.3 million ha as on 4 July, down from 5.2 million ha a year ago, the agriculture ministry said last week. Bloomberg
Braun earmarks €16 mn for India operations
New Delhi: Germany-based medical device manufacturer B. Braun Melsungen AG has earmarked Rs110 crore (€16 million) budget for expanding its operations in India and is targeting a revenue of around Rs250 crore by 2010.
“We have invested €8 million (Rs 55 crore) for setting up a manufacturing plant in Chennai and will pump in another eight million euros in expanding its capacity in the next two years,” B.Braun, vascular system, senior vice-president Gerd Wacker said.
The company has formed a subsidiary, B.Braun Medical India Pvt. Ltd, to look after its business in India.
It has got the approval of Drug Controller General of India (DCGI) for introducing around 12 medical devices across different therapeutic areas and is also waiting for DCGI nod to introduce another five products in the country.
“In 2008, we are expecting a revenue of Rs 160 crore and by 2010, when all our projects would start contributing to our revenues, it should cross Rs250 crore,” B.Braun Medical India Business unit manager, vascular system, Indranil Mukherji said.
CCI selection panel to meet later this month
New Delhi: After getting an overwhelming response for top positions in the Competition Commission of India (CCI), the high-powered selection committee has decided to meet later in the month to fix the criteria for shortlisting applications.
The committee, headed by Supreme Court judge Altamas Kabir, would meet in the last week of July to decide the modalities for shortlisting. It has received around 200 applications for the posts of chairman and five members in CCI. The committee would recommend names to ministry of corporate affairs, the nodal ministry of CCI.
According to reports, those who are eyeing top slot in CCI include chief economic adviser, ministry of finance, Arvind Virmani, Planning Commission adviser (infrastructure) Gajendra Haldea, World Bank executive director Dhanendra Kumar and director general, CUTS Institute for Regulation and Competition Pradeep S. Mehta.
Reliance, Petroperu plan JV for exploration
Lima:Reliance Industries Ltd plans to sign an agreement to jointly explore for oil and natural gas with Peru’s state oil company, a government official said.
Reliance and Petroleos del Peru SA, known as Petroperu, may also take part in Peru’s 22-block bidding round in September, Petroperu chief executive officer Cesar Gutierrez said.
“We will formalize accords made in recent weeks,” Gutierrez told reporters in Lima. “Reliance has a dynamic expansion plan in Peru as it sees major potential in our oil basins.”
Mumbai-based Reliance, which bought stakes in three Peruvian oil blocks this year, plans to invest $24 billion (Rs1.04 trillion) in chemical projects and oil and gas exploration worldwide to benefit from record energy prices.
Crude set to correct from Q3: Edelweiss
New Delhi: The spectacular rally in crude oil prices may correct in the third quarter of 2008 calender year with improvement in supplies, global research firm Edelweiss said in its latest report.
“The sharp run-up in crude prices (51% in 2008) has largely been a result of supply tightness, as measured by available Opec (Organization of Petroleum Exporting Countries) spare capacity, which fell from 3 million barrels per day in March 2007 to 2.0 mbpd in May 2008,” the 7 July report said.
Project delays and field shutdowns (planned and unplanned) were responsible for the decline in non-Opec supplies. Geopolitical tensions, a weaker dollar, and futures interest have amplified the impact of lower spare capacity.
“We expect supply tightness to ease from third quarter of 2008 calendar year, eventually taking crude prices lower. Opec spare capacity is expected to increase from 2.9 mbpd in second quarter to 3.8 mbpd in fourth quarter, and 4.6 mbpd in 2009.
Better supply outlook arises from the start of new and previously delayed projects in Russia, Brazil, Canada, Gulf of Mexico, Saudi Arabia, Nigeria, the UAE, and Iraq. Start-up of earlier shutdown fields also improves supply-side outlook.
Moody’s Agarwal to head US co’s India unit
Mumbai: US research firm Morningstar Inc. has hired a top official at Moody’s fund tracking associate in Mumbai to head its Indian operations, a senior executive said on Tuesday.
Aditya Agarwal, joint managing director at fund tracker Icra Online Ltd, will join as managing director and head of Indian markets on 1 August, Jaideep Vivekanand, director of business development for India at Morningstar Asia Ltd, said in an email.