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The Week in Review for 08 April 2011

The Week in Review for 08 April 2011
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First Published: Fri, Apr 08 2011. 10 39 PM IST
Updated: Fri, Apr 08 2011. 10 39 PM IST
It’s been an eventful week for Cairn and Vedanta, with their proposed deal going one step forward, one step backward, and one step sideways. On Thursday the two firms were forced to extend their deadline for the acquisition. They’ve pushed the last date to 20 May from the previous 15 April.
The postponement came a day after the Union cabinet decided to refer the Cairn-Vedanta deal to a group of ministers for approval led by Pranab Mukherjee. The agreement involves Vedanta buying 51-60% of Cairn India. Opposition to the deal comes from state-run ONGC, which owns 30% of Cairn India’s most lucrative oil block and doesn’t want to pay royalties for the entire field.
Meanwhile, at least one part of the Vedanta acquisition is a step closer to reality. On Tuesday, market regulator Sebi gave it the go-ahead to make an open offer for up to 20% of Cairn India. The offer will happen through Vedanta’s group company Sesa Goa, which plans to start the process on 11 April.
Also in natural resources, a new Supreme Court decision has provided relief for some of India’s mining companies. On Tuesday the court ordered Karnataka’s ban on iron ore exports be removed. The ban has to end by 20 April. Karntaka prohibited iron ore exports in July 2010. It’s move reduced India’s exports of the material by a fifth.
Private airlines have taken their concerns about new ground handling rules to the Supreme Court. On Monday they appealed against the government’s decision to restrict ground operations to firms dedicated to that business. The Court in turn issued notices to all the parties involved. It will hear the case on 25 April. Back in 2007, the civil aviation ministry had proposed ground handling at six major airports be hived off to separate companies. Airlines opposed the move because they usually take care of baggage and other ground operations themselves. They went to the Supreme Court after the Delhi high court ruled in the government’s favour.
BPO firms Genpact and Headstrong have struck a deal that could shakeup their industry. Genpact has agreed to buy Headstrong for $550 millions. Genpact will complete the purchase with its own financial resources. The two sides will close the deal by 31 May. Genpact was originally a part of GE Capital in India, and former parent company GE still accounts for nearly 40% of its revenues. The company is hoping its acquisition of Headstrong will widen its customer base. Many of Headstrong’s clients come from the financial services industry.
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First Published: Fri, Apr 08 2011. 10 39 PM IST