The Week in Review for 9 April 2010

The Week in Review for 9 April 2010

Big changes at the top at financial services firm Religare. On Tuesday the company’s chairman, Malvinder Mohan Singh announced his resignation. He was joined by his brother Shivinder, who announced he was resigning from his position as director of Religare. Together, the two brothers still hold a majority stake Religare.

The Singh brothers now plan to focus on their other business interest: healthcare. Their hospital chain, Fortis has been expanding for some time now. Last month, it said it would buy a nearly 24% stake in Singaporean healthcare company Parkway. And in 2009, it bought ten hospitals from Wockhardt.

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The Essar Group plans a stake sale to fund its expansion plans. The company says it will raise $2.5 billion by selling shares in its energy business to institutional investors. The shares will come from Essar Energy and will be listed on the London Stock Exchange. Proceeds from the sale will help Essar buy coal mines and develop more oil and gas blocks.

Essar is not the only company looking to raise money. Government-run steel firm SAIL is now closer to its follow-on public offer. On Thursday, the union cabinet approved a stake sale in the company that will have two components. One will see the government divest a part of its holdings for an estimated Rs8,000 crore. The second will involve SAIL selling fresh equity to the extent of 10% of its current holding. That’s expected to bring in another Rs8,000 crore. SAIL’s public offer will take place in two tranches. Each tranche will include both the components.

Renault and Nissan are hoping to rake in greater profits from a new alliance. On Wednesday the two companies announced a new partnership with German carmaker Daimler. Together, the three firms plan to develop a range of small cars and share engine technology. Carlos Ghosn, the chief executive of Renault and Nissan told reporters the alliance would be lucrative. He expects it to bring in €2 billion euros in additional profits over the next five years.

The three companies plan to seal their alliance through a cross-holding of shares. Renault and Nissan will get a total 3.1% stake in Daimler. Daimler will in turn pick up stakes of 3.1% in each company. Renault and Nissan already hold large portions of each other’s shares ever since their alliance more than a decade ago.

The UB Group was in high spirits. At a press conference in Bangalore, the group’s chairman Vijay Mallya announced his liquor company United Spirits had become the second largest in the world. Mallya said United Spirits sold a hundred million cases annually, leaving behind competitors like French firm Pernod Ricard. Diageo remains the world’s biggest seller of alcoholic drinks.

Real estate firm Emaar MGF says half the money it raises from its upcoming IPO will be used to service debt. Emaar MGF currently has a debt of Rs5,000 crore that’s due over the next two years. The company expects to raise about Rs3,500 crore from its IPO.

India’s services industry grew at a slower pace in March. The Business Activity Index for the month stood at 58.1. That’s a slight fall from February’s high of 60.9.

Food prices shot up for a second straight week. The food price index increased 17.7% in the year to 27 March. The previous week, the index rose just 16.35%.

Katherine Bigelow’s Oscar-winning movie The Hurt Locker exploded on Indian screens Friday. The movie tells the story of an American bomb squad in Iraq’s mean streets during the early years of the war. Last month it beat stiff competition from James Cameron’s Avatar to win the Academy Award for Best Picture.