Corporate News | Sugar ouput may beatdemand, export likely

Corporate News | Sugar ouput may beatdemand, export likely

Mumbai: Sugar mills in India, the world’s biggest buyer, may produce raw sugar for export as output is likely to be more than demand for the first time in three years, a producers’ group said.

Mills may convert 10-20% of their cane to raw sugar in the year starting 1 October, Prakash Naiknavare, managing director of the Maharashtra State Cooperative Sugar Factories Federation Ltd, said on Wednesday. The group accounts for almost 40% of the nation’s sugar production.



PTC Financial Services plans share sale

New Delhi: PTC India Financial Services Ltd (PFS), a company backed by Goldman Sachs Group Inc. and Macquarie Group Ltd, is planning a share sale to tap growing investor interest in the South Asian nation’s power projects, the chairman said.

PFS, which invests in electricity generation plants and assets, needs to raise as much as Rs1,000 crore and may make an initial public offering by the end of September, said Tantra Narayan Thakur, who is also chairman of parent company PTC India Ltd.



Arcil raising funds, expecting NPAs to rise

Mumbai: Mumbai-based Asset Reconstruction Co. (India) Ltd, or Arcil, which buys bad loans from banks and makes money recovering them, is raising Rs2,000 crore from domestic and foreign investors.

The company will use the money to buy bad assets from banks and sell them at a higher value, managing director and chief executive officer S. Khasnobis said on Wednesday.

“It is a multi-close fund and we have already raised Rs400 crore," Khasnobis said. Money for multi-close funds is raised in several stages.

Companies like Arcil have been hit by the decline in bad loans from the corporate sector since last year, following a Reserve Bank of India (RBI) move to let banks restructure loans, giving companies either lower interest rates or more time to repay them.

However, asset reconstruction companies expect bad loans to increase.

Credit rating agency Fitch Ratings Indiaexpects gross non-performing loans (NPLs) in the Indian banking system to increase to 3.2% to 3.5% by March 2011, up from 2.5% in March 2010.

Ananda Bhoumik, senior director at Fitch, expects gross non-performing assets (NPAs) to touch Rs1.36 trillion in March 2011. Total outstanding loans in India were at least Rs35 trillion at the end of March 2010.

“Globally one percent of loans become NPAs," said P.H. Ravikumar, managing director and chief executive of Invent Assets Securitisation and Reconstruction Pvt Ltd.

(PTI contributed to this story)

Joel Rebello


SCI plans to increase its capital base to Rs1,000 cr

Bangalore: State-owned Shipping Corp. of India Ltd(SCI) is looking to more than double its capital base, an indication that a share sale in India’s biggest ocean carrier may be around the corner.

The board of directors will meet on 29 May to consider, among other items, a proposal to increase the authorized share capital of the company, SCI said in a filing to the Bombay Stock Exchange, without giving details.

A senior executive at the company said that the move to increase the base to Rs1,000 crore is aimed at part-financing capital expansion plans. He did not want to be named ahead of the Saturday board meeting.

A spokesman for SCI declined to comment.

The company’s paid-up share capital is Rs423.45 crore.

The fresh share issue will piggyback on a secondary sale of shares by the government. The government is looking to sell 10% of its stake in SCI (it has an 80.12% stake in the firm), as part of a plan to raise Rs40,000 crore this fiscal through share sales in state-run firms.

Proceeds from the fresh share issue will go to the company, while those from a secondary share sale will go to the government.

In March, the company won approval from shareholders to raise the board’s borrowing powers to Rs12,000 crore from the earlier Rs5,000 crore to part-fund its ship acquisition plan.

SCI plans to buy 40 ships worth close to $2.6 billion (around Rs12,400 crore) over the next four years to replace older vessels and boost capacity. It owns and operates a fleet of 77 ships of different types and capacities, accounting for around 33% of the total capacity owned by Indian fleet owners.

P. Manoj