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FIPB clears Tata plan to exit from three joint ventures

The Foreign Investment Promotion Board or FIPB today permitted the Tata group to divest its entire shareholding in three joint venture companies -- Tata-IBM, IBM Global Services and Utkal Alumina International.

These formed part of the 34 proposals approved by the board today amounting to a total foreign direct investment inflow of over Rs 4 billion, FIPB sources said here.

With these approvals in place, IBM would be converting its 50-50 joint venture -- Tata-IBM -- into a wholly-owned subsidiary by bringing in Rs 465 million. An additional Rs 1.65 billion would be infused into the subsidiary as fresh equity.

Besides, Tata is selling off its entire ten per cent shareholding in IBM Global Services to IBM for Rs 275 million. IBM presently holds 80 per cent stake in the venture while the remaining ten per cent stake is with Tata-IBM. Effectively, this venture would also become a wholly-owned subsidiary of IBM.

Alkan has been given the nod to purchase Tata group's 20 per cent stake in Utkal Alumina for Rs 445 million. Alkan's stake would therefore go up from 60 per cent to 80 per cent. Indal controls the remaining 20 per cent stake in the venture.

The sources further pointed out that electronics and software accounted for the majority of proposals approved by the board at its hearing today amounting to an FDI inflow of over Rs 2 billion. Chemicals and fertilisers followed with Rs 600 million, telecom with Rs 500 million and mining with Rs 50 million.

Ooms Azenhorn Holding of the Netherlands has been given the green signal to set up a 100 per cent owned subsidiary in the country by bringing in Rs 559 million for manufacturing and marketing of polymer modified bituminous products.

Zurich Insurance has been allowed to set up a wholly-owned trustee company to manage its asset management company. The company would be investing Rs 21 million for the same.

The FIPB also permitted Boart Longyear International to set up a wholly-owned subsidiary for manufacturing and marketing of mining and other equipment. The equipment under the venture, to be formed with an investment of Rs 30 million, would be partly imported and partly sourced locally.

A proposal by Givo Limited seeking to hike non resident Indian equity in the garment manufacturing company from 15.9 per cent to 22.9 per cent was also shown the green flag. The stake hike would be effected by an infusion of Rs 40 million.

In the electronics sector, four new companies were allowed to set up subsidiaries here for producing computer software. These included Eastern Software which would bring in Rs 25 million, Soltecone (Rs 10 million), Boscallco (Rs 20 million) and Silicon Automation Systems (Rs 45 million).

Kanoria Securities and Financial Services Limited has been allowed to set up a venture with 50 per cent foreign equity worth Rs 40 million for providing technical services in the power sector. Exergy Inc of the US, the foreign partner in the venture, would bring in Kalina cycle technology for waste paper power plants.

In the steel sector, Horst Baermann of Germany would set up a 100 per cent subsidiary for manufacturing a speciality item known as flexible extrudent polymer bonded magnets. The FDI involved in the venture amounts to Rs 20 million.

Zip Telecom has been allowed to provide management and technical services to the telecom sector through a wholly-owned company while Planet Asia Company Limited and Siga Input Output Technologies Limited would be providing Internet services through their respective ventures.

MGE UPS Systems of France has been granted permission to manufacture and market uninterrupted power supply systems through a 100 per cent subsidiary to be set up with an investment of Rs 150 million.

Kodak Polychrome Graphics of the US will set up a wholly-owned company with an infusion of Rs 650 million for producing graphic art films and painting plates.

DAE Myung Systems, South Korea, has been allowed to set up a venture for fabrication of metal products with an investment of Rs 2.7 million.

The board also cleared procedural amendment proposals of Daewoo Anchor, Bina Power, General Utilities, Microwave Communications and Bharti Cellular while decision on the proposal by Nocil was deferred.

UNI

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