JK Group to buy Kesoram’s Haridwar tyre unit for Rs 2,200 crore

JK Group will acquire BK
Birla flagship firm Kesoram Industries’
tyre manufacturing plant at Haridwar for
up to Rs 2,200 crore.
JK Tyre and JK Asia Pacific Singapore Pte
Ltd , a wholly- owned subsidiary of the
company, have signed a binding term
sheet with Kesoram Industries Ltd (KIL) to
acquire 100 per cent equity in Cavendish
Industries Ltd (CIL), JK Tyre said in a
statement.
CIL houses a tyre business undertaking
located at Haridwar (Laksar) which
manufactures a range of tyres, tubes and
flaps.
“JK Group has agreed for this acquisition
at an enterprise value not exceeding Rs
2,200 crore, subject to conditions,
wherein JK Tyre will hold the largest
shareholding block and shall have
substantial management control of CIL
with an option to place up to 55 per cent
with its associates/group companies,” the
tyre maker said.
In a separate statement Kesoram
Industries said that it will divest its
subsidiary Cavendish Industries Limited
where it holds 99 per cent shareholding.
The company added the deal would
strengthen the balance sheet of the
company and it also remained committed
to tyre business.
For JK Tyre, the acquisition will provide
further impetus towards ready expansion
in the truck and bus radials segment as
well as its entry into the fast growing two-
and three- wheeler tyre market.
“The transaction is a reflection of the
inherent strength of the company in
undertaking acquisitions with turnaround
potential and successfully delivering
results to all the stakeholders in the
business,” JK Tyre Chairman Raghupati
Singhania said.
The acquisition is proposed to be funded
by a combination of debt and internal
accruals raised by JK Tyre and its other
group entities.
“The financial exposure of JK Tyre in the
acquisition is expected to be of the order
of Rs 450 crore. The final transaction is
expected to consummate over next few
months (subject to various approvals)
with definitive documentation expected to
be executed between the parties in due
course of time,” it added.
JK Group, is one of the leading
conglomerates in India with business
interests in automotive tyres, cement,
paper, auto-components and other
businesses.
The group’s flagship firm, JK Tyre is
among the top three automotive tyre
manufacturers in India with presence in
truck, bus, passenger cars and other
vehicles, having nine manufacturing
plants all over the world.
In 2008, JK Tyre and Industries had
acquired Mexican tyre company Tornel for
Rs 270 crore.

Oil and Natural Gas Corp ( ONGC ) has bought a 15 per cent stake in Russia’s second- largest oil field from Rosneft for about $1.35 billion

State-owned Oil and Natural Gas Corp
( ONGC ) has bought a 15 per cent stake in
Russia’s second- largest oil field from
Rosneft for about $1.35 billion.
ONGC Videsh Ltd, the overseas
investment arm of the state explorer,
signed agreements in Moscow to buy 15
per cent stake in the Vankor oil field in
East Siberia, sources said.
The 15 per cent stake will give OVL about
3.5 million metric tonnes of oil a year.
Under the terms of the agreement, OVL
will get two seats on the Board of
Directors of Vankorneft – a Rosneft
subsidiary that operates the Vankor field.
Rosneft will retain full control of
infrastructure of the Vankor cluster, they
said.
Vankor, which started production in 2009,
holds recoverable reserves of about 500
million tonnes.
OVL already has a 20 per cent stake in
the Sakhalin-1 oil and gas field off
Russia’s far eastern coast and owns
Imperial Energy which has fields in
Siberia.

Future Group sells 8.7% stake in Pantaloon Fashion Retail

Future Group has sold over half of its
remaining stake in Pantaloon Fashion &
Retail Ltd through a secondary market
transaction on Thursday for Rs 134 crore
($21 million). Stock exchange data shows
the shares were acquired by a couple of
mutual funds.
Three years ago Future Group had spun
out its apparel retail business from its
flagship company Pantaloon Retail (now
Future Retail) as a separate listed firm
and sold a majority stake in the venture to
Aditya Birla Nuvo, one of the largest
branded fashion apparel players in the
country.
Pantaloons format business had 65 stores
and 21 factory outlets across 35 cities
covering total retail space of over 2
million sqft. The firm Pantaloon Fashion &
Retail, now majority owned by Aditya Birla
Group, is now among the top three large
format fashion stores in the country and
the top player in the women’s wear
segment. It has scaled up its presence
and as of March 22015 had 104 stores
and 30 factory outlets in 49 cities.
As of March 31, 2015, Future Group held
a little over 17 per cent stake in
Pantaloon Fashion & Retail and has sold
over half of this on Thursday.
This comes at a time when the Aditya
Birla Group is consolidating its branded
apparel business under Pantaloons
Fashion & Retail which would then be
renamed as Aditya Birla Fashion & Retail,
creating India’s top branded clothing
company by revenues and number of
sales outlets.
Currently, the business is housed under
separate subsidiaries and business units
of Aditya Birla Nuvo Ltd, a diversified
public listed firm of the group.
This is spread across branded apparel
with the group’s own brands such as
Louis Philippe, Van Heusen, Peter England
and Allen Solly (housed under Madura
Fashion, a unit of ABNL); luxury branded
apparel with international labels and retail
outlets for Madura Fashion brands (part
of Madura Lifestyle, a part of Madura
Garments Lifestyle Retail Co Ltd, which is
a subsidiary of ABNL) and a lifestyle
department chain focused on apparel
(Pantaloons Fashion and Retail, acquired
from Future Group).
As part of the corporate rejig, it will bring
all of this under Pantaloons Fashion and
Retail. Madura Fashion and Madura
Lifestyle together generated sales of Rs
3,645 crore with EBITDA of Rs 443 crore,
while Pantaloons Fashion clocked
revenues of Rs 1,801 crore with EBITDA
of RS 62 crore for the 12 months ended
December 31, 2014.
Madura Fashion and Madura Lifestyle
have 1,735 exclusive outlets and over
6,000 additional points of sale as on
March 31, 2015. Madura Fashion is the
top menswear company in the country
with Louis Philippe and Van Heusen as
the two top selling brands in their
category. Madura Lifestyle sells
international labels under The Collective
and Madura Fashion brands under the
retail format Planet Fashion.

UK’s Hardy Oil & Gas in talks to buy outentire RIL stake in GS-1 block

RIL wants to exit Gujarat-Saurashtraoffshore basin block (GS-01) as it feelsthat reserves discovered so far are noteconomically significant.
NEW DELHI: UK’s Hardy Oil & Gas plc is in talks to acquire Reliance Industries’entire 90 per cent stake in a gas discovery block off the Gujarat coast.RIL wants to exit Gujarat-Saurashtra offshore basin block (GS-01) as it feelsthat reserves discovered so far are noteconomically significant.
“Hardy continued discussions with theoperator to acquire their 90 per cent interest and operatorship. General commercial terms have been agreed and a draft farmout agreement is under review by both parties,” the UK firm said announcing operational and financial review of 2014-15 fiscal.It said the agreement for transfer of interest and operatorship will be subject
to approval of the Government.Hardy currently owns 10 per cent interestin the block where a gas discovery,
named Dhirubhai-33, was made in 2007.
The well that discovered the reserves
flowed 18.6 million standard cubic feet
per day of gas and 415 barrels of
condensate during tests.
The GS-01 licence is located in the
Gujarat-Saurashtra offshore basin off the
west coast of India, northwest of the
prolific Bombay High oil field, with water
depths varying between 80 meters and
150 meters. The retained discovery area
covers 600 square kilometers.
Hardy said a field development plan (FDP)
for Dhirubhai 33 natural gas discovery
was submitted to the government for
review and approval in 2012.
A discovery was declared commercially
viable in 2011. The development plan
provides for several dry tree wells, an
unmanned platform, multiphase pipeline
to shore and onshore processing and
export facilities, it said.
“A draft farmout agreement is under
review by both parties and the final
outcome of these negotiations will be
known in the near term,” Hardy said.
It said timely resolution of liquidated
damages for unfinished minimum work
programme (or minimum work
committted) could accelerate conclusion
of the acquisition process.
“Following this, a priority will be to secure
government approval of the FDP and
initiate planning for development,” Hardy
said.
It along with Reliance have relinquished
block KG-DWN-2003/1 (KG-D3) due to
access restrictions imposed by the
government.
“On 23 December 2014, the D3
Management Committee considered a
proposal from RIL, the operator of the D3
block, in which Hardy holds a 10 per cent
interest, for the relinquishment of the
block,” the statement said.
RIL was of the opinion that the previously
announced access restrictions imposed
by the Ministry of Defence rule out any
further exploration/development activities
in the impact zone area and inhibited it
from undertaking any further work and
investment in the unrestricted area of the
Block due to the anticipated increase in
cost and risk.
D3 has similar participating interests as
GS-01. Four gas discoveries — Dhirubhai
39, 41, 44 and 52 (KGV-D3-A1, B1, R1
and W1), have so far been make in the
block.