The oil ministry has ordered state-run Oil & Natural Gas Corporation (ONGC) to scrap its move to farm out stakes in four coal bed methane blocks to private energy firms without competitive bids, and asked it to invite global bids. The ministry has intervened as ONGC was about to award stakes in four CBM blocks to private firms it had chosen without an open tender, ignoring views of the government nominees on its board. ONGC must observe CVC norms as it a public sector company and the government has every right to overrule its decision as it is the majority owner. Initially ONGC had decided to farm-out 35% stake in each block to a prospective private firm but midway it negotiated with suitors and decided to sell stakes to more than one partner in each block.
Reliance Industries (RIL) and oil major BP's plan to take a stake in a new gas import terminal of Petronet LNG have been grounded under pressure from the oil ministry, which has had a strained relationship with RIL since last year. Reliance and BP, which are partners in oil and gas blocks in India and have set up a joint venture for gas marketing and infrastructure, had been negotiating with Petronet for a stake in the upcoming LNG terminal in the Gangavaram port in Andhra Pradesh. The oil ministry has taken a stern approach towards Reliance after the sharp fall in natural gas output from the KG-D6 field, which was once feted as the game-changing discovery that would double India's gas production.
The Coal India (CIL) board is scheduled to meet on August 7 to finalise new fuel supply agreement (FSA) to be made with the power firms. The penalty issue, which remained inconclusive in July 31 meeting will also be discussed and accordingly new FSA will be made. The development comes in the wake of power firms including NTPC refusing to enter into pacts with CIL dismissing its FSA over low penalty clause for the coal major in case of its not meeting the committed supply. CIL board on July 31 reached a consensus on supplying a minimum of 80 percent of the contracted quantity of the fuel to power firms, meeting 15 percent through imports.
Legacy Iron, the Australian arm of NMDC, has finalised the purchase of two of six highly prospective tenements in Queensland where there are strong indications of quality coking and thermal coal mineralisation. It is the first corporate transaction undertaken by Legacy since India's largest iron ore producer NMDC acquired a 50 percent stake in the company in December 2011. Recently, the company was likely to increase prices of lumps and fines by 8-10% for the July-September quarter, despite global iron ore prices remaining stable in the last few weeks. It had more scope now to shield its prices from global trends, as its new pricing mechanism is based on domestic demand-supply dynamics instead of the earlier export parity formula.
Nestle India is offering aggressive discounts and incentives to retailers on its flagship Maggi instant noodles, perhaps for the first time in a decade, in a bid to protect its market share against increasing competition. Maggi, which has dominated the instant noodles market for nearly three decades, is now being challenged by aggressive new entrants such as ITC's Sunfeast Yippee, GlaxoSmithKline's Horlicks Foodles and Hindustan Unilever's Knorr Soupy Noodles. Nestle's domestic sales grew 13.7% in the April-June quarter, down from 21% in the same quarter last year, and lower than other consumer goods makers like HUL, Colgate and Dabur, which, on average, reported 20% increase in first quarter sales.
Century Textiles & Industries is betting big on its cement vertical by going ahead with its capacity expansion of 4.3 million tonne at an investment of Rs 2,408 crore. The company is in line with its expansion plan in the cement vertical. The company's capacity expansion is for 4.3 million tonne taking the total capacity to 12.8 million tonne at an investment of Rs 2,408 crore. The company expects the cement demand to grow by 8-9 percent this fiscal from 6.5 percent last year. Century posted 89.92 percent fall in net profit for quarter ended June 30, at Rs 2.41 crore compared to Rs 23.90 crore for the same quarter in the previous year.
Dhunseri Petrochem & Tea would commission the PET resin project in Eygpt by March 2013. The first plant would be commissioned in March and the second in June. The Egyptian project would have two plants, each having a production capacity of 2.15 lakh tonnes per annum. With this, the turnover of the company is expected to triple to touch Rs 6,000 crore by 2013-14 fiscal. The company has reported a net loss of Rs 6.73 crore for the quarter under review as compared to a net profit of Rs 16.29 crore for the same quarter in the previous year. The total income from operation of the company has declined marginally at Rs 487.06 crore for Q1FY13 as compared Rs 487.11 crore for the corresponding quarter previous year.
Jet Airways is venturing into the loyalty management business. It also plans to set up an academy to train cabin crew. The airline's gross revenue for 2011-12 rose 17 percent to Rs 15,173 crore. However, it recorded a Rs 1,236-crore loss due to the tough operating environment. The airline has sought shareholders' approval to set up a marketing services company to manage the airlines and its shareholders' loyalty programmes and set up a training school for cabin crew. Currently, Jet Airways manages its JetPrivilege frequent flier programme in-house. It also has several tie-ups with hotels, retail and lifestyle brands.
JSPL Mauritius, a subsidiary of Delhi based Jindal Steel & Power (JSPL), has raised about $150 million (about Rs 835 crore) through an external commercial borrowing (ECB) programme to repay loans taken from the Indian parent. The company has raised a five-year loan from a consortium of banks comprising Standard Chartered Bank, ANZ Bank and Bank of Tokyo-Mitsubishi at a cost of 300 basis points over the Libor. The move is expected to be in line with Jindal Steel's plan to ring-fence the parent company from fluctuations witnessed in its overseas projects, mostly in mining and exploration, where the completion of the projects hinges on regulatory approvals and remains uncertain.