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| INDUSTRY Bajaj sales slide, M&M fails to impress INTERVIEWS/FEATURES GM India finds the going tough Normal operations for GM India Plans to launch new car variants in India COMMERCIAL VEHICLES Tatas to position Hispano buses for inter-city travel VE Commercial Vehicles sales fall 6% CONSTRUCTION & AGRI MACHINERY Bajaj moves SC against TVS Motor Bajaj Auto may drive into Africa, Europe Bajaj Auto reports 8.13% fall in May sales COMPONENTS | ALLIED INDUSTRIES FINANCE & INSURANCE LUBRICANTS & ALTERNATIVE FUELS Oil stays above $68 as investors eye inflation INTERNATIONAL NEWS GM to sell Hummer to Chinese company General Motors asks judge to void seven corporate jet leases Court clears Chrysler-Fiat tie-up planned for Thursday GM goes under with $9.6 mn debt to ArcelorMittal Toyota's US sales fall 38 per cent in May Ford US sales strongest since July ECONOMY & FINANCE Sensex ends flat in volatile session
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| INDUSTRY Go To Top Hindustan Times (Web & Print Edition) New Delhi; The list of global automobile expositions hit by recession just got a little longer. Courtesy a 23 per cent hike in rental demanded by Indian Trade Promotion Organisation (ITPO), the New Delhi auto expo next year could also join the list. The economic slowdown has hit almost every auto expo this year, with the Geneva Motor Show and the upcoming Tokyo Motor Show becoming smaller in size. The rental charged by the ITPO last year was in the range of Rs 4,800-4,900 per square metre. But the organisation is now asking for almost Rs 5,900 per square metre. A host of expos like the ones in London, Melbourne and St Petersburg has been cancelled altogether due to a lack of participation. While the Indian and Chinese expos are the direct beneficiaries of this reduction, the ITPOs new overture has ensured that the organising committee of the Confederation of Indian Industry (CII), Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association have not been able to announce the expo. The price increase by the ITPO comes at a very inappropriate time, said Dilip Chenoy, director-general, SIAM. This is a time when organisers worldwide are incentivising automobile exhibitions. A hike in rentals is thus uncalled for.
Tata Nano, which was first showcased during the expo in January 2008. It helped the event clock a record visitor number of 1.6 million, much higher than the Paris and Tokyo Motor shows. The expo is also by far the largest revenue earner for the ITPO at Rs 29 crore last year. The hike is in line with the rise in prices over years, said an official at the ITPO who refused to be named. This is, however, not finalised and we are looking at what we can do on a case-to-case basis. BAJAJ SALES SLIDE, M&M FAILS TO IMPRESS Sumit Chaturvedi & Chanchal Pal Chauhan The Economic Times (Delhi Print Edition) See this story in: Mint (Delhi Print Edition) Pune-Based Bajaj Autos sales continued their downward slide in May with an 8% decline, even as rivals Hero Honda and Honda Motorcycle and Scooter India saw sales grow in double-digits. Another major player Mahindra and Mahindra (M&M), which acquired beleaguered two-wheeler maker Kinetic Motors a year ago, has not been able to make headway in the segment. Once the market leader, Bajaj Auto saw sales decline 23% to 12.86 lakh vehicles in the last fiscal. While the company blames the reversal on the slowdown and is banking on new launches, analysts tracking the auto market are still cautious about the companys strategy. New launches worked for Bajaj Auto in the past, but we have to wait and watch if the market accepts its new products in the same way Pulsar and others were accepted, says Vaishali Jajoo, auto analyst with Angel Broking. For Bajaj Auto, the sales decline in May was lower than 23% in April and its monthon-month sales are showing an increase on the back of new launches. The 135cc XCD bike is selling over 20,000 units every month and the refreshed Pulsar could help it return to positive sales territory. Bajaj is focusing on the high-volume, low-margin 100cc segment, but analysts say its too late now to shift focus. It doesnt make sense for them to shift focus from highend, good-margin segment to low-end, low-margin. The next revival will be seen in urban market and high-end products give numbers in this segment, said Mahantesh Sabard, an analyst with Centrum Broking. Bajaj is also exploring markets in Africa and Europe for its motorcycles, particularly the Boxer, CT100 and the Pulsar. The company, which exported more than 6 lakh motorcycles, is seeing rising sales of Boxer and CT100, company officials said. Bajaj is taking a step ahead in registering the Pulsar brand name in countries before it begins marketing the motorcycle. For M&M, which ventured into the two-wheeler business last year, sales have not taken off yet. While it is yet to launch new vehicles, automobile industry experts say that tightening credit is also playing spoilsport for such players. Vehicle financing is still an issue and is impacting all major players. Companies have to find new ways of financing whether they use captive finance or tie up with PSU banks, which only few companies have successfully managed, said Kapil Arora, partner, Ernst & Young. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Shobhana Subramanian Business Standard (Compass) Mumbai: The anticipated spends on infrastructure and expected investments in agriculture should come as a shot in the arm for Mahindra and Mahindras farm equipment, pickups and light commercial vehicles. Already, the success of the Xylo has meant better sales of utility vehicles and theres little reason why the momentum should not sustain. All in all, the imminent recovery in the economy suggests a far better performance for the company than was the case even six months back, when it appeared that volumes would continue to fall at least in the first half of this year. The numbers for the month of May may have been somewhat subdued-the year- on year growth for the automotive segment came off fairly sharply but its only after the election results that consumer confidence would have started improving. Therefore, on the low base of 2009-10, its possible that UV sales could grow in strong double digits this year. Of course much would depend on how quickly the economy revives but rural spends dont seem to have dropped too much and, therefore, tractors too should see better demand than they did last year. Now that credit seems to be more easily available and interest rates too are falling, the companys borrowings dont seem to be too highanalysts estimate M&Ms total debt to equity at 0.8 times which is reasonable. With cash flows only expected to ease from here on, the pressure on the balance sheet should reduce. The company doesnt intend to spend too much by way of capital expenditure so its unlikely it will dilute equity to raise resources. With prices of commodities easing, the raw materials bill should fall resulting in a slightly higher ebitda (earnings before interest, tax and depreciation) margin of around 14 per cent for 2009-10. Merrill Lynch expects M&Ms sales in the current year at just over Rs 28,000 crore while net profits are estimated to come in at around Rs 1900 crore. At Rs725, the stock trades at an EV/ebitda of around seven times in keeping with the historical average. http://www.business-standard.com/india/news/mm-turnaround-time/359895/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| CARS, SUVs, MUVs Go To Top Pankaj Doval The Economic Times (Web Edition) See similar story in: The Times of India (Web & Print Edition) New Delhi: It may have entered bankruptcy protection in the US, but General Motors still has ambitious plans for India. The auto major is planning to develop a small car which will be its cheapest globally, at a possible price tag of under Rs 2 lakh. As it works its way out of bankruptcy in the US, GM has reiterated that markets like India and China would be key to its revival, especially when numbers remain depressed in home market US. Reilly also said small cars would be the key to growth in the future and GM would focus more on their development. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/GM-looking-at- http://timesofindia.indiatimes.com/GM-looking-at-Rs-2-lakh-mini-car-for-India/ GM INDIA FINDS THE GOING TOUGH The Economic Times (Web & Print Edition) See similar story in: The Hindu Business Line (Web & Print Edition), The Tribune (Web Edition), Daily News & Analysis (Web Edition), The Pioneer (Web & Print Edition), The Hindu (Web & Print Edition), The Statesman (Web Edition), The Telegraph (Web Edition), Business Standard (Web & Print Edition) New Delhi: General Motors India is having a tough time raising cash from local financial institutions, which are wary of lending to a company whose parent is in deep trouble, the head of the automakers Asia-Pacific operations said.
http://www.thehindubusinessline.com/blnus/02021394.htm http://www.tribuneindia.com/2009/20090603/biz.htm#3 http://www.dnaindia.com/report.asp?newsid=1261219 http://www.dailypioneer.com/180375/GM-facing-difficulties-in-raising-funds-in-India.html http://www.hindu.com/2009/06/03/stories/2009060351071300.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=256517 http://www.telegraphindia.com/1090603/jsp/business/story_11056065.jsp http://business.rediff.com/report/2009/jun/02/bcrisis-gm-faces-hurdles-raising-funds-in-india.htm http://www.thehindubusinessline.com/2009/06/03/stories/2009060351860100.htm NORMAL OPERATIONS FOR GM INDIA The Economic Times (Web Edition) New Delhi: GM India has announced that it continues all its normal operations and is not included in the court reinvention process of GMs US operations. GM announced a U.S. Court filing of the automaker under Chapter 11 of the United States Bankruptcy Code. The launch of New GM, which will have substantially less debt and operating cost, is expected to be completed within two or three months, and is aimed at creating a company that is stronger, leaner and ready to move forward. We believe this step which was taken with the support of the U.S. government is the most efficient and effective means for GM to quickly achieve a competitive and profitable future. , said Mr. Nick Reilly, GM Group Vice President and President of GM Asia Pacific in Shanghai.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles PLANS TO LAUNCH NEW CAR VARIANTS IN INDIA The Statesman (Web Edition) Kolkata: General Motors India, which has a state-of-the-art manufacturing facility at Halol in Gujarat and another in Talegaon, Maharashtra, will soon launch new car lines, LPG, CNG and other variants since GM India is not included in the US filing for Chapter 11. Dealers, warranty and customer support operations will also remain unaffected.
We are committed to ensuring that our customers continue to receive a top-notch sales, service, spare parts and warranty coverage experience. Our dealers will also continue to receive all our car lines while our suppliers will continue to work with us to supply parts and components for our cars which we will continue to build at our state-of-the-art Talegaon and Halol facilities, in the normal course of business," Mr Karl Slym, president and managing director, General Motors India, said in a statement.
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| COMMERCIAL VEHICLES Go To Top Business Standard (Web & Print Edition) Mumbai: The downside of the credit boom that began in 2004, especially in the commercial vehicle (CV) segment, is becoming visible. Loans granted to the segment between 2004 and 2006 have shown higher defaults as truckers felt the pressure of the economic slowdown, according to a study by rating agency Icra. The loans securitised between January 2004 and December 2006 have shown progressively lower collection efficiency and hence, higher delinquency levels. In fact, among all the years, the pools securitised in 2006 have shown the weakest performance, the rating agency said. The loan pools from 2007 and 2008 are clearly superior to those from 2005 and 2006. Given the relatively higher collection efficiency for these loan pools, the use of credit enhancement corpus has also been low to moderate. The liquidity crunch in the financial system, particularly in October-December 2008, adversely affected collections on retail loan pools, it said. Elaborating the distinct trend in loan repayment performance, Kalpesh Gada, head (structured finance products) at Icra, said the business environment in the CV industry till the end of 2006 was qualitatively different from than the one in 2007 and 2008. In 2006, the economy cycle was in the upward growth mode and the demand for transportation was high. As the interest rates were low, the volume of loans extended to truckers was high. Gada said many small fleet operators took loans to expand business. The lending norms (assessing the credit worthiness of customers) remained relatively weak during this period. However, there was a change in the interest rate cycle from early 2007. The lending rates began to harden and bankers also became cautious on the pace and quality of lending by tightening norms. A senior public sector bank official said the financial crisis in 2008 and economic slowdown hit the transporters. While demand slumped and incomes dipped, the obligation for repayments remained intact. Some small fleet operators (the most vulnerable lot) began to default on payments, he added. The rating agency has analysed the performance of CV pools securitised between CY04 and CY08. http://www.business-standard.com/india/news/slowdown-speedscv-loan-defaults/359886/ TATAS TO POSITION HISPANO BUSES FOR INTER-CITY TRAVEL Manu P. Toms The Hindu Business Line (Web & Print Edition) Mumbai: Tata Motors is gearing up to position Hispano buses more aggressively for inter-city travel after an encouraging test-marketing effort. The Tatas have a 21 per cent stake in the Spanish bus manufacturer and will gradually increase this in the coming years. The Hispano luxury coaches are being assembled at the Automobile Corporation of Goa (ACGL) plant, which again is in the control of Tata Motors. Nearly 50 buses have been sold to long distance travel operators in Mumbai and Punjab for evaluation. Initially, we restricted sales to a few agencies in key centres for extensive trials. We are now ready to begin marketing it to various customers. Some State transport corporations have also shown interest in procuring these buses, said Mr Ravi Pisharody, Vice-President, Sales & Marketing, Tata Motors. Orissa is reportedly one of them while those in Andhra Pradesh and Uttar Pradesh have reportedly begun using these buses in a small way. The chassis of these inter-city coaches have been developed locally while Hispano has designed the bus body. The likes of Volvo and Daimler are already in this travel segment in India. As in the case of the World Truck range, Tata Motors hopes to capitalise on the price advantage of the Hispano buses. With a greater focus on localisation, its price is under Rs 60 lakh. On the other hand, the Volvo buses are dearer at Rs 70 lakh plus but this has not deterred operators from buying them, as they do not have any problems in terms of maintenance, safety and comfort. Further, returns on investments are not much of an issue either because commuters prefer them to trains, especially between Mumbai and Pune. The Volvo brand has become so popular on this stretch over the years that the buses actually relegated the Shatabdi luxury train to the sidelines and prompted it to go for a more basic makeover. The long distance super deluxe coach segment is probably one gap we find in the commercial vehicle range of Tata Motors. The Hispano buses will fill that up, said Mr Pisharody. The intercity bus segment is estimated to clock about 1,000 units annually. In the medium term, it will see huge growth largely driven by better roads, he added. Marcopolo alliance Another important part of the Tata bus strategy is the alliance with Marcopolo of Brazil. These buses, assembled in the Dharwad facility, are part of a larger plan for intra-city transport where cities like Delhi have already begun using them in a big way. http://www.thehindubusinessline.com/2009/06/03/stories/2009060351830200.htm VE COMMERCIAL VEHICLES SALES FALL 6% PTI See this story in: Business Standard (Delhi Print Edition) Auto maker VE Commercial Vehicles on Tuesday reported 6.01 per cent decline in its total sales of Eicher trucks and buses for the month of May at 1,939 units against 2,063 units in the same month last year. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSTRUCTION & AGRI MACHINERY Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/3 WHEELERS Go To Top The Hindu Business Line New Delhi: Despite a challenging market environment for financing two-wheelers, Japanese two-wheeler companies of Honda, Yamaha and Suzuki sold more bikes in May compared with the same month last year. Bajaj Auto, however, showed a decline in sales. Honda Motorcycles and Scooters India, the wholly-owned subsidiary of Honda Motor Co, posted a 34.69 per cent increase in its motorcycle sales at 39,495 units for May. The companys scooter sales grew by 6 per cent to 60,475 units. We are ramping up production for the new Activa because of which the growth has been lower. In case of motorcycles there has been good demand across all segments. We expect the demand to continue at a similar level in the coming months, said Mr Naresh Rattan, who heads marketing at Honda Motorcycles and Scooters India. Bajaj sales dip Bajaj Auto on Tuesday reported an 8 per cent drop in motorcycle sales during May at 1.65 lakh units as against 1.79 lakh units in the same period a year ago. The numbers include both domestic and exports. The companys overall exports fell by 3 per cent to 58,682 units. Bajaj said it will launch a new Pulsar in the month to revive sales. The Indian unit of Yamaha posted an 82 per cent increase in sales at 16,952 units last month against 9,295 units in the year-ago period. The company said the growth was mainly because of its high performance bikes such as FZ-S, FZ-16 and YZF-R15. Suzuki Motorcycles sold 12,734 units during the month, a 17 per cent increase against 10,845 units in the same month last year. http://www.thehindubusinessline.com/2009/06/03/stories/2009060351790200.htm BAJAJ MOVES SC AGAINST TVS MOTOR The Economic Times Chennai: Bajaj Auto on Tuesday filed a special leave petition in the Supreme Court(SC) against a Madras High Court division bench order restraining it from interfering with TVS Motors manufacture and marketing of Flame motorbike. The High Court had recently granted the injunction after setting aside an earlier order granted in favour of Bajaj. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" BAJAJ AUTO MAY DRIVE INTO AFRICA, EUROPE The Economic Times Pune: Bajaj Auto is exploring markets in Africa and Europe for its motorcycles, particularly the Boxer, CT100 and the Pulsar. The company, which exported more than 6 lakh motorcycles, is seeing rising sales of the low cost Boxer and CT100, company officials said. Bajaj is taking a step ahead in registering the Pulsar brand name in countries before it begins marketing the motorcycle. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" BAJAJ AUTO REPORTS 8.13% FALL IN MAY SALES PTI See this story in: The Hindu Business Line, The Pioneer, The Financial Express New Delhi: Two-wheeler maker Bajaj Auto on Tuesday reported an 8.13 per cent fall in motorcycle sales in May at 1,65,049 units as against 1,79,649 units in the same month last year. Total two-wheeler sales during the month stood at 1,65,697 units, an 8.42 per cent decrease over the same month last year. The company had sold 1,80,935 units of two-wheelers in the same period a year ago. BAL's exports also plummeted by 2.55 per cent at 58,682 units in May from 60,215 units a year ago. The company's total vehicle sales stood at 1,85,341 units last month compared with 2,01,511 units in the same period a year ago, down by 8.02 per cent. Bajaj domestic motorcycle sales continued to rise for the fourth consecutive month since the launch of the XCD 135 in February, 2009, and the XCD sold about 20,000 units in May,'' BAL said. The company added: Stagnant commercial vehicle sales continue to reflect subdued economic conditions ... Exports have almost normalised after the dip in January-March 2009 and are expected to gradually exhibit positive year-on-year growth.'' http://www.thehindubusinessline.com/blnus/02021401.htm http://www.dailypioneer.com/180366/Snapshots.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPONENTS Go To Top Arindam Sinha The Financial Express Jamshedpur: TRF, a Tata enterprise in engineering and supply of material handling equipment and systems, has entered into a share holders agreement with Tata Capital Ltd and Jasper Industries Private Ltd to form a joint venture company--Adithya Automotive Applications Pvt Ltd (AAAPL). The JV aims to provide end solutions through fabrication and machining for vehicles to be used as tippers, load bodies, trailers, refrigerated bodies and so forth. While TRF will hold a majority 51% in the JV company, Jasper Industries Pvt Ltd and Tata Capital Ltd are to hold 29% and 20%, respectively, in Adithya Automotive Applications Pvt Ltd. TRF executive director RC Nandrajog told FE over phone on Monday that the new company will station its manufacturing base at the Tata Motors vendor park in Lucknow. Asked if TRF was gradually shifting its focus to automotive parts, Nandrajog said, Though TRFs focus will continue to be supplying engineering and material handling equipment, automotive will become a very strong vertical. TRF acquired a majority stake in October 2007 in York Transport Equipment (Asia) Pte Limited, Singapore, which is engaged in the business of production and distribution of trailer undergears, with a market presence in 27 countries. York Transport Equipment (India) Pvt Ltd, a subsidiary of York Transport Equipment (Asia), launched its first axles in April this year from its manufacturing facility located on TRFs premises here. The TRF executive director said Adithya Automotive Applications Pvt Ltd will start manufacturing the products within the next two to three months. http://www.financialexpress.com/news/trf-forms-jv-to-make-auto-components/470136/ REALITY CHECK: AUTO COMPONENT EXPORTS MAY SKID The Economic Times New Delhi: The bankruptcy filing by General Motors , the worlds largest carmaker till last year, may hit Indian auto component exports and lead to surplus capacity and payment delays in the domestic market , say industry experts. GM accounts for a significant chunk of $900 million worth of auto components India exports to US every year. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Auto- The Financial Express
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| ALLIED INDUSTRY Go To Top PTI See this story in: Business Standard Members of the strikers union at tyre giant MRFs factory at Arakkonam near Chennai began a hunger-strike on Tuesday. The management says this union has no majority support and is an unrecognized one, a point the union is disputing in the courts. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCE & INSURANCE Go To Top PTI See this story in: Daily News & Analysis , The Indian Express New Delhi: Global credit rating agency Moody's on Tuesday revised upwards outlook for its low investment grade rating on Tata Motors from negative to stable in wake of country's leading automaker successfully refinancing its bridge loan for Jaguar and Land Rover acquisition. "The change in outlook to stable reflects the completion of the refinancing of the maturing USD 2 billion bridge loan, originally raised in June 2008 for TML's acquisition of Jaguar Land Rover," therating agency said in a statement on Tueaday. The loan facility was taken up by Tata Motors with a scheduled maturity in June 2009. The outlook has been revised on Moody's 'B3 corporate family rating', a low investment grade rating, for Tata Motors. The corporate family ratings are based on a corporate family's ability to honour all of its financial obligations. The successful refinancing, the agency said, speaks of the company's strong support from the domestic banking sector during the challenging times of credit markets. Tata Motors had refinanced the bridge loan through issuing Rs 4,200 crore secured non-convertible rupee debentures and others prepayment through fixed deposits scheme and rollover of some balance. However, the agency pointed out that the capital structure of the company still is highly geared and has a high proportion of short-term debt. http://www.dnaindia.com/report.asp?newsid=1261269 http://www.indianexpress.com/news/moodys-upgrades-its-ratings-on-tata-motors/470103/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LUBRICANTS & ALTERNATIVE FUELS Go To Top Sanjay Dutta The Times of India New Delhi: In a move that could lead to demands for a hike in public transport rates, Indraprastha Gas Ltd, the citys sole supplier of CNG, is set to increase prices by Rs 2 per kg, or 10%, to make up for rise in input costs. The new price could be announced shortly. Even after a hike, the cost of CNG in Delhi will be lower than in cities like Mumbai, Gandhinagar and Surat that also use the fuel. Delhi government sources claimed the quantum of increase in CNG price would have negligible impact on fares. The increase in CNG price will push up transport costs by one paisa per passenger per km for a bus carrying an average of 60 commuters, two paise for an auto and 10 paise per km for taxis and private cars. Roughly, a bus runs about 3.5km on a kg of CNG, auto about 35km and cars such as Wagon-R or Santro, about 20km. The IGL board had approved the move last week. The presence of a representative from Delhi government, a stakeholder, in the board is being seen as a nod from the state. Technically, IGL does not have to seek approval from the oil ministry. But it is awaiting an informal approval as two of its main promoters, GAIL and Bharat Petroleum, are staterun. An informal clearance is expected any day from the oil ministry, a source said. Sources added the price increase was necessary as IGLs costs had risen by about Rs 2 per kg, including taxes and levies. The volume of gas IGL gets from the central pool at government-controlled price of Rs 5.82 per cubic metre has proved to be inadequate in view of a 20-25% growth in annual demand for CNG. As a result, IGL has been buying imported LNG (liquefied natural gas) at Rs 14.51 per cubic metre to meet additional demand. In addition, IGL has to spend money on mixing the LNG with CNG and pays special surcharge levied by gas supplier GAIL for the extra gas it draws from the system. CNG price was last raised from Rs 18 to Rs 19.20 on June 6, 2006. It was later reduced to Rs 18.90 to pass on the benefit of a reduction in excise duty Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" OIL STAYS ABOVE $68 AS INVESTORS EYE INFLATION AP See this story in: The Times of India Singapore: Oil prices lingered above $68 a barrel on Tuesday in Asia after doubling since March on investor expectations that a massive global fiscal stimulus could spark an economic recovery and inflation. http://timesofindia.indiatimes.com/Business/International-Business/Oil-stays-above-68-as-investors-eye-inflation/articleshow/4607283.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERNATIONAL NEWS Go To Top Bloomberg See this story in: Business Standard New York: General Motors Corp won court approval on its first day in bankruptcy to sell assets as soon as next month after collapsing under $172.8 billion in debt and failing to adapt to consumer demands for smaller cars. The automaker, the largest manufacturer to seek protection from creditors, also won permission yesterday from Judge Robert Gerber in Manhattan to draw $15 billion from a $33.3 billion bankruptcy loan. Detroit-based GM plans to form a new company in 60 to 90 days, built around its Cadillac, Chevrolet, Buick and GMC brands in the US The lead bidder for the assets is the US Treasury, which will provide the 100-year-old company with billions in loans that would be converted into a 60 per cent equity stake. GM said it has an agreement with a buyer for its Hummer sport-utility vehicle unit. Theres only one prospective purchaser, GM attorney Harvey Miller told Gerber, referring to the US governments offer for the new GM. Theres no entity that has the wherewithal to bid in these cases. The automaker missed Monday's deadline to show that it could reorganise outside of court and reported debt of more than twice the listed value of its assets. The filing was a defining moment in the reinvention of GM, said Fritz Henderson, president and chief executive officer of the carmaker. The economic crisis has caused enormous disruption in the auto industry. One idle GM facility in the US will be retooled to make small, fuel-efficient cars as part of an agreement with union workers, GM said May 29. Under the deal to sell Hummer announced, the identity of the buyer and financial terms arent yet being disclosed. GMs Saab unit is reorganizing in Sweden. The German government picked Magna International Inc, a Canadian car-parts maker, as the preferred bidder to buy the companys Opel unit. The GM Chapter 11 petition makes the carmakers reorganization the third-largest bankruptcy in US history, ranked by total assets listed in the initial filing, after Lehman Brothers Holdings Inc. and WorldCom Inc. This is a step they should have taken more than a year ago, which could have put them in much better shape, said Stephen Pope, chief global strategist at Cantor Fitzgerald in London. GM listed in its petition as top creditors Wilmington Trust Co, representing bondholders owed $22.8 billion; United Auto Workers, owed $20.6 billion; and Deutsche Bank AG, representing bondholders owed $4.44 billion. The Unofficial GM Dealers Committee, which said it represents more than 6,000 US GM dealers, filed a notice that it will take part in the case. Before declaring bankruptcy, GM received $20.57 billion in US Treasury loans, according to court filings. Administration officials said yesterday the government would advance $30 billion more, with another $9.5 billion from the Canadian government. GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again, President Barack Obama said on Monday. The government was becoming a reluctant owner of the automaker, Obama said, adding that his goal was to take a hands-off approach and get out quickly. GM said on Monday that the new company would have total debt of $17 billion, excluding liabilities such as a workers health-care trust. The filing said the loan total from the US and Canadian government could grow to as much as $65 billion. Chrysler LLC, the automaker that filed for bankruptcy April 30, listed $39 billion in assets in its petition. The Auburn Hills, Michigan-based carmaker plans to transfer most of its assets to a new entity run by Italys Fiat SpA. Another bankruptcy judge in New York approved that deal May 31. Aside from the U.S. governments equity share, GMs statement called for a worker health-care fund to get a 17.5 per cent stake and the Canadian government to take 11.7 per cent. Bondholders would be eligible for 10 per cent and warrants to buy another 15 per cent. There would be no initial public trading of the shares, some of which will be given to the Canadian government in exchange for loans, an administration official said last week. The company might remain private for as long as 18 months, said the official, who asked not to be identified. Because of its size, GM faces more obstacles than Chrysler in resolving creditor claims that remain in bankruptcy after the new company is created. Reeling from almost $88 billion in losses since 2004, GM may not return to profitability if US vehicle sales are below 10 million a year, an amount the government said a new GM will need to break even. GM filed a request to sell most of its assets to a Treasury-sponsored entity that will hold the governments stake in the company. GMs board of directors said in court papers that an asset sale to the Treasury is expedient. Of the government funding, approximately $30.1 billion in new money will be advanced by the Treasury, according to the filing. GMs Saturn LLC and Saturn Distribution Corp. also sought court protection yesterday. The Chapter 11 petitions are the only opportunity for preserving the Saturn brand, according to the filings. Just a couple of months ago, it was predicted by some that a bankruptcy filing by GM would inevitably lead to its demise, said Lynn Hiestand, a lawyer specialising in restructuring with Skadden, Arps, Slate, Meagher & Flom LLP. That remains to be seen. Hiestands firm represents Delphi Corp, GMs former parts unit, in a separate US bankruptcy. The automaker was founded in 1908 by William Billy Durant, who bought more than 20 car companies before being ousted in a 1920 bailout by Pierre Du Pont and JP Morgan. By the 1960s, GM controlled more than half the US vehicle market. In 2008, it sold only 8.35 million cars worldwide, losing its place as the worlds biggest automaker to Toyota Motor Corp as customers opted for the Japanese carmakers fuel- efficient Corolla and Camry brands instead of GMs light trucks and Hummers. GM will introduce several vehicles in 2009 and 2010, the company said, including the Chevrolet Camaro, the Buick LaCrosse, the Cadillac SRX and CTS Sport Wagon, the Chevy Equinox and the Chevy Cruze, GMs new global compact car. Also scheduled for production is the Chevy Volt, an extended-range electric vehicle that can travel up to 40 miles on battery power alone with the extended-range capability of more than 300 total miles, the company said. Monday's filing will trigger credit-default swaps protecting about $3.1 billion of GM debt, in the biggest settlement of the derivatives since Septembers collapse of Lehman Brothers. Pricing reflected the risks last week as dealers charged about $8.7 million upfront and $500,000 annually to protect $10 million of debt. Banks such as JPMorgan Chase & Co secured GMs revolving loan of about $4.5 billion with inventory, receivables and factories, also providing a $1.5 billion term loan. The automaker agreed to buy back ownership of Delphi plants in Wyoming, Michigan; Lockport and Rochester, New York; and Kokomo, Indiana, according to a Delphi statement on Monday. The requests approved by Gerber include permission for GM to honor vehicle warranties and dealer-incentive programs, the company said in a statement. GM said it also won approval to meet obligations to employees and retirees as well as fulfill financing agreements and pay essential suppliers. Gerber also presides over the bankruptcies of Lyondell Chemical Co and BearingPoint Inc. He handled the Adelphia Communications Corp and Global Crossing Ltd cases as well. The judge said objections to the sale must be filed by June 19 and set a deadline of June 22 for competing bids. The gravity of the circumstances cannot be overstated, GM said in court papers. The business and assets to be transferred are extremely sensitive and will be subject to major value erosion unless they are quickly sold and transferred to New GM. The case is In re General Motors Corp, 09-50026, US Bankruptcy Court, Southern District, New York (Manhattan). http://www.business-standard.com/india/news/gm-bankruptcy-judge-approves-asset-sale/359935/ GM TO SELL HUMMER TO CHINESE COMPANY Agencies See this story in: The Economic Times, The Tribune, Deccan Herald, Daily News & Analysis , Asian Age, The Times of India, The Telegraph, Business Standard, Yahoo India Detroit: General Motors Corp. took a key step toward its downsizing on Tuesday, striking a tentative deal to sell its Hummer brand to a Chinese manufacturer, while also revealing that it has potential buyers for its Saturn and Saab brands. http://www.tribuneindia.com/2009/20090603/biz.htm#4 http://www.dnaindia.com/report.asp?newsid=1261252 http://www.deccanherald.com/content/5977/gm-strikes-deal-sell-hummer.html http://www.asianage.com/presentation/leftnavigation/news/business/hummer-finds-buyer.aspx http://timesofindia.indiatimes.com/GM-to-sell-Hummer-/articleshow/4609044.cms http://www.telegraphindia.com/1090603/jsp/business/story_11056062.jsp http://business.rediff.com/mlook/2009/jun/02/mlook-general-motors-finds-a-buyer-for-hummer-brand.htm http://in.biz.yahoo.com/090602/137/bato7e.html GENERAL MOTORS ASKS JUDGE TO VOID SEVEN CORPORATE JET LEASES Bloomberg See this story in: Business Standard Los Angeles: General Motors Corp, on its first day under court protection, asked a bankruptcy judge for permission to cancel leases for seven corporate jets and for an airport hangar at Detroit Metropolitan Wayne County Airport. The leases are not necessary or valuable to the debtors business activities or the sale process, GM said on Monday in a filing in US Bankruptcy Court in New York. GMs former Chief Executive Officer Rick Wagoner, who was forced out in March, became a symbol of the failing US auto industry last year when he and other executives flew to Washington by corporate jet to ask for government aid. When Wagoner and other GM executives met with government officials in February, they flew on commercial airlines. GM unsuccessfully tried to cancel some of the leases last year, Tom Wilkinson, a company spokesman, said on Monday in a phone interview. GM, the largest carmaker until its 77-year reign ended last year, surpassed Chrysler LLC as the largest manufacturer to file for bankruptcy. Detroit-based GM plans to launch a new company in 60 to 90 days, armed with vehicles from its Cadillac, Chevrolet, Buick and GMC units for the US market. The case is In re General Motors Corp, 09-50026, US Bankruptcy Court for the Southern District, New York (Manhattan). COURT CLEARS CHRYSLER-FIAT TIE-UP PLANNED FOR THURSDAY AFP See this story in: The Times of India New York: A bankruptcy judge has cleared the tie-up of Chrysler and Italy's Fiat for Thursday pending any delay from an appeals court, court documents showed Tuesday. GM GOES UNDER WITH $9.6 MN DEBT TO ARCELORMITTAL PTI See this story in: Daily News & Analysis , The Indian Express, The Times of India New York: Bankrupt General Motors has to pay USD 9.55 million (about Rs 45 crore) in trade debt to the world's largest steel maker ArcelorMittal. The car maker, which filed for bankruptcy protection under Chapter 11 yesterday, owes USD 172.81 billion in total debts to its 50 largest creditors, including ArcelorMittal. In its filing with the bankruptcy court in the Southern District of New York GM said it has a "trade debt" of USD 9.55 million to be paid to NRI-billionaire Lakshmi Mittal-led ArcelorMittal. According to the filing, the auto maker has assets worth USD 82.29 billion. Under Chapter 11 bankruptcy protection, the company can continue with its operations and is protected from the creditors. Among the 50 largest creditors named in the filing, GM has to pay the maximum of USD 22.76 billion to Wilmington Trust Company. The second largest creditor is International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), which has to get USD 20.56 billion. In the case of Wilmington Trust, GM has termed the money owed as "bond debt" while for UAW, the amount of USD 20.56 billion is part of "employee obligations". http://www.dnaindia.com/report.asp?newsid=1261203 http://www.indianexpress.com/news/gm-goes-under-with-9.6-mn-debt-to-arcelormittal/470051/ http://timesofindia.indiatimes.com/Business/GM-owes-96M-to-ArcelorMittal/articleshow/4609127.cms TOYOTA'S US SALES FALL 38 PER CENT IN MAY Agencies See this story in: The Economic Times Chicago: Toyota said on Tuesday that the US automotive market appeared to be recovering even as it posted a 38 per cent drop in May US sales. "The big jump in consumer confidence in May translated into a solid gain in retail vehicle sales compared to April," said Don Esmond, senior vice president of automotive operations for Toyota Motor Sales. FORD US SALES STRONGEST SINCE JULY Reuters See this story in: The Economic Times Detroit: Ford Motor said on Tuesday that the US sales fell 24.2% in May for all of its brands, as the only US automaker not in bankruptcy reported its strongest domestic sales since July 2008. Ford sales fell to 161,531 vehicles in May, including all of its brands, from 213,238 vehicles a year earlier. For its Ford, Lincoln and Mercury brands combined, sales fell 24.3% to 155,954 vehicles in May from a year earlier. The Economic Times Stpetersburg: Japan's Nissan Motor opened a $200-million plant in Russia on Tuesday and its head said he had confidence the Russian car market would recover from its current steep downturn. "We have confidence in the market and its recovery and for us Russia is the number one market in Europe and fifth in the world," Carlos Ghosn said. The plant, with a capacity of 50,000 vehicles a year, will be assembling Teana cars and from September will start assembling Xtrail SUVs. Almost all major car makers have opened or have committed to open car plants in Russia in recent years, courted by a favourable customs regime on imported parts and betting on a double digit percentage growth in the market. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Business Line Mumbai: The rupee closed lower against the dollar, though it regained intra-day losses. The domestic currency opened at 47.06 and closed at 47.02, against the previous close of 46.97. During the day, it fell to a low of 47.24. According to a forex dealer with a public sector bank, the rupee opened weak because of expectation of capital outflows. It however, gained as the equity market gained. In the overseas market, the dollar was weak against other global currencies, with the eur o touching a years high. While there is more room for the rupee to appreciate, there is a feeling among market participants that any selling would be countered by the Reserve Bank of India in a bid to protect exporters interests, the dealer said. The forward premia moved in a range with the six-month closing at 3.15 per cent (3.1 per cent) and the one-year at 2.64 per cent (2.61 per cent). http://www.thehindubusinessline.com/2009/06/03/stories/2009060351030600.htm SENSEX ENDS FLAT IN VOLATILE SESSION PTI See this story in: The Hindu Business Line Mumbai: The Bombay Stock Exchange benchmark Sensex ended the day with a gain of 34.28 points, at 14,874.91. The broad-based Nifty fell by 4.65 points at 4,525.25, after opening at 4,586.40 points. Major gainers were Tata Steel, Tata Motors, HDFC, Sterlite Industries, ICICI Bank, and Mahindra & Mahindra. On the other hand, ACC, Ranbaxy Laboratories, Reliance Energy, Tata Power, HDFC Bank and DLF were the major losers. The Sensex surged 28 per cent in May, its biggest monthly gain since March 1992, when the index climbed 51 per cent. http://www.thehindubusinessline.com/blnus/05021901.htm Last Financial closing
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