ANZ to buy RBS Asian assets for $550m | FT.com Banks

ANZ will buy Royal Bank of Scotland’s operations in six Asian countries for $550m A$687m in a deal that underlines the ability of Australia’s strongly capitalised banks to acquire assets for highly competitive prices from struggling international peers.

ANZ, which wants to generate a fifth of its earnings from Asian operations, will buy RBS’s retail, wealth management and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong, as well as the UK bank’s institutional banking businesses in Taiwan, the Philippines and Vietnam.

The news sent ANZ shares up 1.5 per cent to A$19.28. RBS shares opened 1p or 47.47p in London.RBS, which reports first-half results on Friday, has been in talks with ANZ and the UK’s Standard Chartered for months over the sale of its retail assets in Asia as it tries to shrink its balance sheet.

The assets include 170 branches, with 28 in India and 13 in China. StanChart has been interested in acquiring RBS units being sold in China, India and Malaysia.In total, the assets were expected to fetch about $1bn-$1.5bn.

RBS said on Tuesday it was in “advanced discussions” with bidders for the remaining assets in Asia it had decided to sell. It said the sale to ANZ was at a $50m premium over book value.

Australian banks have completed a number of transactions with UK financial services groups over the last year, led by Commonwealth Bank of Australia’s purchase of HBOS’s Australian subsidiary Bankwest for A$2bn.

Mike Smith, ANZ chief executive, said the acquisition of the RBS businesses was a stepping stone in the bank’s “super regional strategy” and created a new platform for its retail and wealth operations in Asia.

via FT.com / Companies / Banks – ANZ to buy RBS Asian assets for $550m.

ANZ wd have had to divest the India China Malaysia assets later if Stanchart had not stepped forward. Now the middling Stanchart has 41 new branches in India and China. The private banking and corporate investment banking business has not been sold

India Power Infrastructure: 2009 IPO Update

As per current Ministry of Steel meetings, the NMDC stake sale is likely to be of 15% in which case it could easily be over Rs 2000 crores ($400m) at CMP of 375 ( $7.50) As also the ones for Adani Power, Godrej, Indiabulls Power..i think it can happen given that each will have $40-50 million from retail investors, but it requires disciplined Institutional Investors who believe the India story..anyway, this kind of volume has not been done ever before in the same year, but then this is the era of Infrastructure.

Foreign portfolio investors have poured in $8.7 billion since April, while speculation is already rife for PSU divestment in Coal India and National Hydro Electric Corp in the Power sector, each easily worth a $1 b for 15-20% stake. Also SBI Infrastructure fund with Macquarie has raised its bucket size to 1.5 billion adding another $500m.

A dani Power is raising $600m. NHPC is going first planning to issue more than 170 crore shares of Rs 10 par value for offer including a existing 5% stake unlikely to be issued at par(despite reports) to net 6000 crores for 15% of the company capital NHPC also plans to invest Rs 28,000 crore by 2012 to position itself as over 10,000 MW utility. At present, its generation capacity stands at 5,200 MW. The proceeds from the IPO would partly be utilised to finance the expansions. Only 2000 Cr will go to new projects while 4000 Crore will fund existing project plans

Indiabulls Power seems to have issued earlier capital at a premium and a current QIP at 25% of the Original at Par to raise a further 200 Cr ( $40m) Thus it is curently sitting on unutilised capital of 2200 crores ($440m). It has two Power plants planned in Maharashtra with the first in Nasik of 1335MW capacity (shld cost between (5500 cr to 7000 cr OR $1.1-1.4 billion) It is unlikely to try for any considerable premium if it comes first.

Friday Tweets – July 24, 2009

Do remember to validate picks at http://socialpicks.com/zyaadakairaada/portfolio $AMZN is down 8% as we speak

Facebook at 77 million visitors, Amazon 64 m, Craigslist at 47 m, WordPress at 26m and Twitter at 20m compared to Goog at 157m in June09
– about 2 hours ago from TweetDeck

So $AMZN makes $1.75 bn per month from 64 million visitors
– 5 minutes ago from TweetDeck (11:40 am ET)

That is more than $27 from every single visitor! $AMZN
– 3 minutes ago from TweetDeck

If Twitter made 10% of that they would have sales of $54million to start with ( based on June comscore)
– 2 minutes ago from TweetDeck

China’s new loans may surge to a record 11 trillion renminbi ($1.6 trillion) this year as the government refrains from tightening lending rules to protect economic growth
– just now from Tweetdeck

Goldman /Blankfein paid a 23% return on the govt’s TARP investment, paying $1.1 billion for the warrants
– half a minute ago from TweetDeck

Also Buffet sold a third of his stake in Moody’s
– just now from Tweetdeck

China’s state construction giant raised a $7.3 billion in IPO
– 4 minutes ago from TweetDeck

(Green Shoots?) Both American Express (AXP) and Capitol One (COF) reported earnings that were quite weak (seekingalpha dot com)
– 2 minutes ago from TweetDeck

$CIT looks in line to become smaller, selling its comml business and most likely losing its aviation lending and rail finance biz profitably
– half a minute ago from TweetDeck

BTW, we continue to be short on both $AXP and $COF and bullish on the market ( same as before act. results came out @zyakaira
– half a minute ago from TweetDeck

<-> twitter @blrmoneytalkz

The First Divestment: NMDC

Update: As per current Ministry of Steel meetings, the NMDC stake sale is likely to be of 15% in which case it could easily be over Rs 2000 crores ($400m) at CMP of 375 ( $7.50) As also the ones for Adani Power, Godrej, Indiabulls Power..i think it can happen given that each will have $40-50 million from retail investors, but it requires disciplined Institutional Investors who belive the India story..anyway, this kind of volume has not been done ever before in the same year, but then this is the era of Infrastructure.

The NMDC Divestment should proceed smoothly for a 5% stake if approved. Other DRHPs filed include Godrej Properties and Indiabulls Power which may do well despite not very strong management and doubtful assets ( Godrej has most of its land bank in JVs with partners , while Indiabulls Power is moving into an unrelated field after a not so successful RE and NBFC run) for NMDC if a 5% divestment comes through it would raise around 750 crores at current market prices which already seem to be around their average 6 months value in anticipation and seem like a good starting point for the Divestment to roll.

NMDC is India’s single largest iron ore producer and exporter, presently producing about 30 million tons of iron ore from 3 fully mechanized mines viz., Bailadila Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh State) and Donimalai Iron Ore Mines (Karnataka State) which are awarded ISO 9001-2000 certification.

NMDC has the only mechanized diamond mine in the country with a capacity of 1.00 lakh carats / annum at Panna ( Madhya Pradesh State ). The organization is under the charge of Ministry of Steel, which will continue after the divestment.

As of 31st March 2009, we had 5650 employees producing a profit of INR 6500 Crores ( $1.33 billion). It was categorized as a Navratna (Crown Jewel) in Nov 2008 in preparation for its public issue. The primary Bailadila Ore deposits are supplied to Essar, Ispat Industries and others replacing sponge iron because of their beneficial metallurgy. Others like Kudremukh and Khetri were handed over to third parties to run as independent legal entities ( public or private) the management links its fortune with that of the strong demand led growth of the Steel Industry.

The stock has recently moved from 300 to 375 on news of divestment and has also signed steel companies in Japan and Korea at a long term rate. they signed a JV with Rio Tinto in Aug 2008 to expand their exploration outside India and with South African company Kopana ke Matla for exploration in Africa/SA. The equity base of the company is Rs 396 crores ( $80 million) from a three fold bonus in FY09. NMDC also plans to own 51% of Kudremukh Iron Ore ( KIOCL) for INR 315 crores ( $63 million). NMDC paid a dividend of RS 1200 crores in FY09 ( $240 million)

NMDC is also working with Adani Power, Monnet Ispat and others to plan development of its coal fields. Interestingly, it has also announced plans for a downstream steel plant in Karnataka (10MT) and another in Chhattisgarh (3MT) according to the company MD Rana Som. At present, per capita consumption of steel in the country is 47-50 kg as against the global average of 180 kg. India exported 90 million tonnes of iron ore in 2005-06 out of which 68.5 million tonnes went to China and that exports account for about 60% of Indias iron ore production. (steelguru.com)

[Categories India Infrastructure]

Renuka Ramnath raises multiples | Reuters PE

A private equity fund launched by the former chief of Indias ICICI Venture plans to raise about $500 million, the Economic Times newspaper reported on Monday.Renuka Ramnaths firm, Multiples, has already received financial commitments of $150 million to $200 million from some partners, the paper said, citing the chief executive of an unidentified private equity firm.The commitments are in the process of being formalised and the first tranche of the fund could be in place in less than two months, it said.Ramnath could not be immediately reached for comment.”She plans to raise a shade less than $500 million … her primary targets are pension funds, fund-of-funds and a select group of high net-worth individuals and is looking at 50:50 domestic/international investments ratio,” the paper quoted an unidentified private equity investor as saying.

via Indian PE fund to raise about $500 mln – report| Industries| Financial Services| Reuters.

Infrastructure Stimulus | NY Times

Infrastructure Stimulus (nytimes)

The New York Times > US > Image > Transportation Projects Across the Nation.

Oh, we could have bought up something | Deals

zyakaira notes: sadly, not enough people have invested in the emerging markets or even in the next slice of America in this downturn..don’t they want to buy cheap anymore?

Stock markets rewarded companies such as Johnson & Johnson JNJ.N and Cisco CSCO.O who were brave enough to make acquisitions in the months after Lehman Brothers collapse, a study released on Monday showed.

Although firms who made purchases worth $100 million or more suffered an average 25.5 percent fall in their stock price, they outperformed the wider market by 6.3 percentage points, the Towers Perrin/Cass Business School research found.

Global mergers and acquisitions M&A plunged 40 percent in the first half of 2009 to $941 billion, as shrinking economies, volatile markets and scarce debt hammered corporate confidence. The World Bank forecasts the global economy will shrink 2.9 percent this year.”Companies with M&A in mind should be emboldened by our analysis: fortune favors the brave,” the studys authors, led by Marco Boschetti, wrote.

“Fears that M&A is riskier post-Lehman seem to be misplaced.”Repeat acquirers did even better, on average outperforming the MSCI World Index by 8.1 percent.Among them, Cisco Systems Inc, Johnson & Johnson, Abbott Laboratories ABT.N, BG Group Plc BG.L, and Symantec Corp SYMC.O all outperformed world, regional and sector indexes.However, other multiple acquirers such as Eli Lilly and Co LLY.N, Medtronic Inc MDT.N and Banco Santander SA SAN.MC underperformed on some or all measures.

via Brave post-Lehman M&A rewarded by market -study| Deals| Reuters.

StanChart and ANZ poised to split RBS Asian assets * FT.com Banks

Standard Chartered and Australia’s ANZ are in advanced talks to acquire separate parts of the Asian retail and commercial assets being sold by Royal Bank of Scotland, according to people familiar with the matter.Standard Chartered is now in pole position to acquire RBS units being sold in China, India and Malaysia, while ANZ was closing in on assets in Hong Kong, Taiwan, Singapore, Vietnam and Indonesia, said people familiar with the situation.

The assets are expected to fetch around $1bn-$1.5bn for the stricken UK lender.“The process is progressing well but nothing is yet final,” said one person familiar with the matter.HSBC could also pick up some of the assets, should talks with the other banks fail to reach a successful conclusion, said people familiar with the situation.

RBS put the assets up for sale this year, after posting the biggest loss in British corporate history. The bank, which is 70 per cent owned by the UK government, made a loss of £24.1bn $35.3bn last year and is shrinking its £2,000bn balance sheet.Its regional retail banking platform vastly expanded after the 2007 acquisition of the Asian operations of ABN Amro, which had built up significant branch networks in countries such as China and India.

RBS’s Asian retail assets include 170 branches, including 28 in India and 13 in China.The sale of the Asian assets has been complicated by RBS’ decision to retain its wholesale banking footprint in key regional markets.There has been uncertainty about whether banking authorities in the eight individual markets would rubber-stamp the transfer of branch licences to the potential acquirers, some of whom already boasting large retail networks in countries such as China and India.

A successful conclusion of the talks would transform ANZ’s footprint in the region and bolster its strategy to become a “super-regional” lender. The bank in May announced a A$2.5bn capital raising to fund a potential bid for RBS assets.

via FT.com / Companies / Banks – StanChart and ANZ poised to split RBS Asian assets.

zyakaira notes: StanChart benefits from ANZ not being in a hurry to confront RBI and enter India with a fresh licence, i guess…Also, RBS’ new branches will also become Stamchart. While Stanchart has a large presence in India, they are hardly notable for Wealth Management 😦

Startup shares for Sale — Privately – DealBook Blog – NYTimes.com

Scott Painter makes his living betting on start-up companies, having played a role in launching 29 of them over the years. But with the bad economy choking initial public offerings and acquisitions, Mr. Painter is now backing an idea that makes it easier for insiders like him to sell shares in their companies even before they go public, The Associated Press writes.SharesPost, which was founded by Mr. Painter’s business partner, Greg Brogger, launched publicly in June. Through SharesPost’s Web site, Mr. Painter is trying to sell shares in several companies he helped found, including the car pricing start-up TrueCar.com. He also wants to buy shares in companies that are far from an I.P.O., like the short-messaging site Twitter and business-networking site LinkedIn.SharesPost is one of a few private stock exchanges that are emerging to fight what venture capitalists call a liquidity crisis. These exchanges give stakeholders an alternative way to trade their shares in hot start-ups like Facebook for cold, hard cash — without having to wait years for an I.P.O.Employees at start-up companies often put in long hours but get salaries that can be 20 percent less than their peers at public companies. In return, they get stock or options that they hope will be a path to sports cars and summer homes after their company goes public or is bought out.Given this, services like SharesPost could help startup workers get some cash while awaiting a distant I.P.O. that might never even get off the ground. Most people won’t be in on the action, though, since these exchanges are only open to a small pool of buyers.And it’s not clear how much — or how little — stock has changed hands through them. In its short life, Santa Monica, Calif.-based SharesPost said it has executed one $25,000 transaction, while another service, New York-based SecondMarket, said it has completed about 40 transactions in the past year worth about $150 million.

via Facebook, Twitter and Peers for Sale — Privately – DealBook Blog – NYTimes.com.

Strange Unrest in Insurance FDI

The new Private Sector Insurance guidelines raising FDI limit to 49% have really scared the Indian partners in these firms. The norms now require the public holding after the inevitable IPO to be a minimum 25% and thus the Indian promoter is likely to end up with 26%. However, in the IPO both partners have to sell equally proportions of shares into the market thus leaving ramping up of FDI intuitively to post IPO capital ‘additions’ as the Indian promoters’ equity is actually capped at 26%

In all, this is a simple enough reform as mandated by the market conditions, capital is relatively expensive in our market as also PPP mandates here that we use USD or EUR (or CHF) from abroad Some quick IPOs hitting the market will raise Capital base of these Insurance companies to 3-4 times its current values by a good 2500-3000 Crores from IPOs and the same amount from FDI later

LIC’s equity market investments of INR 40000 crores are also likely to shore up now, given strengthening market conditions and the boo of INR 300000 Crores is now likely to be well capitalised after the IPO brings in a public stake and govt ownership is reduced by the (yet to be public ) 10-15%