SUUTI to transfer residual stake in L&T, ITC to govt

SUUTI to transfer residual stake in L&T, ITC to govt 30 Aug, 2008, 0241 hrs IST,

MUMBAI: The residual stake held by the Specified Undertaking of UTI (SUUTI) in corporate majors L&T and ITC will be transferred to the government after March 2009 when the undertaking is scheduled to be wound up, Finance Minister P Chidambaram said on Friday. The FM, who addressed the board of SUUTI and UTI Asset Management Company, said a strategic investor would be inducted into the fund house. This would be done without diluting the public sector character of UTI AMC. “We have reviewed the progress of SUUTI today..by and large they are in the winding up mode now. There will be a chance for residual assets, which will be transferred to the government of India next year,” said Mr Chidambaram. SUUTI was formed well over four years ago after the erstwhile UTI Mutual Fund was bifurcated into two in 2003-04, following a major crisis. All the schemes run by it based on the net asset value (NAV) were transferred to the UTI AMC while the assured return schemes and other assets and liabilities were transferred to a new undertaking, SUUTI. The objective being that once all the liabilities to the untiholders were extinguished, the undertaking could be wound up. While many schemes have been redeemed, some of the assets in the form of the shareholding in L&T and ITC are yet to be sold mainly because of the resistance from the entrenched managements. Mr Chidambaram, after meeting the board of UTI Mutual Fund — the country’s oldest fund house, also said it was looking at inducting a strategic investor. Mr Chidambaram said the efforts were on to bring in a strategic investor in UTI MF without diluting the majority holding of the three banks and LIC. Although UTI AMC had received the government approvals for its $480-million share sale, it deferred its initial public offer plan due to the volatile market conditions. “In our IPO strategy, we had planned to offload 20% through pre-IPO placement to strategic and financial partners. We intend to come out with our IPO at a later stage as market conditions improve. In the meantime, we are exploring various ways to bring in a strategic partner without losing UTI’s public character,” said UTI Mutual fund chairman and managing director UK Sinha. Meanwhile, the board of SUUTI on Thursday has appointed ICICI Securities, JP morgan and Citigroup as the bankers to sell a part of the equity holdings it controls in Axis Bank. SUUTI holds 27% in Axis Bank, the third-largest private bank in India. Officials said SUUTI will offload its 21% in Axis bank the way shares of IOC were sold in the secondary market. However, the entire chunk of equity cannot be offloaded as there is a lock-in clause on 6% of the equity, following an earlier QIP. SUUTI holds around 12% in ITC and 9.04% in L&T. SUUTI has already redeemed Rs 21,000 crore worth of funds to around 15 lakh investors and this year, under the US-64 scheme, it distributed Rs 6,800 crore to around 11 lakh investors.

Tata cuts Land Rover output as slowdown bites

Tata cuts Land Rover output as slowdown bites 30 Aug, 2008, 0150 hrs IST, AGENCIES

doweshowbellyad = 0; Some cool car technologies LONDON: British automaker Land Rover, recently taken over by Tata, told its employees on Friday it will scale back production in light of an economic slowdown and the credit crunch. A spokesman for Land Rover — a specialist in four-wheel-drive vehicles — declined to spell out the scale of the cutbacks in detail, besides stating that only a “small percentage” of its annual output would be affected. It was a matter of adjusting supply and demand, and averting a costly backlog of unsold vehicles, he said, in light of “very difficult” market conditions in Britain and the United States. From September until the end of the year, the Discovery and Land Rover Sport models will be assembled four days a week, rather than five, while night-shift production of top-end Range Rovers will be halted in October. Formerly a part of US auto group Ford Motor Company, Land Rover was acquired in June by Tata along with the upmarket Jaguar car brand, in a deal that has so far seen no layoffs. Land Rover employs around 5,000 people at its Solihull plant in the English Midlands.