Dec
31
ONGC To Acquire Imperial Energy - Shareholders Approve The Deal
Filed Under Indian Companies, Energy, India Business | Leave a Comment
Indian Energy Giant — Oil and Natural Gas Corp (ONGC) — has made a timely European acquisition: Imperial Energy.
Imperial Energy is based in Leeds, UK and owns oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.
The ONGC has taken control of Imperial Energy Plc for GBP 1.3 billion (USD 1.9 billion) after an overwhelming 96.8% shareholders of London-listed Imperial Energy accepted the ONGC takeover offer.
The deadline for the state-owned firm’s 12.50 pounds per share offer closed yesterday and 99,241,110 or 96.8 per cent of the shares were tendered, ONGC Videsh Ltd (OVL) informed the London Stock Exchange.
OVL needed 90% shareholders to approve the deal, and got 96.8% approval. Imperial Energy will be delisted from from the London Stock Exchange pays in cash to the remaining 3.2% shareholders who were not in favour. The entire acquisition and subsequent delisting of Imperial Energy may take two to three weeks — which is quite fast by most standards.
ONGC Chairman R S Sharma said:
“ONGC ows the acquisition to government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam. This is the biggest overseas ever acquisition by OVL.”
OVL will fund the transaction through a combination of loans from the parent company (ONGC), wherein ONGC would lend USD 1 billion to fund the transaction at 5.96 % interest rate.
In 2003, OVL paid USD 1.7 billion to buy 20% stake in Exxon Mobil Corp’s Sakhalin-I field in Russia and USD 785 million for a stake in the Greater Nile project in Sudan.
Analysis & Projection: The weak UK pound and the better market capitalization of Asian companies could see more such takeovers in Energy and other sectors too.
Nov
8
India vs China- Comparison on E-Commerce potential
Filed Under Energy, Healthcare, Indian Companies, Training & Education, India vs China, Internet in India, Mobile Telecom, Intellectual Property, New Media, E-Business, India Investment Opportunities | Leave a Comment
The two giant Asian economies are competing on every front to be the biggest one in the world. One significant aspect of this race lies in E-Commerce. Both these economies are expected to have more Internet users than the U.S. by 2010.
While India got its first taste of Internet in 1986, establishing ERNET, China got Internet connectivity as late as 1993. But within one year it had 3.5 times as many Internet users as India. Despite the huge difference in numbers, the Economist Intelligence Unit (EIU) puts India in the group of “E-business followers” and China in the group of “E-business laggards”. The most apparent reasons for this difference are the government policies. China has only one guarded access to the World Wide Web. Internet users cannot access a range of foreign web sites. Domestic web sites are checked at the source through a registration process and content monitoring. This has hampered adoption of the Internet for a variety of commercial uses.
In India, on the other hand, while the government has been criticized for its late awakening to cyber laws, the initial un-monitored period proved a boon for E-Commerce. Though post 2000, India has taken measures to keep a check on the happenings on the Internet. A report by the Electronic Privacy Information Center (EPIC) discusses Indian government’s efforts to compel users to disclose keys or decrypted files to government agencies. Also, India’s IT Bill has a special section on offences dealing with the publication or transmission of “obscene material”.
Table 1: Relative advantages and disadvantages of China and India in Internet Development
|
|
Relative advantage |
Relative disadvantage |
|
China |
Higher per capita GDP |
No e-commerce and digital signature |
|
Higher investment in telecom sector resulting in higher tele-density |
||
|
Higher international bandwidth |
Control on Internet content |
|
|
Self-dependent in most IT products |
||
|
Cheaper Internet access rates |
||
|
India |
Well-developed private sector with both |
Less Political leadership to create an E-Business hub in India. |
|
Democratic tradition and transparent legal system |
Stifling bureaucracy and red tape (though much reduced than 10 years back) |
|
|
Large middle class aware of global brands |
||
|
Large English speaking work force |
Higher illiteracy rate |
|
|
Extensive networks of contacts created by expatriates |
||
|
World leader in software development and IT services |
Numerous different languages to be addressed to reach the full range of population |
Factors such as larger population, higher per capita GDP, indigenously produced IT products, well-developed data network, and higher international bandwidth make Chinese market more attractive for several e-commerce applications. The penetration rates of mobile and broadband technologies in China. In particular, China has a bigger market for applications such as stock trading and financial transactions. China’s recent entry in the WTO has further increased its telecom and Internet development potential. However, unlike India, China does not yet have formal laws to govern e-commerce transactions and companies have to rely on conventional laws in case of disputes.
On the other hand, availability of 50 million intelligent English speaking workforce at cheap rates, a large proportion of that being computer literate, make India an attractive place for outsourcing. Companies located in developed countries can significantly reduce their operating costs by employing Indian tele-workers in less critical steps of the value chain such as back-office services as well as in higher value-added services such as design and engineering and education. The upcoming bandwidth boom in India will further increase the tele-working potential by enhancing the quality of telecom services.
Since a large proportion of Chinese view information written in Chinese language, the best way to target Chinese Internet users is to provide content in Chinese language. Whereas about 50 million of Indians are fluent in English, remaining 950 million speak more than 500 different local dialects and the success of a company is a function of its ability to identify the linguistic segments that can be served profitably. But for any company looking to enter, it does put India at a severe disadvantage.
Unlike in western countries, most of the transactions in China and India are conducted on cash basis and thus e-commerce companies are required to provide alternatives such as cash on delivery, wire transfers and checks to facilitate e-commerce. This is quite different from the west, where plastic money has been in use for long, and online transactions have more or less been accepted as safe.
