Infosys to acquire US BPO company for $38 million

BANGALORE: Infosys Technologies on Thursday announced its second acquisition in the BPO space. The company will acquire Atlanta-based McCamish


Systems for $38.2 million (about Rs 180 crore).

Amitabh Chaudhry, CEO of Infosys BPO, told TOI that the deal makes for great synergy as six of the clients that Infosys and McCamish work for are common to both. And all of them are big names in the insurance space. The entire buy-out process will be completed in the next 30 to 40 days. "The deal will have a reflection on our Q4 BPO revenues, adding about $7 to $7.5 million,'' Chaudhry said.

As per the agreement, Infosys will have to pay an additional $20 million to the McCamish sellers if McCamish achieves certain financial targets in the future.

‘‘The acquisition will enhance our capability to deliver end-to-end business solutions for the insurance and financial services industries. It will establish Infosys BPO as a key player in business platform services for those sectors,'' he said.

Most of the big Indian BPO players are rapidly expanding their presence around the globe to tap into new clients, get varied language expertise and offer services from locations that customers are most comfortable with.

Gordon Beckham Jr, CEO of McCamish Systems, said that the combination is expected to enable McCamish to service larger portfolios of transactions for clients and expand into global markets.

McCamish Systems was founded in 1985. The company posted revenues of $38.2 million during calendar 2008. It employs 260 employees at its Atlanta delivery centre.

In October 2007, Infosys had acquired three finance and accounts BPO centres of Royal Philips Electronics in India, Poland and Thailand at a cost of $28 million. The acquisition had also come with a $250-million contract from Philips.

Infosys BPO operates in India, the Czech Republic, China, the Philippines, Poland, Thailand, Mexico and Brazil and employs over 16,400 persons. McCamish gives it a presence in the US now. During fiscal 2008-09, Infosys BPO had revenues of $316.2 million.
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ASHWANI SUHALKA PGDM 2nd Yr

AI gets Rs 2000cr lifeline

NEW DELHI: The cash-strapped Maharaja will not go bankrupt, at least for now. The government on Thursday agreed to inject Rs 2,000 crore in AI this


fiscal in a phase-wise manner of Rs 400 crore per month, subject to the airline cuts costs and increases revenue. The Pranab Mukherjee-headed Group of Ministers (GoM) met on Thursday and decided to do a monthly review of AI's performance before giving the next tranche of Rs 400 crore.

Without a bailout, the AI-IA combine — that has a monthly cash loss of Rs 400 crore — may not have survived beyond this year. The aviation ministry was eying Rs 5,000 crore and Rs 9,000 crore as equity infusion and aircraft purchase assistance over next three years. But the GoM has for now agreed to recommend to the Union Cabinet phase-wise infusion of fund till March 2010. Future funding will be decided on AI's progress card.

GoM's biggest worry was how deep-in-red AI would fund the Rs 55,000 crore order to acquire 111 new aircraft. The civil aviation ministry pointed out that AI-IA combine's aircraft order size has been halved in value terms.

"Out of the 111 new planes, 50 were wide body aircraft that accounted for over 65% of the total bill. Of these big ones, 27 Boeing 787 Dreamliners are nowhere on radar as they are yet to fly. Delivery of three Boeing 77 have been deferred to 2013 and three of them — already with AI — are being leased out. So, the aircraft order in terms of monetary value has been halved with these 33 twin aisle planes out of the radar," said sources.

Both Mukherjee and Chidamabaram are learnt to have been sceptical of AI's tall claims on revenue and cost fronts. "Employees must know this money has not come easily and focus on cost-cutting has to remain," they are learnt to have told Patel and the AI management. Patel told TOI: "A number of steps will be taken to cut costs by rationalising routes and leasing aircraft. Cutting salaries is not the only way to cut costs and the management must look at all other means very closely. There is no room for complacency as fund infusion is closely linked to achieving success on cost cutting and revenue generation."

The GoM is also learnt to have promised Arvind Jadhav, CMD, certain degree of freedom to take tough decisions without any interference. In a previous GoM, Chidambaram had questioned the accountability of bureaucrats who headed AI in the past and presided over its decline.

"By early January, a number of tough steps will be taken. This will be in terms of cutting loss-making routes and instilling discipline," said highly-placed sources. AI loses Rs 3,000 crore on 30-odd routes alone and most of them could be closed.
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ASHWANI SUHALKA PGDM 2nd Yr

IIMB gets 180 slot zero offers, highest across IIMs

BANGALORE: The Indian Institute of Management Bangalore has bagged 180 "slot zero" (the first two days) offers for the batch of 348 students for
year 2010, the highest across all IIMs for summer placements. "The entire batch of 348 students, the biggest ever batch at IIMB, was placed within a span of five days by over 150 companies, with as many 180 slot zero offers being made, the highest across all IIMs", Prof P D Jose, chairperson of the placement committee, told reporters. More than 50% of the batch was placed by the end of Slot Zero (the first two days of placement offers). The major recruiters included Goldman Sachs, Citi, HSBC, ABG, Nomura, Bain & Co, Standard Chartered, A T Kearney, Boston Consulting Group, McKinsey & Co, Credit Suisse, Macquarie, Merril Lynch, Morgan Stanley, J P Morgan and Barclay's Capital. Recruiters from Sales & Marketing formed the major chunk (21 per cent) as a result of more number of FMCG companies this time, followed by Investment Banking (19 per cent), finance (16 per cent), consulting (15 per cent), general management (12 per cent), IT (9 per cent) and private equity (three per cent). "There was a welcome jump in Investment Banking this time compared to last year (14 per cent). It was Investment Banking which occupied the top slot last time as far as recruiters were concerned", Jose said. Eighty-nine major offers were made with the highest from Goldman Sachs (13), closely followed by Citi and HSBC (nine each).

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ASHWANI SUHALKA PGDM 2nd Yr

Gas row: RIL says RNRL can't trade in gas

NEW DELHI: Mukesh Ambani's RIL on Wednesday told the Supreme Court that the demerger scheme worked out with his brother Anil Ambani was categorical
that the gas supplies from the KG Basin to his group was not for trading and meant for promoting power generation plant. "The real purpose of supply of gas to the Anil Ambani firm was for promoting electricity plant and not promoting trading in gas," senior advocate Harish Salve, appearing for RIL, told a Bench headed by Chief Justice K G Balakrishnan. "The idea was to promote power distribution and transmission company... Clause (2) of the family MoU which the demerger scheme picks up as an important clause deals with promoting power plant and not for making money on trading of gas," he submitted before the Bench, also comprising Justices B Sudershan Reddy and P Sathasivam. Anil Ambani's RNRL had sought immediate supply of gas as per the Bombay High Court order of July 15. This was opposed by RIL which said the gas was meant for the proposed plant in Dadri in U P which had not come up and not for trading. The Ambani brothers are locked in a bitter battle over the supply and price of the gas from KG basin. While RNRL is seeking gas at a committed price of $2.34 per unit, RIL says it cannot honour the commitment made in the family agreement due to government's pricing and gas policies. RIL, which has maintained that the family MoU of 2005 could not be the document for arriving at suitable arrangement for the supply of gas, said it (MoU) only sets down the "road map and guidance" on how things were to be worked out.

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ASHWANI SUHALKA PGDM 2nd Yr

Manmohan, Obama to take India-US ties to new level: Envoy

WASHINGTON: When Prime Minister Manmohan Singh visits the US this month, he and President Barack Obama will create a framework to take their already

"comprehensive partnership of mutual trust and confidence" to "a new level", according to the Indian ambassador here. "We are at an exciting moment of hope and opportunity as Prime Minister Singh and President Obama prepare to build on the progress we have made to take the relationship to a new level," Meera Shankar said in a keynote address at the prestigious James Baker III Institute for Public Policy at Houston's Rice University Friday. "The heart of their effort will be to create a framework that unleashes the energy and the enterprise of our people - to build a relationship that will make our nations safer and more prosperous but also help to address the global challenges that we face," she said. Manmohan Singh is arriving here Nov 24 on what is the first official state visit hosted by President Obama - considered a signal honour for India and showing the deep respect he has for the Indian prime minister. Through the terms of Democrat Bill Clinton and Republican George Bush, the two governments invested extraordinary political capital in transforming their relationship, which culminated in the historic civil nuclear agreement in October 2008, Shankar said. The nuclear agreement "that has been as much a symbol as an instrument of the transformation in our relationship" with an "extraordinary breadth of our engagement (that) has taken us into, hitherto, uncharted territories, including defence, intelligence and counter-terrorism cooperation", she said. "I can't think of a field of human endeavour, where we are not breaking new grounds and re-defining the paradigm of our engagement. "Today, the India-US relationship has evolved into a truly comprehensive partnership of mutual trust and confidence, intensifying political dialogue that is increasingly global in reach, and deepening strategic understanding," Shankar said. Shared democratic values and converging security interests, especially in the context of Asia and the new unconventional threats that are growing, had led them to seek a closer relationship, Shankar said. However, "the real wind in our sail has been the tremendous growth in our economic partnership and the ties between our peoples", she said. Just in the last five years, India-US trade doubled and US exports to India grew three times. A new phenomenon in recent years has been the surge in Indian investments into the US, she said, noting that on the basis of annual flows, these now exceed US foreign direct investment into India. "As we enter a new phase in our relationship, at a moment of great global economic uncertainty, our economic partnership will be a new source of strength in our relationship." Shankar said.

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ASHWANI SUHALKA PGDM 2nd Yr

US offers Iran to keep uranium stockpile with Russia

WASHINGTON: Broadening its offer, the US has said it would allow Iran to keep its stock of enriched nuclear fuel with several nations, including Turkey, for temporary safekeeping, official sources said.

With Iran yet to agree to earlier offer from western powers asking it to keep its uranium stockpiles with Russia, the US has now proposed to send Iranian uranium to Turkey, the New York Times reported today saying this had been confirmed by the IAEA chief Mohamed ElBaradei.

Citing unnamed administration officials, the report said that the overtures to store uranium with Russia have been ignored. Instead, Tehran has revived an old counterproposal that calls for international arms inspectors to take custody of much of their fuel, but keep it on Kish, a Persian Gulf resort island that is a part of Iran.

An offer rejected by Washington fearing a repeat of 2003 when North Korea had converted its fuel into the material for several nuclear weapons.

A senior Obama administration official said that Iran's proposal had been rejected because leaving the nuclear material on Iranian territory would allow for the possibility that the Iranians could evict the international inspectors at any moment, the paper said.

The official also said that they had now all but lost hope that Iran would follow through with an agreement reached in Geneva on October 1 to send its fuel out of the country temporarily.

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ASHWANI SUHALKA PGDM 2nd Yr

Mittal's daughter-in-law to buy fashion house Escada

NEW DELHI: Megha Mittal, daughter-in-law of India-born billionaire Lakshmi Mittal, will buy insolvent Escada, an iconic European luxury fashion


house, for an undisclosed amount.

Megha Mittal on Friday confirmed that her bid for Escada has been accepted. "Our first priority is to ensure that the great heritage of this iconic company is translated into a strong and successful future," she said.

Escada, an international fashion group for women's apparel and accessories has 182 own and 225 franchise shops in more than 60 countries. Earlier, in August the iconic fashion house filed for insolvency after declining sales had a negative impact on the balance sheet of the company.

"Despite recent difficulties, Escada has the potential to redefine its place in the world of luxury brands and become synonymous with fine quality and elegance," Mittal said.

The board of management (of Escada) and the new investor (Megha Mittal) have agreed to cooperate on the basis of the business strategy launched in mid-2008 securing continuity of the operative business, Escada said in a statement.

"The insolvency administrator of Escada AG has signed a sale and transfer agreement with one of the Mittal Family Trusts," Escada said, adding that the preliminary creditors' committee has approved the transaction.

Mittal supported the current CEO of Escada and said, "I am confident that under the leadership of Bruno Salzer, we have the right team to achieve this."

Under the agreement, Escada AG's business operations, including employees as well as worldwide brand rights, production facilities and the sales and distribution structure to the Trust.

The said transaction would be subject to customary antitrust approvals.

The statement added that "with the execution of the agreement all key assets of Escada AG's operative business as well as shares in Escada AG's subsidiaries will be transferred to the Trust."

However, subsidiaries, which serve as guarantor for the Escada bond would be excluded from the said agreement.
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ASHWANI SHALKA PGDM 2nd Yr

Birlas to foray into hotel industry

KOLKATA: For the first time in their close to 100-year history, the Birlas are entering the hospitality arena. The Birla Group - a part of corporate


folklore in the country, along with the Tatas - is going to set up its first hotel on a closed mill plot in Mumbai.

Although the Birla empire - spread across the various family groupings (BK, AVB, KK, CK, SK, Yash and MP Birla groups) - pretty much covers the entire business spectrum, from textiles, metals and cement to automobiles, tea, IT and media, the Birlas had never tried their hand in the hotel arena.

Basant Kumar Birla, the oldest member of the Birla family, told TOI that his group has decided to set up a luxury hotel near Worli, in south Mumbai, on unutilised land belonging to Century Textiles & Industries. "We will not run the hotel. Five big groups from India and abroad have approached us for managing it. We will get a fee, which will be revised every three years," Birla said.

The group may also use the land for commercial real estate, the industry doyen said. "We want to optimise the value of the land belonging to Century Textiles. The value will appreciate if we develop it. We will not sell the land. The company will return 15-20% of the land to the state government, as per rules, and the rest will be developed," he added.

Century Textiles senior president R K Dalmiya said the mill has been shut since 2006. "All the mills in the area are closed for environmental or other reasons. The mill occupies 40 acres, of which we own 30 acres. The balance is lease-hold land for which the group has an existing 999-year lease with the Wadia Group," he said, adding that a Singapore-based architectural firm has been appointed as adviser for the hotel project.

Century Textiles has already set up an advanced greenfield textile mill with an investment of Rs 850 crore at Bharuch in Gujarat. The mill was inaugurated by Gujarat chief minister Narendra Modi in the presence of B K Birla and his grandson Kumar Mangalam Birla (chairman of AV Birla Group) in October. "The new mill alone will take care of most of our requirements," Dalmiya said.
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ASHWANI SUHALKA PGDM2nd Yr