SAMTEL GROUP: IMPERFECT PICTURE

Article Abstract:

The Samtel group has failed to live up to the expectations of investors. The public investment in the Samtel group has declined to 38 percent of the original amount. The group comprises of three listed companies - Samtel Electron Devices Ltd (SEDL), Samtel Colour Limited (SCL) and Samtel (India) Ltd (SIL). Of the three listed companies, SCL and SIL are loss making companies. SEDL is the only profit making and dividend paying company in the group. The promoters of the Samtel group plan to merge SEDL with the loss making SCL effective April 1, 1997. The promoters hold 66 percent stake in SCL and 35 percent in SEDL. The proposed amalgamation will partly cushion the losses incurred by SCL. Post merger, SCL's actual loss of Rs84.8 million for 1997-98 will turn into a Rs15 million profit. For the six months ended September 1998, against actual loss of Rs77.6 million incurred by SCL, the post merger loss will be just Rs19.1 million. The shareholders of SEDL are likely to be allotted 170 shares of SCL for every 100 held in SEDL. SEDL supplies electron guns to SCL, which is used to produce colour picture tubes. SEDL posted a net profit of Rs58.5 million on sales of Rs364.4 million for the first half of 1998-99 while SCL incurred a loss of Rs19.1 million on a sales of Rs2,498.9 million. Post merger, the Samtel group will have two listed companies, SCL and SIL, both loss making and non-dividend paying companies. The proposed amalgamation will benefit the promoters at the expense of public shareholders. (rk)(vr)

United States, All Other Nondepository Credit Intermediation, Financial Institutions NEC, Financial institutions, Samtel Group

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PROGNOSIS-1999: QUIET STANDS THE WORKSHOP

Article Abstract:

Steel producers of the world are losing $60 billion a year, which may result in stoppage of electric arc furnace operations. Imports from Asean (Association of South-East Asian Nations) countries have fallen as the attention has shifted to developed countries. Indian steel may replace that of Japan and Korea in Europe due to its high quality and cheaper price. Thin slab casting units are likely to benefit by such a switch. The Indian steel industry may revive in 1999 only through greater domestic demand. The revival of the economies of south-east Asian countries, increase in domestic demand, growth in production and rise in the price of steel globally may revive the Indian steel industry. Essar Steel has stated that the consumption of steel increased by 3 percent in the first half of 1998-99. The consumption of flats rose by 2.7 percent and longs by 3.6 percent. The floor price mechanism has helped the hot-rolled coil segment in India. Imports of seconds have decreased and Indian producers plan to hike the price by Rs1,500 per tonne. The demand for steel is likely to grow as infrastructure projects are coming up in Maharashtra and Andhra Pradesh. (rk/kvr)

Iron and Steel Mills, World, Raw Steel

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