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New Delhi, Sept 19: The Foreign Investment Promotion Board (FIPB) on Saturday cleared foreign direct investment (FDI) proposals worth Rs 2,000 crore, including two mega projects of Reliance and BHP of Australia. The board approved a $950-million proposal of the Reliance group to set up a global mobile personal communication systems (GMPCS), FIPB sources said.
The approval is for bringing in Rs 660 crore as foreign equity in the project from multilateral agencies, foreign institutional investors (FIIs) and equipment suppliers. The foreign equity would amount to 49 per cent with the Ambanis holding the rest. However, sources said the nod was only from the foreign investment angle and the proposal was subject to clearance by the inter-ministerial licensing committee including the defence ministry and space department among others.
Diversified Australian giant BHP's proposal to set up a holding company with an equity investment of Rs 1,050 crore also received FIPB clearance.The wholly-owned holding companywould invest in various downstream ventures in petroleum, LNG and mining sectors. The downstream ventures would be subject to FIPB clearance, wherever applicable, sources said.Reliance will operate the GMPCS through a constellation of satellites by either hiring or purchasing the satellites.
Another GMPCS project promoted by Indonesian company Aces has also been given the go-ahead by FIPB, subject to the company procuring a licence to operate.
The total project cost would be Rs 120 crore of which Rs 29.4 crore would come in the form of foreign equity. The sector has a foreign equity cap of 49 per cent.
Sources said the project cost of Aces worked out to be much lower than Reliance as the company would be hiring all the satellites.The board, however, deferred two media projects since the information and broadcasting (I&B) ministry was in the process of finalising the policy on the maximum permissible limit of foreign investment.
The proposals of Goldman Sachs, Cargill Asia Pacific, South African mininggiant De Beers and state-owned undertaking Balmer Lawrie were also deferred.The board allowed stock broking firm HSBC Securities to hike its stake to 75 per cent from 72 per cent by bringing in foreign investment of Rs 20 crore, sources said.
James Capel of UK will be hiking its stake in HSBC Securities through optional and fully convertible debentures. Balmer Lawrie's proposal to divest its 50 per cent stake in favour of its joint venture partner Fusch Ltd was deferred, pending the nod of the administrative ministry since it involved disinvestment of government stake.
The FIPB also cleared a couple of proposals for renovation and modernisation of power projects, including Babcock Wilcox and Itochu. A proposal from Walden Nikko of Mauritius to pick up 39 per cent stake in Globsyn, a software company specialising in Y2K solutions, was also cleared. Goldman Sachs' proposal for amendments in its equity structure was deferred since it did not meet the minimum capitalisation norm of $5 million set by theRBI.Cargil Asia Pacific's proposal was also deferred due to similar reasons, sources said.
The proposal of De Beers to extend its mining activity was also deferred to give more time to the mining ministry to study it. De Beers already has muliple approvals for mining diamond.
Sources said Tower Insurance, which had earlier applied for FIPB clearance, withdrew its application as the company could not come to an agreement with its Indian partner.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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