Govt clears AOL plan to invest $100 mn

Govt clears AOL plan to invest $100 mn
ENS ECONOMIC BUREAU

NEW DELHI/BANGALORE, MAR 2: The Commerce Ministry has approved on Friday a proposal by America Online Inc (AOL), the world’s largest Internet access provider, to invest about $100 million (around Rs 460 crore) in the country.

The government said in a statement in New Delhi that the company would invest Rs 460 crore (around $100 million) in information technology related products and services over a five-year period. The proposal was among 34 foreign direct investment (FDI) proposals worth Rs 713 crore approved by the government.Company officials say AOL’s investments will help iPlanet E-commerce Solutions, a global alliance between Netscape Communications Corp and Sun Microsystems, to boost its presence in India.

Netscape, which authored the popular Netscape Navigator Internet browser, is owned by AOL Time Warner Inc, which became the world’s largest media company after AOL merged with Time-Warner Inc. “We have not yet received the formal approval from the government,” said Maneesh Dhir, managing director of Netscape Communications India Pvt Ltd. “As we have said earlier, our initial focus here would be on product development.” AOL’s investment comes after Netscape launched Indian operations in Bangalore in December.

Netscape plans to employ more than 100 engineers who will initially develop software products for iPlanet. AOL last year announced a pact with Satyam Infoway Ltd, India’s largest private Internet access provider, to distribute a co-branded version of AOL’s popular instant messaging service.

iPlanet, a provider of e-commerce services and software, now has about 30 customers in India, including state-run Videsh Sanchar Nigam, the diversified Escorts group and market regulator Securities and Exchange Board of India. It has a client base of more than 100 in the Asia-Pacific region.

Other major proposals cleared by commerce and industry minister Murasoli Maran include Australian beer major Fosters India’s application for investing Rs 35 crore in the country. The government has also granted it permission to issue redeemable non-cumulative preference share.

Tata Asset management has also been granted clearance for investing Rs 31.18 crore for carrying out financial advisory services.

Lufthansa Cargo India has been given the approval for increasing its stake from 95 per cent to 100 per cent, involving an FDI inflow of Rs 1.25 crore. Dresdner Kleinworth Benson securities India proposal for issuing non-convertible redeemable preference (NCRPS) and for expansion of activities including investments of Rs 40 crore has also been granted clearance.

FIPB also cleared the Swedish match box maker Wimco’s proposal to issue redeemable cumulative preference shares to the tune of Rs 93 crore. Another Swedish company Sandvik Ab, manufacturer of hot extruded seamless stainless steel, has been given permission to increase its equity from 51 per cent to 100 per cent with an investment of Rs 25 crore.