People Will Talk

The way that I have been highlighting Ramunia's love life makes it seem like I have a big axe to grind with some people at Ramunia. Well no, I don't know anyone at Ramunia, never had shares even. In fact, I wrote very positively when MISC first proposed to acquire Ramunia. So, its just the facts, ma'am, just the facts.

Today was a ding ding wayang kulit peformance by Ramunia's share price. Why? Well, maybe this excerpt from Indian Oil & Gas would give a hint:

ONGC To Terminate $ 683 M Contract Awarded To Ramunia
Oil and Natural Gas Corporation (ONGC) issued a letter to Ramunia of Malaysia on May 14 stating that the $ 683 million contract awarded to it three months ago for the turnkey execution of B-193 project in Mumbai offshore will be terminated unless it submits performance bank guarantee by May 15,2008.
As there are no prospects of Ramunia meeting this deadline, ONGC will announce the termination of the contract in the next 24 hours. Banks have already told about encashment of the bid bond of $ half a million during the banking hours of May 15. Ramunia’s latest offer to sign an MoU with Indian construction company, Nagarjuna Construction, and Iranian company, IOEC, to execute the project was not acceptable to ONGC. IOEC does not enjoy any credibility in India.
The next step will be to disqualify Ramunia from participating in any future tenders of ONGC. Ramunia was the lowest bidder in the tender for B-22 project. L&T has challenged the Delhi High Court intervention which went in favour of Ramunia whose price bid was not opened by ONGC on the ground that it violated tender guidelines of the company. Even if the Supreme Court upholds the verdict of the Delhi High Court, ONGC will not be in a position to award the contract for B-22 project to Ramunia. Inevitably, ONGC will be opting for re-tenders for both the projects.

Ramunia was a relatively unknown company till it outdistanced other engineering majors in Indian tenders. It quoted incredibly low prices, a strategy which Hyundai adopted during its initial years foray into Indian market. The present boss of Ramunia, Dr Daniel C.S. Ahn, was an old Hyundai hand but his latest strategy failed because Ramunia is not Hyundai. A disqualification by ONGC can be disastrous for Ramunia if it has overseas ambitions. It amounts to a loss of face for Dr Ahn.

"ONGC Initiates Blacklisting Process, Contract Awarded To Ramunia Terminated". The fact is that the contract termination notice was served on 16th May 2008. In case of B-22 project, ONGC has refused to play ball with Ramunia and considering retender.

p/s photo: Irin Gan