Tag Archives: Insolvency

SBI cuts lending rate, Rupee hits a 3-year high, CDB withdraws insolvency proceedings against RCom- Weekly Digest #59

Monday- 1st January 2018

  • China’s e-commerce giant Alibaba to acquire a minority stake in logistics company XpressBees for an estimated amount of $100 million as it looks to break into Indian markets to compete with global rival Amazon, and homegrown rival Flipkart.
  • BoB failed to sell bad loans amounting to ₹2,300 crore due from Bhushan Steel and Essar Steel as the reserve price was above market rates and only overseas investors and private equity funds were allowed to bid.
  • SBI gave a new year gift to its borrowers as it lowered the base rate by 30 points to 8.65%. The move is expected to prevent rivals from poaching the existing customers.
  • SBI to initiate insolvency proceedings against at least a dozen defaulting companies including Visa Steel, Monnet Power, Uttam Steel, Essar Projects, Videocon Telecom, Jaiswal Neco and Jai Balaji after failing to recast their loans by the December 31 deadline.
  • Following the steps of IOB,  Axis Bank to put its ₹2,000-crore loan to Bhushan Steel up for sale in the distressed-assets market. The bank may get as much as ₹1,200 crore.

 

Tuesday-  2nd January 2018

  • India’s largest retailer, Future Group is in talks with Snapdeal to acquire its logistics arm, Vulcan Express for about ₹50 crore in an all-cash deal.
  • Tata Technologies, a subsidiary of Tata Motors, suspended some of its employees for allegedly issuing forged letters of employment to 60 people.
  • The rupee hit its highest level against the dollar as it closed at 63.48 a dollar, up 0.31% from its previous closing.

 

Wednesday-  3rd January 2018

  • The RBI has ordered banks to recalibrate ATMs to ensure that more numbers of the ₹200 denomination note are dispensed to the public in a move to step up the supply of lower-denomination currency.
  • The RBI has ordered the banks not to initiate bankruptcy proceedings against Jaiprakash Associates. This comes amidst anticipation of legal complications after a Supreme Court ruling barred its promoters from selling or transferring assets.
  • South African Internet group Naspers has emerged as the frontrunner for an estimated $200 million investment in Swiggy. The investment is expected to increase the valuation of the food delivery venture to $650 million.
  • Online retailer Flipkart has infused approximately ₹1,632 crore into its logistics arm Ekart in an effort to further strengthen its delivery and warehousing capabilities.
  • Warburg Pincus India managing director Nitin Nayar has resigned from his position to launch his own investment fund with an expected corpus of $150-200 million, focusing on technology-related bets.

Thursday- 4th January 2018

  • India’s top seven Bitcoin exchanges including Zebpay, Unocoin, CoinSecure and BtcxIndia, to approach the AAR for clarity regarding levy of GST on transactions relating to Bitcoins.
  • After receiving criticism over exorbitant salaries paid to top executives, Infosys has crafted a transparent compensation package for the new CEO, Salil Parekh. He will be eligible for a fixed salary of ₹6.5 crore and a variable pay of ₹9.75 crore, which is much lower than what his predecessor was offered, i.e. ₹70.4 crore.
  • As a part of the ₹500-crore pre-IPO fund raised by EtechAces, it has committed an amount of ₹200 crore for its subsidiary; the digital marketplace for loans, mutual funds and credit cards, Paisabazaar.
  • Idea Cellular to raise a total of ₹6,750 crore ahead of its merger with Vodafone India to pare debt and free up cash for expansion. The amount to be raised in two tranches, by raising ₹3,250 crore through preference shares in first and balance ₹3,500 crores through preference shares @₹99.50.

Friday- 5th January 2018

  • The rupee gained 0.06% to 63.37 per dollar to a near three-year record on Friday as overseas investments flooded into India amid global dollar weakness.
  • Executive Chairman of Religare Enterprises, S Lakshminarayanan, a retired IAS officer and independent director Kishori Udeshi, a former RBI deputy governor resigned from the board of the company.
  • Rohit Gothi, executive director of market operations at beverage maker Coca-Cola’s bottling partner has resigned from his position after the company announced a large-scale restructuring of its business, which would make some jobs redundant.
  • CDB has withdrawn its insolvency filing against RCom. However, Swedish gear maker Ericsson to its battle against the Anil Ambani-owned telecom operator to recover its dues of ₹1,150 crore.

 

Source: The Economic Times
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LIC’s investment cleared, Market stays sluggish, Discontent against IBC tweaks -Weekly Digest #54

Monday- 27th November 2017

  • Finance Ministry of India has confirmed that LIC’s proposed investment ₹1.5 lakh crore in the Indian Railways. Earlier, concerns were raised regarding that it would take LIC’s exposure to more than 25% of IRFC’s net worth.
  • Goldman in its year-end forecast predicted that India’s economic growth will touch the mark of 8% in FY19 as it expects the effects of demonetisation and GST to wear off due to the formalisation of the economy, strong global growth and recapitalisation of public sector banks.
  • PNB to raise over ₹1,324 crores by selling off its 6% stake in PNB Housing Finance in an OFS for ₹1,325 per share.
  • China Development Bank (CDB) has filed an insolvency petition against RCom in the bankruptcy court to recover $1.78 billion which amounts to 37% of its total secured debt.
  • Essar group sold its BPO business Aegis for about ₹2,000 crore to Capital Square Partners to raise funds to monetise assets and trim debt.

 

Tuesday-  28th November 2017

  •  CPP Investment Board to acquire 15% stake in ReNew Power Ventures for $350 million making it the third largest investor in the company.
  •  The Bharat 22 Exchange Traded Fund made a steady debut at 3.8% over the issue price. The ETF closed at ₹37.33 over its issue price of ₹35.97 a piece.
  • A group of promoters of defaulting companies have approached the SC against the move to prevent promoters of defaulting companies to buy back assets at discounted prices under IBC as it prevents them from settling dues of creditors.
  • SoftBank Group Corp is offering to purchase shares of Uber Technologies at a valuation of $48 billion, a 30% discount to its most recent valuation of $68.5 billion

 

Wednesday-  29th November 2017

  • The Insolvency and Bankruptcy Board of India (IBBI) to allow lenders to act against individuals, including promoters of companies, who have given personal guarantees to corporate loan defaulters by encashing their personal assets.
  •  Jet Airways and Air France-KLM signed an agreement that will former an unrestricted access to Europe and North America. It is likely to reduce the scope of its existing partnership with Etihad Airways.
  • The Overseas Private Investment Corporation (OPIC), a financial institution of the US government, has proposed $1 billion investments in infrastructure and lending projects in India.

 

Thursday-  30th November 2017

  • Owing to fiscal deficit t readings for the April-October period and SBI’s move to raise bulk deposit rates, the stock market tumbled with the Sensex falling 453 points to 33,149 points while the Nifty fell 135 points to 10,227 points.
  • UIDAI has asked Airtel to explain its actions of allegedly opening bank accounts of its customers without their informed consent. The company has been given the deadline of December 4th to respond.
  • RCom said that majority of its lenders have decided to oppose CDB’s insolvency filing to recover its $1.78 billion debt. It is a=inviting the bank to have an open discussion regarding the debt.
  • Shares of tea producer McLeod Russel recovered 21% from its intraday low to touch a 52-week high of 248.30 after its promoter announced that he has sold 1 crore shares, representing 9.14% stake in the company to Nomura at ₹205.09.
  • IFCL has filed an insolvency petition against Reliance Naval and Engineering Ltd at NCLT Ahmedabad.

 

Friday- 1st December 2017

  • RIL chairman Mukesh Ambani, responded to Sunil Mittal blaming Reliance Jio Infocomm for the telecom industry’s woes by saying “there’s no need to cry so much.”
  • Japanese car maker Nissan Motor has initiated a lawsuit against India, seeking more than $750 million in supposedly tax incentives owed to it since 2015 by Tamil Nadu state government. However, the state has said that there has been no default and these are pressure techniques.
  • Harish Salve, one of India’s highest-paid lawyer to charge Re 1 to represent the Enforcement Directorate in a court case involving alleged money laundering by Sterling Biotech Ltd.
  • The stock market declined for the fourth consecutive session as investors brushed aside the strong GDP reading for the Q2. The Sensex dropped 316 points to 32,833 while the Nifty declined 105 points to 10,122 points.

 

Source: The Economic Times

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IBC Tweaks approved, GST benefit ensured, E-cabs by Uber- Weekly Digest #53

Monday- 20th November 2017

  • CBEC Chairman, Vanaja Sarna has written to the biggest companies to ensure that the GST cut from 28% to 18% on 178 consumer products is passed on to the consumers.
  • Infibeam is in talks with Prem Watsa’s Fairfax Financial Holdings to sell a minority stake. The company is also considering strategic investment in and buyouts of retail chains that are using its platform to sell online.
  • Government bonds rallied the most in a year after the RBI on Friday scrapped plans to sell bonds in the open market to absorb excess liquidity.
  • Adani Ports & Special Economic Zone Ltd (APSEZ) announced the appointment of former AirAsia CEO Mrithyunjay Chandilya as Chief Executive Officer of their Logistics Business.
  • Lenders of debt-ridden Reliance Communications have approved the sale of real estate assets in Delhi and Chennai to Canada-based asset management firm Brookfield for ₹801 crores.

 

Tuesday-  21st November 2017

  • Apple has reduced margin for retailers from 6.5% to 4.5%, making it further frustrating for its dealers in India as they struggle to meet the demand of the flagship phone in India.
  • Paytm has picked up an equity stake in a digital loan startup CreditMate for ₹6 crores to help its customers access to credit to buy two-wheelers.
  • TRAI has proposed removing the 50% limit put for companies on holding spectrum within each band. The move is expected to encourage mergers and acquisitions and spectrum trading.Trai also suggested increasing the overall spectrum holding limit for companies to 35% from 25%.
  • A consumer court has ordered  builder Amrapali to deposit over ₹10 crores as the compensation payable to the home buyers of its delayed Sapphire project in Noida
  • Citigroup sold more than 3.5 crore shares of L&T Finance Holdings (1.92%), for over ₹637 crore through an open market transaction.

 

Wednesday-  22nd November 2017

  • The government has sought to tighten the Insolvency and Bankruptcy Code to ensure that wilful defaulters and promoters of companies in loan default over an extended period of time won’t be able to get their hands back on assets during the resolution process.
  • Tiger Global Management to sell off its early shareholdings in Ola ($300 million) and Flipkart ($600-$700 million) for estimated $1 billion to Japan’s Soft-Bank.
  •  Paytm’s parent company One97 Communications and its founder Vijay Shekhar Sharma have together invested ₹60 crores and ₹62 crore in Paytm Payments Bank, taking their total fund infusion to ₹400 crore.
  • NHAI has borrowed ₹5,000 crore from EPFO by selling long-tenure bonds to aid the government’s Bharatmala road project.
  • Shares of Future groups companies surged between 3% and 12%  after the company announced that it plans to open 10,000 member-only Easyday Stores by 2022.

 

Thursday-  23rd November 2017

  • The president signed off on an ordinance amending the Insolvency and Bankruptcy Code to help prevent defaulters from bidding for their assets in resolution proceedings and regaining control at discounted prices. Now it is allowed only if they pay up dues to lenders before resolution plans are put in place.
  • The government has told consumer goods firms and industry stakeholders that new price tags on existing stocks should clearly show the difference that the recent cut in GST has made.
  •  The Mittal family, promoters of Bharti Airtel, pledged ₹7,000 crore, 10% of its wealth, to support the Bharti Foundation, the Bharti Group’s philanthropic arm.

 

Friday- 24th November 2017

  • Standard & Poor’s retained its sovereign rating for India at BBB with a stable outlook. Its rival Moody last week lifted its rating for India by a notch after a gap of nearly 14 years.
  • The government appointed RBSA Advisors as valuation advisors on Air India, to advise them on the disinvestment of the national carrier. RBSA had advised both Air India and Indian Airlines during their merger in 2007.
  • Mahindra & Mahindra has entered into a partnership with Uber India to deploy electric vehicles in Delhi and Hyderabad from February 2018, and later expanding to other cities.
  • Satin Creditcare Network to raise ₹205 crore from private sector lender IndusInd Bank, as well as from existing overseas shareholders. The funds to be utilized to support growth.

 

Source: The Economic Times
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McDonalds faces major shutdown, Provisioning halts insolvency recovery, VIVO wins IPL bid- Weekly Digest #46

Monday- 26th June 2017

  • The government has relaxed GST provisions for e-commerce as it has deferred provision that required e-commerce players such as Amazon and Flipkart to deduct tax on payments made to their vendors and small businesses that sell through these e-commerce platforms don’t have to register themselves immediately.
  • SBI has mandated Alvarez & Marsal to act as interim resolution professional to reorganise Ruias-owned Essar Steel that defaulted on ₹4,000 crores. PwC, EY and Deloitte have also been hired to handle insolvency proceedings.
  • Apple CEO Tim Cook has reportedly told the Prime Minister that Apple had started production of iPhone SE in Bengaluru last month, during a meeting with American business leaders in Washington on Sunday.

 

Tuesday- 27th June 2017

  • After RBI announced banks to have hefty provisions for proceedings under the bankruptcy code, major tumble in prices of the banks’ stocks was observed. The Nifty PSU Bank dipped 3.4% to 3,328 points, its one month low.
  • Vivo won the sponsorship of IPL for the next five years by bidding a record-breaking sum of ₹2,199 crores. The base price was ₹120 crore per season.
  • Coca-Cola is shutting down its biggest analytics, technical and innovation centre in India which is located in Pune. This comes as a part of a restructuring to head towards a leaner organisation.
  • To comply with the RBI norms, RIL is seeking shareholders’ approval for a limit on non-promoter investors’ holding to 5%.

 

Wednesday- 28th June 2017

  • Banks to lobby RBI to relax its strict provisioning norms for accounts referred to the country’s bankruptcy courts. Banks feel it will hamper heir ability to find buyers at a good price.
  • The cabinet has cleared formation of a panel under the Finance Minister Arun Jaitely to decide on the extent to which Air India would be privatised and process to be followed for the same.
  • The internal conflict between Connaught Plaza Restaurants, a local joint venture between Vikram Bakshi and the US-headquartered McDonald’s took an ugly turn as with the CPRL board deciding to shut down 43 out of 55 restaurants in Delhi.
  • Zomato India reported a 34% decline in loss from ₹590 crores to ₹389 crores owing to a strategy that excluded self-fulfilled deliveries. It has enabled the startup to be valued at more than $1 billion.
  • Japanese drugmaker Daiichi Sankyo has moved to NCLT to stop former Ranbaxy promoters, Singh brothers from splitting hospital and diagnostics businesses of Fortis Healthcare. Daiichi has claimed that demerger will make the recovery from Singh brothers more difficult.

 

Thursday- 29th May 2017

  • IndiGo has expressed its interests in buying a stake in debt-laden Air India after the cabinet approved a proposal to dilute state ownership in the company.
  • As a part of changes in the Legal Metrology (Packaged Commodities) Rules, 2011, w.e.f. January 1, 2018, companies will be forbidden from selling the same product at different MRPs at locations such as restaurants and airports.
  • Credit-rating agency Crisil has acquired a 8.9% stake in in local rival Credit Analysis & Research which can potentially lead to acquiring the company. Crisil purchased 26.22 lakh shares at ₹1659.79 per share in a deal valued at ₹435.26 crores.
  • Ministry of Corporate Affairs has amended the Legal Metrology (Packaged Commodities) Rules, 2011 to make it compulsory for e-commerce companies to declare expiry dates and maximum retail prices of packaged consumer products online.

 

Friday- 30th May 2017

  • CDSL made a stellar debut in the market, with shares listed at 67.7% premium at ₹250, over the issue price of ₹149. The share price surged further and closed at ₹260.70.
  • ICICI bank to raise an amount of ₹25,000 crores by issuing securities on a private placement basis. the proceeds are to be utilised for increasing lending operations.
  • The Competition Commission of India has approved Bharti Airtel’s acquisition of Videocon Telecom and Aircel Ltd’s airwaves

 

Source: The Economic Times
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GST Council set rates, Bad loans under Bankruptcy Code, Hyundai Fined by CCI- Weekly Digest #44

Hello, readers. I hope you are doing fine. I would like to apologise for the absence for over five weeks. It was due to medical necessities. I hope this will not repeat anytime soon.

Monday- 12th June 2017

  • GST council lowers rate on 66 household and other essential items such as Cashew nuts, insulins, cutlery, printer and others and raised the threshold for the scheme as it inches closer towards July 1 deadline.
  • As per the Finance Minister Arun Jaitley, RBI is drawing up a list of debtors with bad loans that need to be resolved under the Insolvency and Bankruptcy Code.
  • Anticipated acquisition of  Snapdeal by Flipkart will have to deal with RBI on Foreign Exchange to protect the interests of the shareholders. Issuance of shares by Flipkart Singapore to Indian shareholders of Snapdeal would need a specific permission from RBI.
  • Catholic Syrian Bank has proposed a 51% stake sale to Canada’s Fairfax Financial Holdings Ltd at ₹160 per share. The proposed deal will value the company at ₹1,300 crores.

 

Tuesday-13th June 2017

  • RBI issued a statement that under new Insolvency and Bankruptcy code, 12 accounts totalling about 25% of the current gross NPAs of the banking system would qualify for immediate reference under the Insolvency and Bankruptcy Court.
  • CBEC has stated that import of 4G equipment by Indian telecom firms doesn’t fall within the purview of the global Information Technology Agreement and hence won’t be exempted from the customs duty.
  • The Broadband India Forum has written a letter to IT and telecom secretary Aruna Sundararajan that India could attract serious legal challenges and retaliatory action from key Asean countries if it decides to slap customs duty on imported handsets. However, Indian Cellular Association’s president, Pankaj Mohindroo said that government is elected not for Asean but to serve the people, and industry, in India.
  • Ola raises an amount of $50 million from New York-based investment firm Tekne Capital Management. This pushes the value of the company to $3.65 billion.

 

Wednesday- 14th June 2017

  • Tata Sons is considering a forensic audit of last year’s purchase of Welspun Renewables Energy for ₹9,249 crore by Tata Power Ltd because of concerns over corporate governance, allegedly inflated valuations and the unusual swiftness in execution.
  • The union cabinet approved the Financial Resolution and Deposit Insurance Bill, 2017. This will complete the country’s bankruptcy framework after it’s passed by parliament.
  • Competition Commission of India has imposed a penalty of ₹87 crores on Hyundai as it imposed arrangements upon its dealers that resulted in resale price maintenance -a deal not to sell a product below a specified price -in the sale of passenger cars manufactured by it. This is in contravention to the Competition Act.
  • Anil Ambani has voluntarily given up all his salary and commission until March 2018 from debt-laden and loss-making telecom arm, Reliance Communications.

 

Thursday- 15th June 2017

  • RIL and BP to invest an amount of ₹40,000 crores in the Krishna-Godavari Basin to produce 30-35 million cubic metres a day of gas.
  • India is close to imposing a 10% basic customs duty on smartphones. The decision is expected to be announced shortly before the rollout of the GST.
  • A Warburg Pincus affiliate to invest $360 million for a 43% stake in Tata Technologies Limited. 30% stake will be acquired from Tata Motors and 13% stake from Tata Capital.
  • A consortium of 24 lenders, led by the SBI to sell a majority stake in Adhunik Power & Natural Resources to Edelweiss Group. The lenders will receive cash upfront on sale of distressed assets.

 

Friday- 16th June 2017

  • The government has made it mandatory to furnish aadhaar along with PAN to enable bank opening and any financial transaction over ₹50,000.
  • Airtel, Vodafone and Idea have claimed that Jio’s claims for losses due to debt are false and loss has been incurred due to high government fees as well as the newcomer’s free offers.
  • Optical network equipment manufacturer Tejas Networks’ IPO to raise an amount of ₹776 crores ended as the issue was subscribed 1.9 times. The offer was priced at ₹250-257 per share.
  • Amazon to acquire Whole Foods Market Inc for $13.7 billion. However, Whole Foods’ founder John Mackey will continue to run the business.

 

Source: The Economic Times
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