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Bank bailout for Kingfisher hangs in the balance
Fitch downgrades Greece on debt swap plan
Defence ministry to keep industry posted about operational needs
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Bank credit offtake in Haryana slows to 19.75% in Q3FY12
India’s FY13 gold imports may fall 35%
Pvt carriers allowed to import jet fuel
RCom ties up with overseas banks for refinancing
Norway’s Telenor to sever ties with Indian partner
Etisalat’s Indian mobile JV to shut down operations
MCX float subscribed 91% on day 1
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Bank bailout for Kingfisher hangs in the balance
New Delhi/Mumbai, February 22 Dismay and disbelief at this "indirect" government help to the beleaguered airline saw SBI shares plunge on the stock market. By the end of the day there were reports, again unconfirmed, that SBI was considering no such move. Banking sources said the airline's consortium of 16 lenders, which includes SBI, were still studying a debt restructuring proposal put forward last week. Banks own about a quarter of the carrier through an earlier debt-for-equity swap. "I don't think any individual bank can take a decision," said a source at the Punjab National Bank, India's second-largest public sector lender. "It will have to be decided by the consortium." SBI's chief financial officer, Diwakar Gupta, declined to comment on the reports of an imminent rescue package. Desperately strapped for cash, Kingfisher Airlines stands on the brink of collapse after nearly a week of flight cancellations and the resignation of dozens of its pilots. The company has not turned a profit since it was founded in 2005 and is carrying a debt burden of at least $1.3 billion. Its revenue has been in decline since the end of last year. Staff are not being paid and tax bills remain outstanding. A tax official said the airline's FY12 arrears were around Rs 400 m. "NO GOVERNMENT LIFELINE": Mallya has blamed his cash crunch on the tax authorities, which last week froze Kingfisher's bank accounts over its unpaid dues. Civil Aviation Minister Ajit Singh said Kingfisher Airlines could not expect the government to pull it back from the brink, as it did state-owned Air India. New schedule submitted to DGCA Ailing Kingfisher Airlines, whose services remained affected for the sixth day, today filed a fresh flight schedule with DGCA, scaling down its operations to about 170 daily flights with 28 functional aircraft. Faced with the regulators’ deadline, the airline submitted a revised winter schedule of flights it would operate till March. This schedule is being examined, DGCA sources said. On a day when over 30 flights were cancelled, DGCA chief Bharat Bhushan briefed Civil Aviation Minister Ajit Singh on the tough financial situation faced by the carrier. |
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Fitch downgrades Greece on debt swap plan
Athens, February 22 All three big ratings agencies — Fitch, Moody's and Standard & Poor's — downgraded Greece in July when an initial debt swap plan was unveiled and have warned that losses for private creditors would trigger a temporary default. As expected, Fitch said it was downgrading Greece to "C" from "CCC," and would follow up with further downgrade to a "restricted default" when the bond swap is completed. It will then reassess the country's ratings when new bonds are issued as part of the debt exchange. "It would come out to a low, speculative grade rating," Fitch analyst Paul Rawkins told Reuters on the ratings after the reassessment, noting that rating would factor in the country's economic prospects and new debt profile. He added the current process of downgrades was largely procedural, following the path laid out by the agency in June. Ratings, which give an estimate of the capacity of a creditor to repay its debt, usually serve as a guide to investors. Eurozone finance ministers agreed a 130-billion euro rescue plan for Greece on Tuesday to avert a messy default.
— Reuters Is eurozone out of danger after rescue?
After months of dispute and delay, Europe's historic rescue of Greece on Tuesday spawned instant relief across the troubled eurozone, though analysts warned the debt crisis seemed far from over. The 237-billion-euro rescue, the biggest in Europe's history, "closes the door on a default scenario with serious social and economic consequences" for the continent's sickest nation, said European Commission chief Jose Manuel Barroso. Analysts stressed that the deal, achieved after a night of marathon talks, not only averted bankruptcy for Greece but also its departure from the euro — a potential catastrophe for the 12-year-old currency.
— AFP |
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Defence ministry to keep industry posted about operational needs
Bangalore, February 22 Talking to reporters on the sidelines of a conference on electronic warfare here on Wednesday, Vice-Admiral Shekhar Sinha, chief of the elite Integrated Defence Staff, said the perspective plan was expected to be approved by the government shortly. "Based on that, what is required by the services will be displayed on the defence ministry website for the knowledge of the industry", he added. It has been more than decade since the Indian government, in a major policy initiative, liberalized the defence industry in 2001. This was done by allowing 100 per cent participation by the private sector with foreign direct investment (FDI) permissible up to 26 per cent, both subject to licensing and security clearances. The initiative was undertaken to harness the expertise of the private sector and facilitate its participation through infusion of foreign capital and technology for the purpose of enhancing self-reliance in India's defence production. By October 2011, the department of industrial policy & promotion issued 200 letters of intent/industrial licenses to various private entities, with proposed investments totaling Rs 11,773 crore, and potential employment opportunities for 38,579 people. By November 2011, cumulative foreign direct investment of Rs 17.68 crore (US $3.72 million) was received by the Indian defence industry. A revised policy on offsets is expected to be released soon. Sinha, without getting into the various issues pertaining to the defence offset policy, said the objective behind displaying military hardware requirement on the defence ministry website was to give a boost to "capacity building" of the Indian defence industry. "They should know in which areas investments are needed to be made, joint ventures are to be formed, what technology is required by the armed forces and so on", he said. |
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Bank credit offtake in Haryana slows to 19.75% in Q3FY12
Chandigarh, February 22 This was revealed in the recently released data of the state level bankers committee for Haryana. The data shows though there is an increase in the total advances made by the banks between December 2010 and December 2011, the growth rate has declined by 8.85 per cent. The data shows total advances in December 2011 vis-a-vis December 2010 have risen by Rs 18,637 crore. However, the increase was much higher during the same period of last financial year — Rs 18,637 crore. The data also shows growth in advances made by banks was the maximum in semi urban areas of Haryana at 20.5 per cent. This was a much higher growth rate than during the corresponding period of fiscal 2010-11. However, what has led to the declining growth in advances has been the poor credit offtake in rural and urban areas, where the fall has been quite sharp. In urban areas, the growth was 20.2 per cent this year, as compared to 32.2 per cent between October-December 2010. Similarly, growth in advances in rural areas fell from 27.4 per cent to 16.5 per cent. C.B. Goel, a leading industrialist in Panchkula, said the reason for the slowdown in credit offtake in the state was the unwillingness of medium and small sector industry to take loans and expand their operations. “Even the big ticket investors, who were responsible for the state’s economic boom, are finding it difficult to invest in the state because of the steep land prices within the municipal limits of major towns. In rural areas, industry does not want to invest because of the poor power supply,” he said. Agreeing with him, Satish Gupta, chairman of the Haryana Chamber of Commerce & Industry (HCCI), said since medium, small and micro enterprises were not expanding here and rather moving to greener pastures in the nearby tax free states like Himachal Pradesh and Uttaranchal, it had impacted the credit offtake in Haryana. |
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India’s FY13 gold imports may fall 35%
Indians found gold a better investment than stocks and an effective tool to hedge against inflation in the current fiscal when imports are estimated to reach $58 billion. The government hopes gold imports will be $38 billion in FY12. "The stabilization of basic macroeconomic conditions at home is expected to curtail the demand for imported gold to be held as an asset by Indian households," C. Rangarajan, chairman of the PM’s economic advisory council said, presenting the panel's report on the Indian economy. India imported 969 tonnes of gold in 2011, almost the same amount as in the previous year, as volatile prices dented demand. Shipments will remain flat this year, the World Gold Council said. Gold priced in Indian rupees gained about 37%in 2011. In comparison, the stock market tumbled almost a quarter during the same period.
— Reuters |
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Pvt carriers allowed to import jet fuel
New Delhi, February 22 A group of ministers headed by Finance Minister Pranab Mukherjee had decided on February 7 that the commerce ministry would permit direct import of
ATF. Beleaguered Kingfisher Airlines has been demanding permission to get fuel supplies from overseas so that they do not have to pay sales tax that are as high as 30% in some states. Jet fuel, which makes up for about 40% of an airline's operating expenses, costs the most in the region. The notification said ATF imports have been allowed by or on behalf of Indian carriers on actual use basis.
— PTI |
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RCom ties up with overseas banks for refinancing
New Delhi, February 22 According to the company, this is the largest refinancing in the history of FCCBs by any Indian firm. The
FCCBs, valued at US $1.18 billion (approximately Rs 5,825 crore at the current exchange rate of
Rs. 49.30), will be redeemed on March 1, 2012, the due date. RCom will benefit from extended loan maturity of 7 years and attractive interest cost of about 5%. |
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Norway’s Telenor to sever ties with Indian partner
Mumbai, February 22 Telenor said it would seek 74% ownership of the new entity, which will bid for fresh telecommunications licenses in an upcoming spectrum auction. Earlier this month, India's top court ordered the government to cancel 122 licenses, a fifth of which belonged to Uninor.
— AP |
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Etisalat’s Indian mobile JV to shut down operations
New Delhi, February 22 "As unanimously resolved by the board this evening, Etisalat DB will be taking steps to reduce operating costs, including suspension of its network and services..." Etisalat said. It added it would decide on any future participation in the Indian market when there is clarity on a spectrum auction process.
— Reuters |
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MCX float subscribed 91% on day 1
New Delhi, February 22 The shares reserved for retail investors got subscribed 1.5 times on the first day itself, with bids worth an estimated over Rs 300 crore. Besides, the portion reserved for institutional investors was subscribed 74% with bids worth about Rs 150 crore. The IPO, which is estimated to raise about Rs 663 crore, got total bids worth about Rs 500 crore, while bidding would continue for another two
days. — PTI |
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New Delhi, February 22