1. Etihad’s Bid for Minority Stake in Jet Airways Is Non-Binding
Etihad Airways PJSC’s bid for a minority stake in grounded Jet Airways India Ltd is non-binding and subject to fulfilment of certain conditions by Jet’s lenders, two people aware of the matter said, requesting anonymity.
Jet Airways, in which Etihad owns 24%, shut operations last month after lengthy talks with Jet’s founder Naresh Goyal, external investors and Etihad were not successful.
Among its conditions, Etihad Airways wants an exemption from an open offer that may be triggered by a change in ownership structure of Jet Airways. More importantly, it wants a commitment from banks on additional loans, once it infuses equity into the company.
(Source: Livemint)
2. Alibaba to Take on Amazon as It Eyes Global Expansion to Offset Chinese Slump
The Chinese e-commerce behemoth is Alibaba is tweaking the business model of its e-commerce business AliExpress, which enables Chinese merchants to sell their products in over 150 countries, to enable small and medium-sized sellers initially from Russia, Turkey, Italy, and Japan to sell their products globally through AliExpress network. The move will enable Alibaba to step up competition with Amazon globally even as the home growth slows down.
Local to global – as AliExpress has called it “is intimately connected to Alibaba’s broader globalisation strategy,” Trudy Dai, President at Alibaba’s wholesale marketplaces division told the Financial Times, adding that the company eyes expansion of the initiative to other countries after gaining experience in the first four markets.
(Source: The Financial Express)
3. PE Funds Increasingly Look for Buyout Deals in India
Private equity (PE) funds in India are increasingly preferring to take control of the companies in which they are buying stakes.
In the past five years, control deals grew at an annual average rate of 50% to $9.9 billion in 2018, according to data from EY India. In comparison, overall private equity investments grew at an annual average pace of 25% to $35.8 billion in 2018.
This tremendous growth in buyouts is driven by a significant increase in the size of investments, making PE funds seek more control over the companies they invest in.
(Source: Livemint)
4. NCLT Rejects ICICI’s Era Insolvency Plea
The principal bench of the National Company Law Tribunal (NCLT) in New Delhi has dismissed a petition by ICICI Bank to begin insolvency proceedings against Era Infrastructure India Ltd (EIIL), on the grounds that the bank was already claiming its dues in insolvency proceedings against EIIL’s parent and corporate guarantor Era Infra Engineering Pvt Ltd.
“Therefore, on account of duplicacy of the claims, the petition cannot be entertained,” the order dated May 7 said.
Parent Era Infra is one of the 12 bad loan accounts that Reserve Bank of India (RBI) had directed for reference under Insolvency and Banking Code (IBC). Proceedings started last year, with Rajiv Chakraborty as interim resolution professional. Chakraborty had rejected ICICI Bank’s claims as a financial creditor, but his decision was overturned by the NCLT in December.
(Source: Hindustan Times)
5. M-Wallet Transactions Rise after a 5-Month Gap in March: RBI Data
Mobile wallet-based transactions witnessed an increase for the first time in five months, clocking transactions worth ₹15,990 crore in March, an increase of 12% from the preceding month, Reserve Bank of India (RBI) data shows.
There were 384.89 million transactions in March as compared with 345.03 million in February worth ₹14,279 crore.
The growth can be attributed to the year-end phenomenon when monetary transactions usually increase.
There has been a 30% year-on-year jump in 2018-19 in terms of value at ₹1.83 trillion and 37% growth in volume of transactions at 4.13 billion as compared with 2017-18.
(Source: Livemint)
6. Government Plans More Restrictions on Audit Firms
Audit firms may face more restrictions on the juicy non-audit assignments they could accept from statutory audit clients. This is part of a government initiative to tighten the rules to improve the quality of statutory audit.
The ministry of corporate affairs and the National Financial Reporting Authority have been assessing how the quality of audit can be further improved and whether the list of non-audit services that auditors are barred from accepting should be widened in order to prevent a conflict of interest, corporate affairs secretary Injeti Srinivas said in an interview.
The idea is to ensure that any pecuniary relationship on account of offering non-audit services do not compromise auditors in giving a true and fair picture of the audited company’s financial health.
(Source: Hindustan Times)
7. Top Automakers Cheer Govt Push for EV Localisation Drive
Top automakers have cheered the government’s recent push to localise manufacturing for hybrid and electric vehicle (xEV) under the revised norms of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme (FAME 2).
This is in sharp contrast to the several instances over the last decade where auto industry stakeholders have clashed with government agencies on multiple fronts such as dual fuel policy, roll out of CNG stations, vehicular pollution, emission norms, safety mandates, as well as the government’s thrust on biofuels and electrification of vehicles.
Mint had on 7 May reported that the latest draft guidelines on FAME list components such as control units, chargers, and AC units that need to be built locally, with specific deadlines, for manufacturers to qualify for subsidies under a government scheme launched to encourage the adoption of such vehicles.
(Source: Livemint)
8. NCLAT Dismisses Insolvency Plea against Spicejet Due to Lack of Proof
The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea for initiation of insolvency proceedings against Spicejet by Ramco Systems Ltd, an operational creditor of the low-cost carrier. A two-member bench headed by Chairman Justice S J Mokhopadhaya upheld the orders passed by the National Company Law Tribunal (NCLT) in this matter saying that it has rightly rejected Ramco’s plea by observing that such petition requires strict proof of debt and default, which was absent in this case.
The appellate tribunal said there was nothing on record to suggest that the demand notice relating to invoices issued by Ramco System was forwarded or received by Spicejet. “For the reasons aforesaid, no relief can be granted,” said NCLAT.
Ramco Systems had entered into agreement with Spicejet to provide ‘Aviation Software Solutions’ in May, 2013. Later in July 2014, ‘Change Order Demand’ was executed between the parties. The earlier ‘Software Licence Agreement’ for 180 number of authorised users were amended to 55 aircraft tails and unlimited users with other amendment and modification which also followed various modification and alteration.
(Source: PTI)
9. Imminent Crisis in NBFC Sector: Corp Affairs
There is an "imminent crisis" in the non-banking financial companies (NBFCs) sector as misadventures by some large entities and credit squeeze present a perfect recipe for disaster, a senior government official has said.
In recent months, the country's financial system has been grappling with multiple woes in the wake of the turmoil at diversified IL&FS group as well as debt defaults by some other large entities.
In an interview to PTI, Corporate Affairs Secretary Injeti Srinivas said the NBFC sector is facing issues of credit squeeze, over-leveraging and misadventures by some large entities.
(Source: PTI)
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