QBiz: Mindtree Looks to Block L&T; Sterlite CEO Ramnath ‘Retires’
A round-up of top business stories for the day.
1. Mindtree Founders Plan Buyback Wall to Block L&T
Software services company Mindtree took the unusual step of calling a board meeting next week to consider a share buyback as it sought to stave off a possible hostile bid by Mumbai-based L&T Infotech.
Mindtree told stock exchanges on Friday that its board will meet on 20 March to consider a buyback. The Bengaluru-based company’s last buyback was in 2017.
The move comes amidst reports that L&T Infotech is in final stages of launching a takeover attempt by buying the shares of Mindtree’s strategic investor VG Siddhartha, of the Cafe Coffee Day Group.
(Source: The Economic Times)
2. After a Stormy Stint, Ramnath ‘Retires’ From Sterlite; Kumar is New CEO
P Ramnath, CEO, Sterlite Copper, has retired in the midst of the ongoing controversy surrounding the company’s copper smelter at Thoothukudi in Tamil Nadu. The plant has remained shut since last May following allegations of environmental pollution.
Ramnath, who has helmed the company’s operations over the last eight years, said: “I have now retired from the services of Sterlite Copper after a very personally satisfying tenure. However, my contribution and support to Sterlite will continue in my new role as Senior Advisor with the organisation.”
After superannuation, Ramnath was on an extension for nearly four years, said sources.
Pankaj Kumar, an industry veteran, has been named the new CEO.
(Source: The Hindu Business Line)
3. NCLAT Supports Rejection of Ruias’ Essar Steel Offer
The National Company Law Appellate Tribunal (NCLAT) told Essar Steel Asia Holdings (ESAH) to withdraw its appeal against the rejection of its ₹54,389 crore offer for Essar Steel, possibly making it harder for the Ruias to regain control of the asset.
However, the tribunal said ESAH may be heard during a parallel appeal against the approval of ArcelorMittal’s ₹42,000-crore resolution plan.
The Ahmedabad bench of the National Company Law Tribunal (NCLT) had in January rejected ESAH’s plea to consider its bid, taking Essar Steel out of the bankruptcy process.
Under the Insolvency and Bankruptcy Code (IBC) only the lenders that had moved NCLT could withdraw Essar Steel from the process, the bankruptcy court had said.
(Source: The Economic Times)
4. Reserve Bank Backs FinMin on Debt Recast Plan
The RBI told the Supreme Court that the inter-creditor agreement (ICA) aimed at helping debt defaulters avoid bankruptcy proceedings requires the approval of 66 percent of lenders and not all of them, backing the plan that had been drawn up at the behest of the finance ministry.
Rakesh Dwivedi, senior advocate appearing on behalf of the RBI, clarified that after execution of ICA, all lenders in a consortium don’t have to approve it.
The RBI also told the SC that banks could have continued with various resolution processes that were being discussed before 12 February last year, when a circular issued by the regulator had scrapped such mechanisms.
(Source: The Economic Times)
5. Naresh Goyal, Etihad Close to Jet Resolution Plan; Outcome Likely in a Week
Jet Airways promoter Naresh Goyal and his joint venture partner Etihad Airways are close to hammering out an agreement on the banks-led resolution plan and the outcome is expected within a week, sources in the know said.
“We are hopeful that Jet Airways will have a resolution in a week. Intense negotiations are going on. It is our desire that the airline keeps running – that is the fundamental difference between Jet and other NPA (non-performing asset) accounts,” a senior executive of one of the banks involved in the restructuring of the airline said.
The banker added that they were working on a “comprehensive solution and not a patchwork”.
(Source: Business Standard)
6. Trade Deficit Narrows to $9.59 Billion in Feb, Exports Grow by 2.4%
Exports took a beating for the fourth consecutive month, as growth in February fell to 2.44 percent, with major foreign exchange earners such as gems and jewellery, engineering goods, and petrochemicals seeing sluggish growth.
Imports also contracted for the second time in the past three months.
As a result, the trade deficit figures fell to their lowest level in the current financial year (2018-19 or FY19). The effective trade deficit fell to $9.59 billion in February from $14.73 billion in January.
(Source: Business Standard)
7. Malvinder, Shivinder Singh Ultimate Beneficiaries of ₹2315 Cr Funds Division: Sebi
Stock market regulator Securities and Exchange Board of India (Sebi) in its order has stated that Malvinder and Shivinder Singh were the ultimate beneficiaries of the Rs 2,315 crore funds diversion done in a fraudulent manner in Religare Enterprises (REL) and Religare Finvest (RFL).
The 24-page ex-parte order passed on Thursday by G Mahalingam, Wholetime Member, Sebi, says that this is a remedial measure, pending further investigation.
The regulator noted that the interim ex-parte order is to protect the interests of shareholders of REL as funds to the tune of Rs 2,315.09 crore have moved out from RFL for the ultimate benefit of erstwhile promoters of REL.
(Source: Financial Express)
8. Pending Petroleum Subsidy Held Back to Make Room for PM-Kisan Scheme
The Rs 20,000 crore that the Narendra Modi government has allocated for its newest flagship scheme, PM Kisan, for 2018-19 came at the cost of petroleum subsidy dues of the state-owned oil-marketing companies, Business Standard has learnt.
The budgeted petroleum subsidy estimate for the current fiscal year was Rs 24,933 crore.
Sources in multiple ministries said the Centre was seriously considering paying out an extra Rs 20,000 crore to clear all the outstanding subsidy dues of the OMCs and start 2019-20 on a clean slate, without any subsidy carryovers.
(Source: Business Standard)
9. Allahabad Bank Aims to Raise Up To ₹600 Cr Via Sale of Non-core Assets
Allahabad Bank, which recently came out of the Prompt Corrective Action (PCA) framework of the Reserve Bank of India, is planning to raise ₹500-600 crore through sale of non-core assets next fiscal.
According to SS Mallikarjuna Rao, MD and CEO, the bank is hopeful of raising ₹200-300 crore through stake-dilution in its insurance venture, Universal Sompo General Insurance.
The bank has appointed a consultant – Choice Consultant – for valuation of its stake.
(Source: The Hindu Business Line)
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