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QBiz: Mukesh Ambani Bails Out Brother Anil in Ericsson Case & More

A round-up of top business stories for the day.

Published
Business
5 min read
File image of Mukesh and Anil Ambani.
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1. Mukesh Ambani Bails Out Brother Anil in Ericsson Case

Making a dramatic intervention, Mukesh Ambani saved his younger brother Anil from imprisonment by paying money owed by him to Ericsson on Monday, 18 March.

The bailout from the world’s 13th richest man, as per Forbes ranking, came literally at the eleventh hour – Tuesday was the deadline for Anil’s Reliance Communications (RCom) to clear ₹580 crore due to the Swedish equipment maker.

In a late evening statement, Anil Ambani thanked his brother and sister-in-law Nita.

“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support,” Anil Ambani said in the statement.

(Source: The Economic Times)

2. Etihad Flexes Muscle, Says it Will Exit Jet if Resolution Plan Not Reworked

Etihad has flexed its muscle and told lenders of bankrupt Jet Airways to rework the resolution plan for the bankrupt airline, failing which it will press to exit the joint venture.

Sources tell ET Now that Etihad has communicated this to lenders, and added that it will not infuse emergency funds of ₹750 crore till the resolution plan is acceptable to it. Etihad currently has a 24 percent stake in the airline.

This may leave the lenders with no choice but to invoke insolvency and take Jet to the NCLT.

(Source: The Economic Times)

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3. L&T Set to Buy 20% in Mindtree for ₹3,269 Cr in Hostile Takeover Bid

In what is billed as Corporate India’s first hostile takeover bid in the IT sector, Larsen & Toubro Ltd on Monday said it has entered into a definitive share purchase agreement with VG Siddhartha and his related entities, Coffee Day Trading Ltd and Coffee Day Enterprises Ltd, to acquire a 20.32 percent stake in Mindtree.

L&T will purchase this stake at ₹980 per share, aggregating to approximately ₹3,269 crore.

Immediately following the filing of the public announcement, L&T placed an order with its broker for on-market purchase of up to 15 percent of share capital of Mindtree at a price not exceeding ₹980 apiece.

(Source: The Hindu Business Line)

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4. Essar Steel Inching Towards Resolution

ArcelorMittal moved a step closer to acquiring Essar Steel with the National Company Law Appellate Tribunal (NCLAT) allowing the implementation of its ₹42,000 crore resolution plan for the debt-laden steel company, pending its final ruling.

It asked ArcelorMittal to deposit ₹42,000 crore with the committee of creditors (CoC), which may disburse funds but the distribution will be subject to the tribunal’s ultimate decision.

“We are not going to interfere with the resolution plan. We have not passed a stay order,” said the two-member bench led by justice SJ Mukhopahdyaya on Monday. “We are looking into the question of apportionment to creditors.”

(Source: The Economic Times)

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5. RCom, RJio End Spectrum Deal Amid Legal Hurdles

Debt-laden Reliance Communications (RCom) and Reliance Jio Infocomm (RJio), a wholly-owned subsidiary of Reliance Industries (RIL), have decided to mutually terminate an asset-sale agreement.

This comes even as Mukesh Ambani stepped in to save his younger brother Anil from going to jail by coughing up the money to repay Swedish equipment major Ericsson. RCom on Monday paid ₹458.77 crore to Ericsson, avoiding a potential three-month jail term for its Chairperson Anil Ambani.

The asset sale agreements, signed on 28 December 2017 and 11 August 2018 were supposed to reduce RCom’s debt but regulatory and legal hurdles delayed the completion of the deal.

(Source: The Hindu Business Line)

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6. Brookfield to Buy Hotel Leela Assets for ₹3,950 Cr in Slump Sale

Debt-laden hospitality firm Hotel Leela Venture will sell its assets to Canada-based private equity firm Brookfield Asset Management for ₹3,950 crore.

The deal covers four hotels, in Bengaluru, Chennai, Delhi and Udaipur, on a slump sale basis.

The deal also gives Brookfield a 100 percent shareholding in Leela Palaces and Resorts Ltd, which owns certain properties and holds the licence to develop a hotel in Agra. These account for nearly 80 percent of Leela’s revenues and 88 percent of the company’s net worth.

Leela will continue to operate a hotel in Mumbai and own some land in Hyderabad. It will also continue to jointly develop residential apartments with Prestige Developers in Bengaluru. Brookfield will have the right of first refusal over the company’s hotel in Mumbai.

(Source: The Hindu Business Line)

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7. Flipkart, Amazon Under Investigation; ED Probing Foreign Exchange Law Violation

Investigation has been initiated against e-commerce giants Amazon and Flipkart for alleged violation of foreign exchange law, the Enforcement Directorate (ED) on Monday informed the Delhi High Court.

A bench of Chief Justice Rajendra Menon and Justice AJ Bhambhani noted the submissions of the ED that a case has been registered under provisions of the Foreign Exchange Management Act (FEMA) against the two companies and disposed of a PIL which has alleged that the e-commerce giants were violating foreign direct investment (FDI) norms.

The court had earlier sought response of the central government, Amazon and Flipkart to the plea which has sought a probe into the alleged FDI violations.

(Source: PTI)

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8. GST Council May Discuss New Rate Structure on Under-construction Houses

In its 34th meeting scheduled on Tuesday, the Goods and Services Tax (GST) Council will discuss and finalise the rules, under which the new rate structure on under-construction houses will be implemented.

Further, the GST Appellate Tribunal (GSTAT), whose national bench was approved in January, is set to get approval for regional benches in the meeting.

While the first decision would help bring transparency between home buyers and builders, the second would help faster resolution of “place of supply”-related disputes.

(Source: Business Standard)

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9. Proposed New Industrial Policy on the Back-burner

Time has run out for the government to announce the new industrial policy that hoped to attract foreign investments worth $100 billion annually, as the Model Code of Conduct makes it difficult for new measures to be implemented.

“Officials who gave the final shape to the new industrial policy tried their best to speed up things...before the announcement of election dates, but it did not work out. It can now be hoped that the new government takes forward the work already done and announces the policy soon,” a government official said.

(Source: The Hindu Business Line)

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