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QBiz: Jet’s Rescue Plan Hits Air Pocket; L&T to Seal Mindtree Deal

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

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1. Jet’s Rescue Plan Runs into Rough Weather

The deal to rescue Jet Airways has hit an air pocket. Lenders have told Jet’s strategic partner Etihad Airways that if it is unable to accept the terms to revive the troubled airline, it should exit so that a new investor can be brought in.

Etihad, saddled with losses and unsure of the resolution plan and its probable outcome, is understood to have said that it could exit at a price of ₹150 a share.

“This could well be pressure tactics but it has not gone down well with the government and the National Investment and Infrastructure Fund (NIIF), which was planning to invest. But the question is, where is the buyer even if Etihad offers to sell its stake?” said a person familiar with the developments.

Etihad owns 24 percent of Jet, which closed at ₹234.95 on Friday on the BSE.

(Source: The Economic Times)

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2. L&T Set to Seal Mindtree Deal With Siddhartha

Larsen & Toubro (L&T) is planning to sign a deal with Café Coffee Day founder VG Siddhartha to buy his 21 percent stake in Mindtree and launch an open offer for an additional 31 percent stake in the IT company, probably as early as Monday evening, said several people aware of the developments.

Mindtree Chairman and Co-founder Krishnakumar Natarajan, meanwhile, warned against a hostile takeover bid in a letter to the L&T board on Saturday, according to reports.

The engineering conglomerate is keen to act before Mindtree’s board meeting on Wednesday to consider a buyback proposal that’s seen as an attempt to thwart the L&T bid.

Siddhartha is also expected to be in Mumbai on Monday. L&T is likely to announce it has acquired his 20.4 percent stake and launch its open offer.

(Source: The Economic Times)

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3. Tata Realty Set to Acquire Tata Sons’ Stake in Housing Arm for ₹3,000 Cr

Tata Realty and Infrastructure (TRIL) will acquire Tata Sons’ stake in Tata Housing (THL) for about ₹3,000 crore. Both TRIL and Tata Housing are 100 percent subsidiaries of Tata Sons.

The two real estate firms were competing for projects in the same cities in the past, which is a factor behind the integration.

This is part of Tata Sons’ overall plans to restructure group companies to streamline the internal shareholding structure and businesses.

(Source: The Hindu Business Line)

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4. Asset Monetisation: IL&FS to Receive First Set of Bids Today

The cash-strapped IL&FS Group will receive the first set of bids under its asset monetisation plan on Monday, 18 March, as part of the resolution process, according to sources.

The company’s board will later consider bids for ₹8,000 crore renewable energy business that was put on the block in November 2018, the sources said.

This will be the first set of bids that will be opened under the asset monetisation process as part of resolution process by government-appointed and Uday Kotak-led new board, they added.

(Source: The Hindu Business Line)

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5. SBI Moves K’taka HC for Rights Over 2.8% in United Breweries

The State Bank of India (SBI), one of the lead lenders to Vijay Mallya’s businesses, has moved the Karnataka High Court to seek rights over a 2.8 percent stake, worth ₹1,025 crore, in beer maker United Breweries (UBL) held by a court-appointed liquidator.

The stake was held by United Breweries (Holdings) Ltd, the holding company for all Mallya-owned companies which is currently under liquidation.

The Debt Recovery Tribunal last week transferred the stake – 74,04,932 equity shares – held by United Breweries (Holdings) to the liquidator.

The shares were earlier attached by the Enforcement Directorate, which probed allegations of money laundering against the businessman who has been declared a wilful defaulter by banks.

(Source: The Economic Times)

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6. Maruti Suzuki Cuts Production by a Quarter on Slow Demand in Indian Markets

A slowing demand in India’s passenger vehicle market has prompted the car market leader, Maruti Suzuki India, to cut production by a quarter over March last year, said people aware of the company’s plans.

Maruti is estimated to have cut production to around 126,000 units as compared to more than 172,000 units a year ago, which is a 26.8 percent reduction.

This is in sharp contrast to a positive trend in the past several years, including double-digit growth for the last four years. The cut comes amid demand uncertainties ahead of the Lok Sabha elections.

(Source: Business Standard)

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7. Steel Firms Seek Clampdown on Iranian Exports Through UAE

Steel companies have urged the government to stop the dumping of steel by Iran through the United Arab Emirates at a much lower price.

In a letter written to Binoy Kumar, Secretary, Ministry of Steel, the Indian Steel Association (ISA) said it is alarming that steel imports to India from the UAE are growing at a fast pace and are expected to go up by over three times to 2.34 lakh tonnes (1.18 lt) this fiscal year.

Imports from the UAE, at 1.75 lt in the first nine months of this fiscal, have already surpassed imports during the whole of last year. On the other hand, direct shipments from Iran have come to a standstill from 34,330 tonnes in FY18.

(Source: The Hindu Business Line)

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8. Bharti AXA Life’s Premium Grows to ₹1,359 Cr in April-December FY19

Private sector Bharti AXA Life Insurance registered a 28 percent growth in its total premium to Rs 1,359 crore during the nine months to December of the current fiscal, and will focus on tier 2 and 3 cities next year to expand business, a top official said.

The company’s total premium stood at Rs 1,064 crore in the corresponding period of 2017-18.

The new business premium surged by 40 per cent to Rs 617 crore during April-December period of 2018-19, while renewal premium grew by 19 percent to Rs 742 crore.

(Source: PTI)

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9. Centre Likely to Hike Import Duty on Consumer Durables Yet Again

Not content with raising the import duty on key components of television (TV) sets last year, the government is now mulling another round of duty hike – this time, on raw materials used in home appliances such as air conditioners (ACs), refrigerators, washing machines, and microwave ovens.

It is learnt that the Ministry of Commerce is considering a proposal to increase Customs duty on compressors for ACs and refrigerators and pre-coated steel sheets and copper tubes used in making condensers, among others.

(Source: Business Standard)

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