Jet Airways’ board on Thursday approved Rs 8,500 crore debt resolution plan that mainly includes infusion of funds, debt restructuring and sale or leaseback of aircrafts. Jet will seek approval from its shareholders at a meeting on February 21 to convert its debt into 11.40 crore equity shares, making SBI-led lenders the largest shareholders of the company. The plan also empowers the lenders to appoint nominees to the airline's board. Meanwhile, Jet Airways today posted a loss of Rs 587.77 crore for the quarter ended December against profit of Rs 165.25 crore in the corresponding period last year.
Shares of Dewan Housing Finance Corporation Limited (DHFL) jumped 18% from the intra-day lows to Rs 123 apiece. The stock opened 6% lower at Rs 105 after DHFL’s Joint MD and CEO Harshil Mehta resigned on Wednesday with immediate effect. However, the company clarified that Harhil Mehta would continue to be associated with the company and shall hold the designation of Executive President- Retail Business with effect from 14th February 2019. The Wadhawans, promoters of DHFL are also planning to rope in a strategic investor to infuse fresh equity into the company.
India’s biggest air-carrier by market share, IndiGo, plans to hire 100 expatriate pilots this year. A shortage of pilots and flight commanders has forced Indigo to cancel flights. The hiring is expected to increase staff costs for the airline. With a basic salary of $13,000 on average, expat pilots in India command salary premiums of up to 35%over their Indian peers. The carrier has more than 200 aircrafts and a pilot strength of over 3,000 including over 1,200 commanders. The airline cancelled 49 flights on Wednesday and will be cancelling 30 of its daily 1,300 flights everyday this month.
Consortium of banks led by SBI plan to lend an additional Rs 600 crore to the cash-strapped Jet Airways against shares pledged by founder chairman Naresh Goyal and partner Etihad Airways PJSC and backed by their guarantees. The disclosure is likely to be made after Jet Airways’ extraordinary shareholder meeting scheduled for February 21. The fund infusion would come as a lifeline for Jet Airways, Asia’s worst-performing airline stock, which has defaulted on interest payments, delayed salaries and payment to aircraft lessor. Jet’s share price has tanked more than 73% in the past 1 year.
The Enforcement Directorate (ED), through a consortium of banks led by the SBI, has informally informed Heineken NV, part-owner of United Breweries (UB) that it intends to allow banks to auction attached shares of the Indian beer maker once the court grants its approval to the agency. Heineken has shown interest in buying the shares at a premium. ED has attached 41.3 million equity shares of UB held by eight promoter firms, equivalent to a 15.63% stake. Heineken owns about 44% in UB. While Mallaya still holds 8%, a little over 23% of the promoter shares are pledged.
The Offer For Sale (OFS) by Axis Bank was subscribed 3.68 times by retail investors on Wednesday, according to NSE data. The institutional category was also oversubscribed on Tuesday. The issue received retail bids for 2.84 crore shares, which was 3.68 times the total size of 77.09 lakh shares. The portion for retail category was fixed at 10%. The floor price for the OFS was fixed at Rs 689.52. The government is looking to raise Rs 5,300 crore through sale of its 3% stake in Axis Bank held through SUUTI. SUUTI owns 9.63% in Axis Bank.
Auto component major Bharat Forge on Wednesday reported 35.79% increase in standalone net profit at Rs 309.83 crore for the third quarter ended December 31, 2018. The company had reported a profit of Rs 228.17 crore in the same quarter last fiscal, Bharat Forge said in a regulatory filing. Total income during the quarter under review stood at Rs 1,740.37 crore as against Rs 1,412.47 crore in the year-ago period, it added. The company secured new orders worth $6.5 million from the commercial vehicle (CV) and industrial sectors," Bharat Forge CMD B N Kalyani.
The crash in mid and small-cap shares has derailed the nexus between promoters and stock market operators. Operators, who collided with promoters to push up stock prices of these companies, are now dumping shares as many cash-strapped promoters are unable to buy back shares from these operators. This has triggered a steep decline in stock prices many of such shares. BSE Midcap and Smallcap indices have plunged 9% each since beginning of the year. The increased focus on mutual fund lending to promoters against pledged shares has also dried up funds for the promoters to maintain high prices.
The one-day Rs 3,500 crore additional offering of Bharat-22 Exchange Traded Fund (ETF) will open for subscription on Thursday. Applications from institutional and retail investors will be accepted till 8 pm. Retail individual investors can apply for a minimum of Rs 5,000 and up to Rs 2,00,000 per investor, while non-retail individual categories can apply for Rs 2,00,001 or more. While the retail category will be allotted 34% of the maximum amount to be raised, retirement funds will be allotted 33%. The Bharat-22 ETF, comprising of highly liquid stocks, will be taxed similar to equity shares or equity mutual funds.
Shares of Dewan Housing Finance Corporation (DHFL) plunged 6% in early trade on Thursday, a day after the company said its CEO Harshil Mehta has resigned. The board of directors of the company accepted Mehta's resignation. The board has recommended the appointment of Sunjoy Joshi as an Independent Director and Srinath Sridharan as a Non-Executive Director. The stock has corrected more than 80% from its highs of Rs 691. It is currently trading around Rs 107.
The RBI has given a clean chit to Yes Bank, clearing it of any divergence in bad loan, the private-sector lender said on Wednesday. “The report observes NIL divergences in the bank’s asset classification and provisioning from the RBI norms,” Yes Bank said. Against the Rs 748.98-crore of gross NPAs reported by Yes Bank as on March 31, 2016, the RBI assessment showed the tally at Rs 4,925.68 crore, leading to a divergence of Rs 4,176.70 crore. This divergence further increased to Rs 6,335 crore in FY17 and led to curtailment of former CEO Rana Kapoor's tenure by the RBI.
Tata Steel UK CEO Bimlendra Jha has resigned from the post, a source said. “Bimlendra Jha, the CEO of Tata Steel UK, has resigned. Ashish Anupam of NatSteel Holdings will be looking after the business,” the source said. The source, however, did not divulge information about the reason for the resignation. Tata Steel is in the process of merging its European operations with German steel major Thyssenkrupp AG to create a 50-50 joint venture. The proposed new company will be Europe’s second largest steelmaket after ArcelorMittal. In October 2018, the EU launched antitrust proceedings against the JV.
Lessors are planning to take back their leased aircrafts to the cash-strapped Jet Airways if the airline’s board meeting on February 14 fails to outline a firm recapitalisation plan. MC Aviation Partners, an aircraft-leasing subsidiary of MitsubishiCorp, which has leased five Boeing 737-800 aircraft, has not received leasing charges since October last year. Last week, Jet’s four aircrafts were grounded due to the non-payment of outstanding dues to lessors. Jet has a total debt of over Rs 8,000 crore at the end of September 2018. Jet’s lease dues have far exceeded the amount secured by way of letter of credits.
State-run lender PNB on Wednesday said that it has decided to place more than 4,000 properties all over India on e-auction as part of its loan recovery effort. According to the bank, the action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI) will help in achieving the recovery of Rs 26,000 crore during current Financial Year 2018-19. The bank has up to December 31, 2018 recovered Rs 16,600 crore.
Labour leaders, who hold half of the 20 seats on Thyssenkrupp's supervisory board, will not support the planned joint venture with Tata Steel if concessions in ongoing antitrust proceedings go too far. Thyssenkrupp and Tata Steel are planning to combine their European steel activities to create Europe’s second-largest steelmaker after ArcelorMittal. The combined entity will have around 48,000 workers and about 17 billion euros ($19.4 billion) in sales. “We won’t support a merger at any price,” Markus Grolms, vice chairman of Thyssenkrupp’s supervisory board and secretary at IG Metall, Germany’s biggest labour union, told Reuters on Wednesday.