Bankruptcy proceedings, TATA Group to acquire Air India, IHH withdraws from Fortis- Weekly Digest #45

Sensex closed at a record high of 31,311 points and Nifty at 9,657 points as RBI asked lenders to start bankruptcy proceedings against big defaulters. It has raised the hopes of a speedy resolution to the bad loans issue.
The Income tax department has demanded all dividends due to Cairn Energy Plc from Cairn India (Vedanta Ltd) against part of the ₹10,247-crore tax levied on the company due to the retrospective amendment.
Mercedez-Benz has named Piyush Arora, present head of manufacturing at its Pune plant as the person-in-charge for its South-East operations.
Volkswagen has named Steffen Knapp as the director as the director of Volkswagen Passenger Cars India. He succeeds Michael Mayer, who is now head of sales and marketing for VW China.
IDBI bank took bankruptcy proceedings against Lanco Infratech as it took the resolution to the insolvency courts. The stock tanked by 20% after this news.

ABB, the Swedish-Swiss multinational, is in discussions with Larsen & Toubro to acquire its electrical and automation division. The deal is to be expected to be valued at ₹14,000-18,000 crores.
Reliance Communications, under the pressure from its lenders, has put its property monetization exercise on fast-track and is targeting an overall 80% (₹45,000 crores) by December 2017.
Adani Ports and Special Economic Zone plans to raise at least $500 million through overseas bond sales. The amount to be utilised for refinancing some current loans and fund expansion.

The SEBI eased rules on the restructuring of distressed companies, making it easier for banks to sell them off. Sebi also tightened the rules for participatory to clamp down on possible misuse of the instrument.
The government has given banks, post offices and district central cooperative banks a month’s time to deposit any demonetised currency still in their possession.
The Tata Group plans to buy the stake of debt-ridden Air India. It plans to acquire 51% stake in the carrier company. Interestingly, Air India was founded 85 years ago by Tata Group.
The government sold its 2.5% stake in L&T to state-run entities, including SBI and LIC, for about ₹4,200 crore.
With bids cumulating at ₹62,500 crores, CDSL’s IPO oversubscribed by 170 times. It has set the subscription record in the history of D-street. QIP subscribed 149 times while the HNI was subscribed at 563 times.

SBI has been authorised to refer Essar Steel, Bhushan Steel and Electrosteel to the bankruptcy court. This has raised the possibility that some of these companies could be merged in an effort to return them to health.
Integrated Healthcare Holdings of Malaysia has abandoned its pursuit of Fortis Healthcare and SRL Diagnostics, thus dampening the efforts of its promoters to reduce their debt by selling off their healthcare assets.
Reliance Industries and partner BP have withdrawn the gas price-related arbitration against the government. This will enable the companies to claim the premium price for output from deep-sea fields.
Rural Electrification Corp plans to raise $300 million by selling bonds to overseas investors. The proceedings to be utilised to finance environment-friendly projects.

PNB has been given green signal to begin bankruptcy proceedings against Bhushan Power and Steel. It is one of the largest defaulters among the 12 companies identified by the RBI.
Wall Street Journal reported that the British drinks giant Diageo were aware that the United Spirits Ltd management, led by Vijay Mallya, had diverted money to the nearly-bankrupt Kingfisher Airlines before it took over the Bengaluru-based spirits firm.
Fortis stock plunged by 13% to ₹172.30 following IHH Healthcare’s decision to back out of a deal to buy a controlling stake.

Source: The Economic Times
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