Kolkata :ArcelorMittal on Friday announced that the Committee of Creditors (CoC) to Essar Steel India Limited (ESIL) has voted in favour of the company’s acquisition.
ESIL’s resolution professional (RP), on behalf of the CoC, has issued the company with a Letter of Intent (LOI) stating that the company has been identified as the successful applicant.
The resolution plan, as disclosed by Arcelor, includes an upfront payment of Rs 420 billion towards ESIL’s resolution debt, with a further Rs 80 billion capital injection into ESIL to support operational improvement, increase production levels and deliver enhanced levels of profitability.
Arcelor plans to increase ESIL’s finished steel shipments to 8.5 million tonnes over the medium-term. The long-term aspiration was to increase shipments to 12 and 15 million tonnes through the addition of new iron and steelmaking assets.
ESIL’s current level of annualised crude steel production is 6.5 million tonnes. ESIL also has iron ore pellet facilities in the east of India with a current annual capacity of 14 million tonnes per annum.
Arcelor will jointly own and operate ESIL in partnership with Nippon Steel & Sumitomo Metal Corporation (NSSMC). Arcelor and NSSMC expect to finance the joint venture through a combination of partnership equity (one-third) and debt (two-third) and Arcelor anticipates that its investment in the joint venture will be equity accounted.
Nippon believes that, by bringing together the strengths of both companies, NSSMC and AM (ArcelorMittal) will be able to turn around ESIL to be a competitive steel manufacturer and contribute to further development of Indian steel industry and Indian economy, the company said.
Voting on the ArcelorMittal plan which concluded on Thursday secured more than 92 per cent of the CoC’s voting share.
A lender said that the letter of intent was issued in favour of Arcelor Thursday night and the company had accepted it. The resolution plan is expected to be filed with the NCLT shortly.
In a surprise move, however, the Ruias of Essar Steel made an offer to the CoC after the conclusion of the voting, to settle the entire claims of Rs 543 billion under Section 12A of the IBC. It allows a company to exit the bankruptcy process if it offers to repay the dues and 90 per cent of the lenders accept the proposal.
“The courts will take a view on the offer,” the lender said. The legal battle in the Essar case is likely to continue.
India one of world’s fastest growing large economies:IMF
Washington: India has been one of the fastest growing large economies in the world, the International Monetary Fund (IMF) has said, asserting that the country has carried out several key reforms in the last five years, but more needs to be done.
Responding to a question on India’s economic development in the last five years at a fortnightly news conference here, IMF communications director Gerry Rice Thursday said, “India has of course been one of the world’s fastest growing large economies of late, with growth averaging about seven per cent over the past five years.”
“Important reforms have been implemented and we feel more reforms are needed to sustain this high growth, including to harness the demographic dividend opportunity, which India has,” he said.
Details about the Indian economy would be revealed in the upcoming World Economic Outlook (WEO) survey report to be released by the IMF ahead of the annual spring meeting with the World Bank next month, he said.
This report would be the first under Indian American economist Gita Gopinath, who is now IMF’s chief economist.
“The WEO will go into more details. But amongst the policy priorities, we would include accelerate the cleanup of banks and corporate balance sheets, continue fiscal consolidation, both at centre and state levels, and broadly maintain the reform momentum in terms of structural reforms in factor markets, labour, land reforms and further enhancing the business climate to achieve faster and more inclusive growth,” Rice said.
Fitch cuts India GDP growth forecast for FY20 to 6.8 pc
New Delhi: Fitch Ratings on Friday cut India’s economic growth forecast for the next financial year starting April 1, to 6.8 per cent from its previous estimate of 7 per cent, on weaker than expected momentum in the economy.
“While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8 per cent, followed by 7.1 per cent in FY21,” Fitch said in its Global Economic Outlook. Fitch Ratings cut India’s FY19 GDP growth forecast to 7.2 per cent from 7.8 per cent on December 6.
The rating agency has also cut growth forecasts for FY20 and FY21 to 7 per cent from 7.3 per cent and 7.1 per cent from 7.3 per cent, respectively. According to Fitch, the RBI has adopted a more dovish monetary policy stance and cut interest rates by 0.25 percentage at its February 2019 meeting, a move supported by steadily decelerating headline inflation.
“We have changed our rate outlook and we now expect another 25 bp cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged,” it said. “On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers,” it added. Fitch said, it’s benign oil price outlook and expectations of accelerating food prices in the coming months should support rural households’ income and consumption.
India’s total wireless subscribers grew to 1.18 bn in January 2019: TRAI
New Delhi: India’s total wireless subscribers grew by 0.51 percent to 1,181.97 million (1.18 bn) in January 2019, as per a report by telecom regularor TRAI.
Total wireless subscribers (GSM, CDMA & LTE) increased from 1,176.00 million at the end of December 2018 to 1,181.97 million at the end of January 2019, thereby registering a monthly growth rate of 0.51 percent, the TRAI report said.
As on January 31, 2019, the private access service providers held 89.95 percent market share of the wireless subscribers whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 10.05%, the regulator said in its report.
The Wireless subscription in urban areas increased from 647.52 million at the end of December 2018 to 654.20 million at the end of January 2019, however wireless subscriptions in rural areas declined from 528.48 million to 527.77 million during the month.
The monthly growth rates of urban wireless subscription was1.03 percent and rural wireless subscription was 0.13%, the report said
The Wireless Tele-density in India increased from 89.78 at the end of December 2018 to 90.15 at the end of January 2019.
The Urban Wireless Tele-density increased from 155.48 at the end of December 2018 to 156.85 at the end of January 2019, however Rural Wireless Tele-density declined from 59.15 to 59.04 during the same period.
The share of urban and rural wireless subscribers in total number of wireless subscribers was 55.35 percent and 44.65 percent respectively at the end of January 2019.
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