New Delhi: The troubles for Anil Ambani-led Reliance Communications (RCom) are far from over. In a meeting with top officials from the Department of Telecommunications (DoT), Reliance Jio Infocomm made it absolutely clear that in accordance with the agreement between the two operators, Jio would not be responsible for any previous liabilities of the latter.
DoT in the meeting said it would not be able to grant the no objection certificate (NoC) until RCom gave an undertaking that it would be responsible for any liabilities which might arise.
“Jio said they would like the agreement to be cleared, but cannot give any such undertaking as asked by DoT. So it is now up to RCom,” an official in the know of the meeting said.
Neither RCom nor Jio commented on the issue.
The tripartite meeting on Wednesday was held between RCom, Jio, and DoT to try and reach an agreement over a pending NoC that the telecom ministry had to give for spectrum trading between the two operators. With Jio refusing to budge from its earlier stance, the final outcome of the deal now lies with RCom, which has the option of moving the Supreme Court (SC) to challenge DoT’s stance.
On December 14, DoT had told the apex court that it would issue the NoC to RCom for the spectrum sale within two days, provided the company’s arm, Reliance Realty, did not sell the “preference shares that are reflected in the financial statement of 2017-2018.” RCom had then assured the SC that it would not do so without prior permission from the department.
The government’s nod for spectrum sale was in limbo after Jio wrote a letter to DoT on Friday seeking clarifications and assurances that it would not be held liable for RCom’s dues related to airwaves once its deal with RCom was completed. The condition forced DoT to hold its NoC as the rules state that the government can ask operators to clear dues before it gives a nod.
Earlier DoT had insisted that the RCom furnish bank guarantees worth Rs 30 billion. It had rejected the company’s offer to pledge land to cover the amount. The problem, DoT officials said, with the corporate guarantee backed by land was that it could get into legal tangle, which was not something the government favoured. A bank guarantee would have been easily encashable, they said.
The impasse following the meeting could also mean revival of insolvency against RCom and its arm, Reliance Infratel.
Ericsson India had moved an insolvency petition against RCom, which was accepted by the Mumbai Bench of the National Company Law Tribunal (NCLT). Later, the two companies reached an agreement in the NCLAT. According to the agreement, RCom would pay Rs 5.5 billion to Ericsson, failing which the latter could revive its insolvency against the telecom company.
RCom had then approached the apex court seeking an extension of the deadline, which was initially September 30 and later changed to December 15.
The top court, however, had then made it clear that there would be no extensions beyond that. It had also directed RCom to pay Ericsson interest at the rate of 12 per cent per annum for missing the September 30 deadline.
India to get extra oil from major producers to make up for loss of Iranian oil: Pradhan
New Delhi: India will get additional supplies from other major oil producing countries to compensate for the loss of Iranian oil, Petroleum and Natural Gas Minister Dharmendra Pradhan said.
The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which had allowed Iran`s eight biggest buyers, most of them in Asia, to continue to import limited volumes.
Pradhan said on Twitter that India has put in place a robust plan for adequate supply of crude oil to refineries.
“Indian refineries are fully prepared to meet the national demand for petrol, diesel and other petroleum products,” he said.
Reuters last week reported that Indian refiners are increasing their planned purchases from the nations of the Organization of the Petroleum Exporting Countries (OPEC), Mexico and the United States to hedge against loss of Iranian oil.
Refiners in India, the world
s third-biggest oil importer and Irans top oil client after China, had almost halved their Iranian oil purchases since November when petroleum sanctions went into effect. At the time, the United States granted waivers from sanctions, known as significant reduction exceptions (SRE), for six months to countries that purchased some amounts of Iranian crude, including India.
U.S. President Donald Trump said on Monday that Saudi Arabia and other OPEC nations could “more than make up” for any drop in Iranian oil supplies to global markets now that the waivers are ended.
Saudi Arabia, the world`s biggest oil exporter, said on Monday it would coordinate with other oil producers to ensure an adequate crude supply and a balanced market.
Industry delegation calls on RBI Guv, discusses steps for MSMEs, NBFCs
Mumbai: A delegation led by PHD Chamber President Rajeev Talwar met RBI Governor Shaktikanta Das here on Monday and discussed concerns related to the growth of MSMEs, NBFCs, affordable housing and the real estate sector.
The chamber in its submission has also sought further cut in the repo rate in the coming quarters.
“PHD Chamber in its submission has urged RBI to increase the limit for classifying over dues of MSMEs to 180 days from the current level of 90 days as working capital cycle of MSMEs keeps prolonging due to delays in realisation of their bills/receivables,” said Talwar.
It has also requested that at least one year period should be considered for eligibility of MSMEs’ stressed and NPA accounts under the restructuring scheme.
All such Accounts which turned into defaulters or became NPAs after January 1, 2018 should be covered under the policy of RBI for being eligible for restructuring, said Sanjay Agarwal, Vice President, PHD Chamber.
It was also recommended that the loans given by banks to NBFCs for the purpose of on-lending to micro, small and medium enterprises (MSMEs) should be treated as indirect finance to MSMEs eligible for classification under the Priority Sector lending of banks, said D K Agrawal, Senior Vice-President.
The industry body said that infrastructure financing should ideally be carried out by specialist players like Infrastructure Finance Companies (IFCs).
“IFCs should be allowed to deploy a minimum of 50 per cent of their total assets in infrastructure loans, while the rest may be deployed towards financing allied and ancillary activities for infrastructure projects, which are essentially non-infra in nature,” PHD Chamber said.
The chamber said that IFCs should be allowed to issue tax-free bonds and on-tap resource mobilisation through issuance of Non-Convertible Debentures (NCDs) to retail investors.
Jet Airways waits for buyer as rivals muscle in on territory
Mumbai: A revival of Jet Airways India Ltd., once the nation’s biggest carrier by market value, is at risk as days roll by since its operations were completely halted.
While the cash-strapped carrier awaits potential investors to pump in money, rivals are aggressively going after its most prized assets. A government desperate to limit public backlash after flight ticket prices escalated is parceling off landing and parking slots at congested airports. Lessors are also adding to the woes by allocating grounded aircraft to competitors.
“It appears to me that lenders are not very confident of getting any serious bid,” said Harsh Vardhan, chairman of New Delhi-based Starair Consulting. “You can not hold on to slots, and planes are not Jet Airways’ property. They have to find a buyer as soon as possible.”
Jet Airways, the oldest surviving private airline which broke into a monopoly of Air India Ltd., had a fleet of 124 and flew profitable routes like connecting India, the fastest growing aviation market in the world, with London and Toronto. With nearly 23,000 jobs at stake, its collapse last week couldn’t have at worse time for Prime Minister Narendra Modi who’s seeking a second term based on his business-friendly image.
While the arrangement to give Jet’s landing slots and aircraft to rivals is temporary, the process to swap them again is complicated and is the domain of airports. It may get more difficult once rivals start new flights and sell tickets in advance, and that could potentially leave close to nothing for a potential new owner.
Jet Airways started flying in the early-1990s after India liberalized its economy, and quickly cemented its spot as a leading airline offering an alternative to Air India, while averting several downturns that forced dozens of its peers to close shop. But a boom of budget airlines in the mid 2000s, on top on rising fuel prices and a weakening rupee, kept adding to Jet Airways’ costs in the notoriously price-sensitive market.
The airline, which controlled 13.6 percent of the local market as recently as January, needs 85 billion rupees ($1.2 billion) to restart operations. So far, it isn’t clear whether Jet Airways will find a buyer to fly again, or if lenders will take it to a bankruptcy court. Over the weekend, local media reported Mukesh Ambani, Asia’s richest man, and salt-to-software conglomerate Tata Group are keen to pick up a stake or purchase Jet’s assets.
Shares of Jet Airways gained as much as 9.2 percent to 168.95 rupees in Mumbai and were trading at 167.35 rupees as of 11:06 a.m. local time. The shares plummeted 36 percent in the previous two trading sessions, after all flights were grounded last week.
Local carriers have been quick to take advantage of the situation. SpiceJet Ltd. plans to induct more than a dozen Boeing Co. 737 planes, offering flights on the routes previously operated by Jet Airways. Market leader IndiGo, operated by InterGlobe Aviation Ltd. has also added additional flights from New Delhi and Mumbai, the two busiest airports of the nation which hardly had any landing slots available when Jet Airways was operating.
Ambani, who controls Reliance Industries Ltd., may partner Abu Dhabi’s Etihad Airways PJSC to pick up a stake in Jet Airways, while also exploring a possible bailout of state-run Air India Ltd, the Indian Express newspaper reported over the weekend. Etihad, which already owns 24 percent of the Jet Airways, has put in an initial bid showing interest in purchasing a stake in the carrier, the newspaper said.
The Tata Group may jump into the fray if the sale process fails, and bankruptcy proceedings kick in, the Mint newspaper reported separately, citing two unidentified people. The government reached out to the group, which has a majority stake in two local airlines, last year to potentially bail out the airline but it did not materialize into a deal.
A Reliance spokesman declined to comment but said the company evaluates various opportunities on an ongoing basis. A Tata group representative also declined to comment.
With lessors taking over aircraft and slots going to rivals, the value of Jet Airways has eroded, said Mark Martin, founder of Dubai-based Martin Consulting.
“The lenders should have paid some money to lessors and urged them not to take over the aircraft while the sale process is on, and should have finalized a payment plan for past dues over the next 18 months, Martin said. “But they did not, and that’s really unfortunate.”