Tata group stronger, more resilient and future ready: Chandrasekaran

Tata Sons chairman N Chandrasekaran on Monday said uncertainties will persist in the new year but exuded confidence that the diversified conglomerate is better placed to take on challenges.
He said the salt-to-software USD 110-billion group is "stronger, more resilient and future ready" now and is moving "decisively" on financial fitness and operational efficiencies.

The comments from the group chairman, whose appointment was recently termed as illegal by the NCLAT on a petition by his predecessor Cyrus Mistry, comes at a time when growth has slowed to a six-year low domestically and there are clouds of uncertainties globally as well.
In an email to employees, Chandrasekaran said there is a steady improvement at the group level performance but also pointed out that there is more work to be done in case of some companies, which are facing headwinds due to the economic conditions.
"Macro uncertainties will persist in 2020, but they will also be accompanied by new opportunities across different businesses and markets," Chandrasekaran said.

Tata Sons stake in Tata Motors to rise to 43.73% post preferential issue

Tata Sons, the promoter of major operating companies of the Tata Group, will increase its shareholding in Tata Motors to 43.73 per cent after the proposed Rs 6,500 crore preferential issue by the automobile manufacturer.
Last week, Tata Mortors' board had approved raising of Rs 6,500 crore via preferential allotment of securities to Tata Sons.

In a notice for extraordinary general meeting (EGM) seeking shareholders' nod, Tata Motors said as on September 30, 2019 Tata Sons held 35.3 per cent stake in the company.
Explaining the reasons for raising funds from its promoters, Tata Motors said the domestic business has been hit by slowdown which "significantly impacted sales volumes, profitability and cash flows and increased the net debt to unsustainable levels".
Tata Motors group has a net debt of Rs 50,000 crore out of which Tata Motors Ltd alone account for Rs 20,000 crore.
"Though the company remains optimistic on medium to long-term growth in the Indian market, the near-term demand situation is fluid and the slowdown has come at an inopportune time when capital expenditure intensity will remain high due to continued focus on exciting products and BS VI transition," Tata Motors said.
Also, the company said its British arm Jaguar Land Rover continues to face risk from external factors despite improvement in performance and recovery in China.
"However, JLR continues to face risks from a slowing global economy, Brexit related uncertainties, trade wars and disruptions from ACES (autonomous connected electric shared)," Tata Motors said.
JLR will require continued investments in products and technologies to drive growth in this situation, it added.
"Hence despite improving business fundamentals, these external risks could impact the company's and JLR's credit ratings and ability to refinance competitively," Tata Motors said.
The company further said, "The preferential allotment to its promoter, at a premium to the current market price, was chosen to minimise dilution impact and for a successful and speedy execution".
As part of the fund raising plan, Tata Motors will issue up to 20,16,23,407 ordinary shares at a price of Rs 150 per share aggregating Rs 3,024.35 crore.
It will also issue up to 23.13 crore (23,13,33,871) convertible warrants each carrying a right to subscribe to one ordinary share per warrant, at a price of Rs 150 per warrant aggregating Rs 3,470 crore.
Tata Motors' board had also approved in principle raising of additional funds up to Rs 3,500 crore through external commercial borrowings.
The company said the EGM will be held on November 22 and the ordinary shares and warrants will be allotted to Tata Sons within a period of 15 days from the date of passing of this resolution, subject to regulatory approvals.

Two directors Amit Chandra, Ranendra Sen leave at Tata Sons board meet

The board of directors of Tata Sons met on Friday. It also happened to be the last meeting for two of its directors — Amit Chandra and Ranendra Sen.
Sen, a non-executive independent director on the board, left as he reached his retirement age.

But for Chandra, it was a formal acceptance of his resignation.
With the two exits, the nine-member board of Tata group’s holding company (excluding Chairman N Chandrasekaran) will reduce to seven. It now comprises Venu Srinivasan, group chairman and managing director of TVS group; Harish Manwani, former group chairman of Unilever; Farida Khambatta, former member of IFC’s management group; Ralf Speth, CEO of Jaguar Land Rover; Ajay Piramal, chairman of Piramal and Shriram groups; Bhaskar Bhat, CEO of Titan; and Saurabh Agarwal, group CFO of Tata Sons.
ALSO READ: Tata Sons chairman N Chandrasekaran cautions on macro challenges in 2019
Chandra had expressed his desire to step down as non-executive director of Tata Sons last year, citing personal reasons.
His term was coming to an end in March. The managing director of Bain Capital had already stepped down as a trustee of various Tata Trusts. Chandra was also the only representative on the Tata Sons board representing the trusts.
Sen was inducted on Tata Sons’ board in April 2015. He was India’s ambassador to the US from 2004 to 2009. He was India’s ambassador to Mexico (1991-92), to the Russian Federation (1992-98) and the Federal Republic of Germany (1998-2002), and also served as high commissioner to the UK (2002-04).
Sen, 74, had also served on the board of Tata Motors as non-executive independent director for
two years.

Tatas confirm talks to buy Jet Airways; lenders to back the acquisition

The Tata Sons board on Friday discussed the proposal to buy a stake in struggling private carrier Jet Airways but did not take any decision on the acquisition.
The meeting, held at the Tata group headquarters, Bombay House, went on till late afternoon. Sources said the board was informed that the deal might take time as it was a complex transaction involving several stakeholders, including Etihad Airways, which owns 24 per cent in Jet Airways, and Singapore Airlines, which is Tata’s joint venture partner in Tata SIA Airlines.

Tata Sons said there had been growing speculation in the print and electronic media about the group's interest in Jet Airways.
“We would like to clarify that any such discussions have been preliminary and no proposal has been made,” Tata Sons said in a statement after the meeting. Jet Airways is facing liquidity problems and has delayed payments to employees and vendors. The airline has reported three consecutive quarters of net loss.
Besides Vistara, owned by Tata SIA, the Tata group runs AirAsia India in partnership with Malaysia’s Air Asia. Meanwhile, the Tatas' plan to acquire a controlling stake in Jet Airways has met with approval of the government-owned lenders, who plan to back the bid even though they will have to take a haircut on the airline’s Rs 84-billion debt. Sources said banks wanted the Tata group to take over the airline as the present management was finding it difficult to pay its suppliers and employees.
“There is no default on bank debt as yet by Jet, but banks are jittery and don’t want any repeat of Kingfisher Airlines,” said a source.
“Besides, a higher credit rating for Tata Sons as compared to Jet Airways is a confidence booster for lenders,” he added. In October, rating firm ICRA had downgraded Jet Airways’ debt to “B-“, saying the rating downgrade was due to delays in the implementation of the proposed liquidity initiatives by the management, which further aggravated its liquidity strain. The company continues to witness deterioration in its operating and financial performance because of the steep increase in jet fuel prices and rupee depreciation and its inability to pass on the same to the customers.
"Tata Sons’ “AAA” rating and its zero default track record is giving confidence to banks," said a source, adding that the Tatas paid off Rs 240 billion of its telecom debt to banks even though they made huge losses in the sector.
A senior executive with a Mumbai-based lender said haircut was the key element, but it could not be standalone for banks. It will have to be part of a restructuring package that will cover specific terms and conditions including obligations of owners, he added. Asked if package could be hammered under National Company Law Tribunal, he said these are matters of details and it is too early for decision on this count.
On Thursday, Bloomberg reported that the Narendra Modi government had also sought Tata Sons’ help to rescue the airline. It said the Tata group was in talks about a potential haircut to state-run banks on Jet’s loans while Airport Authority of India (AAI) might forgo some of its dues, it said. Two weeks ago, the AAI had sent a letter to Jet Airways, asking it to pay its dues. With both Jet and Tata Sons having common lenders, the debt that would get transferred to the Tatas (after any haircut), would be at much lower rates due to their better credit ratings. Lenders also cited the recent takeover of Bhushan Steel by Tata Steel where the banks took a steep haircut but the upfront payment was immediately made by the Tatas as per the timelines.
Tatas begin talks to buy Jet Airways; lenders to back the acquisition Lenders are also taking note of the warning signals issued by analysts after Jet’s recent results announcement for the quarter ended September. In a note, Edelweiss said that with yet another quarter of Rs 10 billion-plus loss, the net worth of the airline had deteriorated to negative Rs 98 billion. “The scheduled debt repayment of Rs 20 billion in the second half of fiscal 2019 makes matters worse. Although Jet Airways has been managing positive cash flow through delays in vendor payments/higher lease incentives, these measures are not sustainable and will fall short, in any case. Any default on debt would lead to lenders dragging the company to NCLT (National Company Law Tribunal), resulting in a potential shutdown of operations,” wrote Jal Irani of Edelweiss on Wednesday. “In the absence of a fund infusion/divestment, Jet Airways may default on the upcoming debt repayment. However, the entry of a strategic buyer may alleviate some of these concerns in the near term,” Irani added. Bankers said that with the government taking a keen interest in a Tata takeover, the stage is set for the acquisition of the airline outside of the Insolvency and Bankruptcy Code process.
The Tatas are in talks to buy a majority stake from Jet Airways Chairman Naresh Goyal, who owns 51 per cent in the airline, and merge their full-service airline Vistara with it. The merger will result in the merged entity getting 20 per cent of the market, according to trailing 12-month data ending September 2018.

No concrete proposal yet for taking over struggling Jet Airways: Tata Sons

Tata Sons on Friday said it has not made any concrete proposal for taking over the struggling carrier Jet Airways, and that it has held only "preliminary" discussions on the matter.
The Tatas, which already run two carriers-the full- service Vistara in a joint venture with Singapore Airlines and AirAsia India in a similar arrangement with Air Asia of Malaysia, have widely speculated to be planning a complete takeover of the Naresh Goyal-run airline with its international partner Singapore Airlines.

"We would like to clarify that any such discussions to take over Jet Airways) have been preliminary and no proposal has been made," a statement from the diversified conglomerate said after a board meeting in Mumbai.
The speculation has sent the Jet counter soaring over 40 per cent in the past five trading sessions alone.
The speculation has sent the Jet stock soaring. The counter closed over 8 per cent at Rs 346.85 on the BSE, whose index jumped 0.56 per cent to 35,457.16. The Jet stock opened with an over 14 per cent gap in the morning expecting a positive outcome from the Tata Sons board meeting.
The rumour of the rescue deal by the Tatas, reportedly being brokered by the government, sent Jet shares zooming 26.41 per cent Thursday.
Jet Airways' deputy chief executive and chief financial officer Amit Agarwal earlier this week had admitted that the company was in talks with "multiple interested parties" for fund infusion as well as selling six of its Boeing 777 planes along with a stake in its loyalty programme Jet Privilege.
Chairman and promoter Naresh Goyal along with his family owns 51 per cent stake in the airline, while Gulf carrier Etihad Airways owns 24 per cent in the cash-strapped airline, which earlier this week reported Rs 12.61 billion in loss for the September quarter against a profit of Rs 710 million y-o-y, making it the third straight quarter of heavy losses. This had the airline also putting as many as six of its Boeing 777s on sale to part-fund liquidity.
Media reports suggest that the parent company of Vistara, Tata-Singapore Airlines, is looking at an all-stock merger of Jet as part of the Tata group's plans to board Goyal's full service carrier.
In an exchange filing Thursday, Jet Airways described the media reports as speculative.

Tata Sons board may meet on Friday to decide on Jet Airways takeover

The board of Tata Sons is likely to meet on Friday to discuss a proposal to take over the Naresh Goyal-controlled Jet Airways, which is looking for investors to tide over liquidity crunch that it has been saddled with, according to people familiar with the development.
Airline's deputy chief executive and chief financial officer Amit Agarwal earlier this week had admitted that the company was in talks with "multiple interested parties" for fund infusion as well as selling six of its Boeing 777 planes and a stake in its loyalty progarmme Jet Privilege.
"Tata Sons board is meeting tomorrow (Friday) to consider the proposal to bid for Jet Airways," people in the know of the development told PTI.
While a spokesperson of Tata Sons, which already runs two airlines-- the full-service carrier Vistara in a JV with Singapore Airlines, and the low-cost carrier AirAsia India in JV with Air Asia of Malaysia, refused to comment on "speculation," Jet did not respond to PTI queries on the same.
ALSO READ: Tata Sons' chairman to present plan on proposed Jet buy to board: Report
"We do not comment on speculation," a Tata Sons, which originally owned the present national carrier Air India, spokesperson said when asked for confirmation.
Besides Goyal, who along with his family owns 51 per cent stake in the carrier, Gulf carrier Etihad Airways holds 24 per cent stake in the cash-strapped airline which earlier this week reported Rs 12.61 billion loss for the September quarter against a profit of Rs 710 million y-o-y, making it the third straight quarter of heavy losses.
This had the airline also putting as many as six of its Boeing 777s on sale to part-fund liquidity.
ALSO READ: Jet Airways hits four-month high; soars 105% from October low
Media reports suggest that the parent company of Vistara, Tata-Singapore Airlines, is looking at all-stock merger with Jet Airways as part of the Tata group's plans to board Goyal's full-service carrier.
In an exchange filing, Jet Airways described the media reports as speculative.
"...the subject news is speculative in nature and that there is no discussion or decision in the board which would require a disclosure...," the airline informed BSE.

ALSO READ: Tata ready to Jet set go? India's largest conglomerate looks to win the sky
According to reports, the two sides are inching towards a two-step transaction that would first see Jet Airways merging with Tata-SIA that runs Vistara through a share swap to form a new JV, which will have the Goyal family, Etihad, Tata Sons and Singapore Airlines as its partners.
"We are currently at various stages of discussions with multiple interested parties for both part stake sale in Jet Privilege and fresh equity infusion," Agarwal had told analysts during the post-earnings concall Tuesday.
He had also said the company hired investment bankers and consulting firms to carry out these tasks.
ALSO READ: No end to Jet Airways' free fall: Will the airline go Kingfisher's way?
The cash paucity in the country's second-largest airline by market share has resulted in delayed payments to some vendors and salaries to a section of its over 16,000 employees.

NCLAT declines stay on Tata Sons' conversion to pvt co; relief for Mistry

While declining to pass any order on the conversion of Tata Sons into a private company from a public limited firm, NCLAT today asked Tata Sons not to force Cyrus Mistry to sell his shares in the company till his appeal is pending.
The National Company Law Appellate Tribunal (NCLAT) said that pending the litigation here, the Cyrus Mistry camp which was seeking a status quo over it cannot be "forced to sell shares".

The bench said it would decide over the issue of conversion of Tata Sons to a private company at later stage during the pendency of appeal.
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A two-member bench headed by its Chairperson Justice S J Mukhopadhaya admitted Mistry's appeal and directed Tata Sons and other respondents to file their reply within 10 days.
NCLAT has listed the matter on September 24 for next hearing.
On August 14, NCLAT had reserved order over the interim relief sought by Cyrus Mistry camp.
Mistry had challenged the orders of National Company Law Tribunal (NCLT) which had dismissed his plea challenging his removal as chairman of the company.
In September last year, Tata Sons had received shareholders' nod to convert itself into a private limited company from being a public limited company, limiting in effect Cyrus Mistry family's ability to sell their stake to outsiders.
A public limited company allows shareholders to legally sell their stake to anyone, but a shareholder of a private limited firm cannot sell the shares to external investors.
ALSO READ: Tata Sons cannot force Cyrus Mistry to sell shares for now, says NCLAT
The Mistry camp had challenged the July 9 order of the Mumbai bench of the NCLT which dismissed their pleas against his removal as Tata Sons chairman, as also the allegations of rampant misconduct on part of Ratan Tata and the company's Board.
A special bench of the tribunal had held that the board of directors at Tata Sons was "competent" to remove the executive chairperson of the company.
NCLT bench members B S V Prakash Kumar and V Nallasenapathy had also said that Mistry was ousted as chairman because the Tata Sons' Board and its majority shareholders had "lost confidence in him".
Under the Companies Act 2013, an order of NCLT can be challenged before the National Company Law Appellate Tribunal (NCLAT). Mistry, who was the sixth chairman of Tata Sons, was ousted from the position in October 2016.
He had taken over as the chairman in 2012 after Ratan Tata announced his retirement.
Two months after his removal, Mistry's family-run firms Cyrus Investments Pvt Ltd and Sterling Investments Corp approached the NCLT as minority shareholders, against Tata Sons, Ratan Tata, and some other board members.
Mistry in his pleas primarily argued that his removal was not in accordance with the Companies Act and that there was rampant mismanagement of affairs across Tata Sons.
He also alleged that Tata Trust chairperson Ratan Tata and trustee N Soonawala interfered with the day-to-day operations of the group companies, they acted as shadow directors, and all of the above caused massive revenue loss for the group.

Tata Sons welcomes NCLT verdict in boardroom feud, Mistry to appeal ruling

Tata Sons on Monday said the National Company Law Tribunal (NCLT) order dismissing pleas of Cyrus Mistry vindicates that the group and its operating firms have always acted in a fair manner even as Mistry said he would challenge the ruling.
In a legal battle running for nearly two years, the NCLT, Mumbai, on Monday dismissed the pleas of Mistry challenging his removal as Tata Sons chairman in October 2016.

Welcoming the order, Tata Sons Chairman N Chandrasekaran hoped "that a finality will be given to the judgement of NCLT, by all concerned in the larger interest of companies, the shareholders and the public".
"The judgement has only reaffirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders," he said in a statement.
ALSO READ: NCLT overrules Cyrus Mistry in Tata boardroom battle, says he lost trust
The Tata Group has always been committed and will continue to be committed to transparency and good corporate governance of global standards, he added.
On the other hand, a statement from Mistry's office described the ruling as "disappointing although not surprising".
The ruling is in line with the earlier position expressed by the tribunal. An appeal on merits will be pursued, it said.
"We will continue to strive for ensuring good governance and protection of interests of minority shareholders and all stakeholders in Tata Sons from the wilful brute rule of the majority," the statement added.
An order of NCLT can be challenged before the National Company Law Appellate Tribunal(NCLAT).
ALSO READ: NCLT junks Mistry's plea: All you need to know about the boardroom battle
NCLT in Monday's ruling said it was not accepting Mistry's contentions that his removal was due to the result of mismanagement by the board and oppression of minority shareholders of the group.
Two months after Mistry was ousted as Tata Sons chairman in October 2016, he and his family-run investment firm, Cyrus Investments, moved the NCLT.
They moved the tribunal as minority shareholders against the corporate monolith and others, including Ratan Tata, alleging oppression and mismanagement.
According to the statement issued by Mistry's office on Monday, matters like TTSL, Air Asia, 'recovery of dues' from serial entrepreneur C Sivasankaran, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe and all present serious issues will be pursued.

Tata Sons slams US daily for 'defamatory' report on $50 mn gift to Harvard

India's Tata Sons has issued a strong rebuttal to a claim of a $50 million gift to the prestigious Harvard Business School, terming the US media report "false, disparaging and defamatory" and demanded an apology.
The holding company of the Tata Group, Tata Sons has raised strong objections to a May 21 article titled 'Harvard Business School's Ignominious Gift from Tata Trusts' in The Daily Caller, a conservative American news and opinion website.
Tata Sons has said that the "article is replete with false and inaccurate statements of fact and is defamatory to Tata Sons Ltd, its directors, its Chairman Emeritus Ratan N Tata, and all of them enjoy an enormous amount of goodwill and respect globally."
Tata Sons has formally written to The Daily Caller, giving a detailed and point-by-point rebuttal of the "several errors" and "blatantly false statements" in the article and demanded an apology and that the website take down the article.
The article is authored by Alan Beard, who according to his affiliation at the end of the article is managing director of Washington-based financial advisory firm Interlink Capital Strategies and a former adjunct professor at Georgetown University.
"...Given that the article is replete with incorrect, disparaging and defamatory statements and insinuations, we behove The Daily Caller to take immediate corrective steps to take down the article and publish an apology. We also call upon The Daily Caller to disclose all the materials relied upon by it for the purpose of publishing the article," Tata Sons said.
Tata Sons said the "reputational damage and harm" caused by the article is "irreparable" and the group "continues to explore" its remedies.
In the Daily Caller article, Beard refers to the 50 million dollar gift to Harvard Business School in 2010 from Tata Trusts and Companies, saying that the institution accepted "questionable funds that go against every tenet of good governance."

The article also questioned the use of the funds to construct Tata Hall at Harvard, saying "public money has apparently been misdirected to the most privileged and wealthy in the world."
Tata Sons strongly rejected these assertions in the letter to The Daily Caller, saying the gift of $50 million to Harvard Business School was collectively made by the Tata Companies, Sir Dorabji Tata Trust and the Tata Education and Development Trust.
"It is untrue that the Tata Trusts had alone made the gift of $50 million."
Tata Sons also strongly rejected the claim made in the article that the $50 million gift agreement was "brokered" between HBS Dean Nitin Nohria and Ratan Tata. Tata Sons said that during his service on the Board, in 2008, Ratan Tata was approached by its former Dean Jay Light to consider a gift to HBS to build a new executive education building.
"Nitin Nohria had no involvement whatsoever in these discussions and it is a false statement that the gift was brokered between him and Tata," Tata Sons said.
Tata Sons also asserted that it was "incorrect and false" to allege that public money had been "misdirected."
"To state that funds were 'taken' from 'poor Indians' is not only false, but reckless reporting. It is unfortunate that no details of the enormous philanthropic work carried out by the Tata Trusts have even been reported."
The article also noted that Nohria, as non-executive director on Tata Sons Board, had voted to out former Tata Sons Chairman Cyrus Mistry. Rejecting this, Tata Sons said Mistry had been removed as he had lost the confidence of "7 out of 9 directors" of Tata Sons.
"From the false statements in the article, it is now apparent that the article is motivated, aimed to malign the reputation of Tata Sons, its directors and Tata and probably that's the reason for irresponsible reporting and intentionally not approaching Tata Sons or Tata for the correct facts," Tata Sons said.
Responding to a reference in the article that in the two months following Mistry's replacement as Executive Chairman, the value of Tata's listed companies dropped by $17 billion, Tata Sons said that the article failed to add that Mistry had, a day after being removed, written a "vitriolic email to the directors of Tata Sons wherein he made several unsubstantiated and false allegations" in relation to Tata Sons and other companies in the Tata group.
"The article is irresponsible, lacking in thorough investigation and openly partisan," Tata Sons said adding that the article's "one-sided presentation, motivated and malicious insinuations are plainly visible and buttressed by the fact that neither the Daily Caller nor the article's author approached the Tata Group for any comment and response prior to publication," Tata Sons said.