Clock is ticking for Rs 3.8 trn stressed assets; 70 firms may land in NCLT

The fate of about 70 big-ticket stressed accounts with loans of over Rs 3.8 trillion is uncertain as the deadline of August 27 for firming up resolution plans for them approaches. Failing to stitch a plan might leave lenders with no choice but to take these companies to the bankruptcy court.
The Reserve Bank of India’s (RBI's) new rules for resolving stressed assets (issued on February 12) require banks to finalise a plan within 180 days of default. For large defaulting accounts (Rs 20 billion and above), the rules came into effect from March 1. If lenders are unable to ...

Sushma jobless, RSS like Muslim Brotherhood: Rahul's UK speech highlights

Rahul Gandhi on Friday launched a scathing attack against the BJP government on a host of issues ranging from jobs, Women's Reservation Bill and foreign policy. Gandhi made these comments in London while addressing two different meetings at the International Institute of Strategic Studies (IISS) and London School of Economics.
Gandhi also said that the General Election in 2019 is going to be fought between the BJP and the Opposition alliance as for the first time there has been a "systematic attack" on Indian institutions.
Rahul also said that the Congress was not involved in the anti-Sikh riots of 1984 in which nearly 3,000 Sikhs were killed.
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Here's what Gandhi said in London:
1. Doklam standoff was an event for Modi: Rahul Gandhi slammed Prime Minister Narendra Modi, saying he views the Doklam issue as an event and added that Chinese presence is still there. "I don't have the details of Doklam, so I can't answer how I would've handled it differently. What I can tell you is that Doklam is not an unrelated episode, it's not a one-off, it is not a border issue, it is a strategic issue."
"It is a part of a sequence of events and Doklam was a crisis that happened because the government is episodic," he added.
2. India facing job crisis: Gandhi on Friday said that India was facing a "full-blown crisis" of unemployment and the Government was refusing to admit it. "The jobs crisis can be addressed, but India has to first accept that there is a problem," said Gandhi.
Comparing China with India, he said: Where China creates 50,000 jobs a day, only 450 jobs are created in a day in India. This is a catastrophe. Gandhi said that India has a bigger role to play for the world as the nation is more refined now.
3. 2019 election to be fought between BJP and Opposition alliance: In an interaction with the National Indian Students and Alumni Union (UK) at the London School of Economics, Gandhi said that the first priority of the Congress is to defeat the Bharatiya Janata Party (BJP) and stop the institutions in India from being encroached upon.
"Next election is pretty straightforward. On one side there is BJP and on the other side, there is every opposition party. The reason is, for the first time, Indian institutions are under attack," he said.
ALSO READ: BJP govt changed Rafale deal to favour industrialist: Rahul Gandhi in UK
"What we're defending is the onslaught on the Indian Constitution. I and the entire opposition have agreed, that our first priority is to stop the poison being spread," Gandhi said.
4. Congress not involved in 1984 anti-Sikh riots: To a question being asked by the CNN-News18 at an event in the UK Parliament about the 1984 riots, Gandhi said: "I have no confusion in my mind about that. It was a tragedy, it was a painful experience. You say that the Congress party was involved in that, I don't agree with that. Certainly there was violence, certainly, there was tragedy."
"So, I am against any sort of violence against anybody on this planet. I get disturbed when I see anybody being hurt. So, I condemn that 100 per cent and I am 100 per cent for punishment for those involved in any violence against anybody. That's crystal clear," said Gandhi.
5. Will co-operate with BJP if they pass Women's Reservation Bill: Rahul Gandhi said that his party would happily co-operate with the BJP if they wish to pass the Women's Reservation Bill in Parliament.
The Women's Reservation Bill was passed by the Indian Parliament's upper house Rajya Sabha on March 9, 2010, but has been stalled in the Lok Sabha.
"I have sent a message to the Prime Minister, the day he wishes to pass the Women's Reservation Bill, entire Congress party is happy to co-operate with BJP," Gandhi said.
6. Sushma has no job, spends time on people's visas: Rahul Gandhi while speaking at the International Institute of Strategic Studies (IISS) said that the there is a monopoly of PMO on the External Affairs Ministry and that External Affairs Minister Sushma Swaraj has no job except spending a lot of time working on people's visas.
Sushma Swaraj really has nothing to do, though she is quite a capable lady, the Congress leader said. "If you actually give her the power to do something, she could probably break that monopoly (in the ministry)."
7. Govt lacks coherent strategy for Pakistan: Gandhi on Friday said that the Narendra Modi government lacks a "coherent strategy" towards Pakistan and attacked Modi for his foreign policy based on "hugs".
Taking a dig at the Prime Minister, Gandhi said: "I've also been trapped in the hug politics but I don't think you can run foreign policy based on hugs. It doesn't work. We have tremendous structures in our country, institutional structures that understand these things, one has to use those structures to develop strategy."

ALSO READ: Eyeing 2019 election, Rahul Gandhi sets focus on small businesses
The Congress leader said some of the institutions in Pakistan are hostile towards India and some are attacking India. "So we don't want to talk to them."
8. RSS similar to Muslim brotherhood: Rahul Gandhi compared the Rashtriya Swayamsevak Sangh (RSS) with the Muslim Brotherhood, a Sunni Islamist organization, and said the RSS wanted to "capture" every institution of the country. The RSS was trying to change the very nature of India, he alleged.
"What we are dealing with is a completely new idea. It is similar to the idea that exists in the Arab world in the form of Muslim Brotherhood. And the idea is that an ideology should run through every institution, one idea should crush all other ideas."
9. BJP govt changed Rafale deal to favour industrialist: Rahul Gandhi alleged that the BJP government changed the multi-billion dollar Rafale contract to benefit an industrialist who was in debt. Gandhi has been attacking the BJP government BJP government for allegedly inking the deal at a much higher price than the one the previous UPA regime had negotiated to benefit "one businessman".
"Our government signed a contract with Dassault and gave the contract to HAL. The price we were paying was approximately 5.2 billion (Rs 520 crore).
"Then something happened, Prime Minister Modi went to France, changed the contract from 126 planes to 36 planes, changed the pricing structure from 5.2 billion to 16 billion and magically, Mr Anil Ambani was given the contract," Gandhi said.

Patanjali moves NCLT against Ruchi Soya lenders approving Adani Wilmar bid

Ramdev-led Patanjali Ayurved has approached the NCLT challenging the decision by Ruchi Soya's lenders to approve Adani Wilmar's Rs 60 billion (Rs 6,000 crore) takeover bid.
The matter is expected to come up for hearing on Monday (August 27) before the Mumbai bench of the National Company Law Tribunal (NCLT), sources said.

When contacted, Patanjali Spokesperson S K Tijarawala declined to comment, saying that matter is sub-judice.
A spokesperson of Adani Group also declined to comment.
On Thursday, Adani Wilmar's bid was approved by the committee of creditors (CoC) of the bankruptcy-bound Ruchi Soya with about 96 per cent votes in favour.
The resolution professional has to seek NCLT approval after the lenders choose a bid.
ALSO READ: Ruchi Soya lenders approve Adani Wilmar's Rs 60-billion resolution plan
Adani Wilmar and Patanjali group have been engaged in a long-drawn battle to take over Ruchi Soya.
While Adani Wilmar emerged as the highest bidder with a Rs 60 billion (Rs 6,000 crore) offer, Patanjali group came second with a Rs 57 billion (Rs 5,700 crore) bid.
Patanjali Ayurved had earlier sought clarification from the RP (resolution professional) of Ruchi Soya related to eligibility of Adani Group to participate in the bidding process.
ALSO READ: Adani Wilmar's Rs 60-billion bid for Ruchi Soya gets approval of CCI
It also sought to know the parameters adopted by the RP to declare Adani Wilmar as the highest bidder.
The Haridwar-based firm had also questioned the appointment of Cyril Amarchand Mangaldas as the RP's legal advisor as the said law firm was already advising Adani Group.
Patanjali was asked to submit a revised bid by June 16 to match or better the highest offer of Rs 60 billion (Rs 6,000 crore) by Adani Wilmar under the Swiss Challenge system adopted by the RP and the committee of creditors.
However, Patanjali wrote to the RP seeking clarifications instead of submitting a fresh bid.
Adani Wilmar has been selected by the CoC after two-rounds of bidding.
Ruchi Soya, which is facing the insolvency proceedings, has a total debt of about Rs 120 billion (Rs 12,000 crore). The company has many manufacturing plants and its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.
ALSO READ: Why is everyone keen on buying debt-ridden Ruchi Soya? All you need to know
In December 2017, Ruchi Soya Industries entered into the Corporate Insolvency Resolution Process (CIRP) and Shailendra Ajmera was appointed as the RP.
The appointment was made by the NCLT on the application of the creditors Standard Chartered Bank and DBS Bank, under the Insolvency and Bankruptcy Code.

Tim Cook to Indra Nooyi, US CEOs wary of Donald Trump's immigration policy

Dozens of top US business leaders including Apple’s Tim Cook, JPMorgan Chase & Co.’s Jamie Dimon and Pepsico’s Indra Nooyi signed a letter expressing “serious concerns” about the Trump administration’s immigration policy changes and their potential to undermine economic growth.
The letter focussed on recent changes in the area of high-skilled immigration. The executives decried moves that were said to include “inconsistent immigration decisions” and the likely curtailing of work permits for spouses of some high-skilled immigrants.

Those shifts were “unfair” and created a risk of “unnecessary costs and complications,” the CEOs said in a letter to Homeland Security Secretary
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Kirstjen Nielsen.
“As the federal government undertakes its legitimate review of immigration rules, it must avoid making changes that disrupt the lives of thousands of law-abiding and skilled employees, and that inflict substantial harm on U.S. competitiveness,” the executives said.
H1B visas
The letter, dated Wednesday, was coordinated by the Business Roundtable, a Washington-based policy and lobbying group consisting of top US chief executives. It was first reported by Fortune. It highlighted the current treatment of applications for H1B visas for skilled foreign workers, a category often seen as synonymous with the technology industry but that also includes architects, economists, physicians and teachers, among other professions. A policy brief released in July by the National Foundation for American Policy showed denials of such visas are on the rise.
Tim Cook to Indra Nooyi, US CEOs wary of Donald Trump's immigration policy
“The Trump administration is limiting the admission of high-skilled foreign nationals, even though economists believe America greatly benefits from the entry of foreign-born scientists and engineers,” the Arlington, Virginia, group said in its brief.
In their letter, the CEOs said that the Department of Homeland Security was allowing inconsistent applications of policy in case reviews and was was failing to tell workers what information they need to submit, creating uncertainty for workers. The executives also complained the department has in some cases started deportation proceedings after denials even among current workers who “have complied with immigration laws and intend to promptly depart the country.”
The roundtable, which Dimon chairs, released the letter “on behalf of the CEO members” on Thursday.
Others executives who signed included Doug Parker of American Airlines Group, Laurence Fink of BlackRock, Marc Benioff of Salesforce.com and Omar Ishrak of Medtronic Plc.

RCom gets relief from overseas bondholders; plan cleared for a 42% haircut

In a development that takes it closer to averting bankruptcy proceedings, Reliance Communications (RCom) has secured approval of its overseas bondholders for the revised terms. The Anil Ambani-owned company had defaulted on a $300-million bond last year.
In a meeting held in London on Friday, over 83 per cent of those holding the bonds, now due in 2020, cleared the plan. According to the revised proposal, RCom will offer cash up to $118 million and $55 million bonds, to be issued by Global Cloud Xchange, the holding company of GCX, an overseas subsidiary of RCom.
Following the agreement, the bondholders will receive the new bonds of Global Cloud Xchange, which will be unlisted, unsecured and earn a half-yearly coupon of 0.1 per cent, with a maturity of four years. The new offer indicates a haircut of over 42 per cent of the face value.
It was crucial for RCom to win the approval of its bondholders, because according to the inter-creditor agreement (ICA) signed by the Indian banks, the local lenders can agree to a debt restructuring only if the dollar bonds are also restructured. The August 27 deadline, set by the RBI to settle debt, expedited the settlement with the bondholders. In its earlier offer to the bondholders, RCom had asked them to either tender their existing notes at a steep discount or exchange them for $45 million new zero-coupon notes due in 2023, to be issued by Global Cloud Xchange. RCom was earlier offering to pay 3.5 per cent of the principal for the notes. But the bondholders wanted more incentives, as they were sitting on losses. As on Friday, the bonds were trading at 38.9 cents to a dollar, which meant a 62 per cent hit taken by them. On Friday, the bonds finally closed at 38.94 to a dollar.
ALSO READ: RCom completes sale of some assets to Reliance Jio for Rs 20 billion
RCom defaulted on the bonds last year after it failed to repay its debt worth Rs 447 billion to Indian banks. In June last year, the Indian banks signed a standstill agreement with RCom. According to the agreement, RCom received a moratorium on payment of interest and principal dues to banks till December 2018. This was after RCom promised to sell its telecom infrastructure to elder brother Mukesh Ambani owned Reliance Jio for Rs 181 billion. The proceeds of the sale is to be used to repay bank debt. RCom Chairman Anil Ambani also promised to raise an additional Rs 100 billion by selling real estate to repay bank debt.

RCom gets relief from overseas bondholders; plan cleared for a 42% haircut
RCom, like many other smaller telecom players like Tata Teleservices and Uninor, failed to face the intense competition unleashed by Reliance Jio on the incumbents.
While the margins of big three players — Bharti Airtel, Vodafone and Idea Cellular — fell drastically, the other smaller players simply exited the sector.
ALSO READ: RCom reinstates Rs 7.74-bn bank guarantees with DoT; asset sale on track
The Indian lenders were also keen that RCom settles with its bondholders as the banks are sitting on a mountain of bad debts worth almost $210 billion, which has led to massive write-offs and fund infusion from the Indian government.
The RCom debt would have increased their NPA burden. Recently, Life Insurance Corporation had to invest Rs 94 billion in IDBI Bank so that the latter can meet its financial requirements. While RCom is one of the few firms which is selling assets to repay its debt, many other Indian companies have been sent to the National Company Law Tribunal for debt resolution by banks under the Insolvency and Corporate Code, 2016.
Seeks shareholders’ nod to enhance borrowing limits
Debt-laden Reliance Communications has sought shareholders’ approval to enhance the company’s borrowing limits to up to Rs 500 billion to meet its capital requirements.
The company said its annual general meeting is scheduled to be held on September 18, 2018, to consider various proposals, including revising borrowing limits, alterations to the Articles of Association of the company, and private placement of non-convertible debentures or other debt securities.
In 2014, a special resolution had been passed authorising the board to borrow up to four times the aggregate of the then paid-up capital and its free reserves, RCom said in a regulatory filing on Friday. The resolution enables the company’s board to borrow funds “which may at any time not exceed Rs 500 billion”.

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.

Rupee makes strong comeback, rises 20 paise to 69.91 versus dollar

The rupee on Friday staged a good recovery to end higher by 20 paise at 69.91 against the US currency on bouts of dollar selling by exporters and corporates.
The domestic currency recouped early losses and withstood the headwinds of surging crude prices and trade deficit worries.

Excess volatility and movements in the US dollar had a major impact on the domestic currency.
The domestic unit hit a low of 70.24 before rebounding in late afternoon deals.
India's trade deficit soared to a near five-year high of $18 billion, raising concerns on the current account front.
Also, global crude prices surged after a brief consolidation largely supported by signs that US sanctions on Iran, the third-biggest producer in the OPEC, are already reducing global crude supply.
The benchmark brent was up 60 cents a barrel at $75.33 in early Asian trade.
ALSO READ: Sudden depreciation of rupee not good as it adds volatility in market: SBI
The market participants are now focusing on the upcoming Jackson Hole Central Banking Symposium and also closely watching developments of the US-China trade war and its implications on global growth and influences on Fed monetary policy, a forex dealer commented.
The sharp fall in the rupee on Thursday was clearly unexpected, he added.
Meanwhile, the US dollar continued to enjoy the Fed's optimism from the FOMC meeting minutes expectation of monetary tightening even investors awaited further moves in global trade disputes despite growing US political uncertainty.
The Indian economy is expected to grow by around 7.5 per cent in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices, Moody's Investors Service said.
ALSO READ: Rupee@70: RBI may have shifted rupee intervention limit, say analysts
In its Global Macro Outlook for 2018-19, Moody's said the run-up in energy prices over the last few months will raise headline inflation temporarily but the growth story remains intact as it is supported by strong urban and rural demand and improved industrial activity.
In the meantime, Indian shares edged down, taking a pause after hitting record highs.
Extending its overnight bearish trend, the rupee opened lower at 70.20 at the inter-bank foreign exchange (forex) market on sustained demand for the American currency from importers and banks.
It drifted to a low of 70.24 and staggered without direction in line with most Asian peers.
But the downside pressure shifted quickly to the upside in mid-afternoon trade and moved into a bullish phase.
After scaling a session high of 69.89 towards the fag-end trade, it finally settled at 69.91, revealing a smart gain of 20 paise, or 0.29 per cent.
The local unit had lost 30 paise against the dollar.
For the week, the rupee recuperated by a whopping 24 paise after a two straight weeks of fall.
The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 70.1377 and for the euro at 81.1699.
ALSO READ: Rupee's weakness worrying you? Beat depreciation with international funds
The 10-year benchmark bond yield also softened to 7.87 per cent.
Against a basket of other currencies, the dollar index is down at 95.26.
In the cross currency trade, the rupee bounced back against the British pound to end at 89.86 per pound from 90.41 and also recovered against the euro to close at 80.98 compared to 81.21 on Thursday. It strengthened against the Japanese yen to finish at 62.78 per 100 yens from 63.29 earlier.
Elsewhere, the euro and pound sterling traded modestly higher against the US dollar ahead of US data releases and the speech by Chief J Powell at the Jackson Hole Symposium.
In forward market on Friday, premium for dollar showed a mixed trend owing to lack of market moving factors.
The benchmark six-month forward premium payable in December moved down to 104-106 paise from 105-107 paise, while the far-forward June 2019 contract was quoted unchanged at 253-255 paise.