AP cabinet approves special ordinance to rein in MFIs

Hyderabad: Seeking to rein in microfinance institutions (MFIs), whose coercive functioning led to alleged suicides of a number of poor and rural people, the Andhra Pradesh government today approved a special ordinance for the purpose and sent it for the governor's assent, reports PTI.

The state cabinet met here specially to approve the ordinance in view of the massive pubic outcry over the harassment of the poor by the MFIs.

State rural development minister V Vasanth Kumar, talking to reporters after the cabinet meeting, declined to divulge the contents of the ordinance.

"I cannot reveal the contents of the ordinance before the governor gives his assent. Wait for 24-48 hours," he said.

Chief minister K Rosaiah held a video conference with the district collectors and superintendents of police (SPs) prior to the cabinet meeting and directed them to act tough on erring MFIs to prevent any harassment of those who have taken loan from them.

Mr Rosaiah, who held meeting with state level bankers yesterday to discuss ways to help the poor loanees, told them to disburse loans expeditiously as per their targets.

During the video conference, he told officials to hold district level bankers meetings to see that loans are given at reasonable rate of interest to the needy.

Many rural borrowers allegedly committed suicide in Andhra Pradesh during the last few months following their inability to pay back loans.

Mr Vasanth Kumar said the victims of MFIs would be provided a Total Financial Inclusion (TFI) package under which a debt swapping module would be worked out. The debt swapping meant conversion of higher rate of interest on loans to a lower rate.

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SpiceJet's new promoters to launch open offer on 18th October

New Delhi: SpiceJet's new promoters SunTV chief Kalanithi Maran and his company KAL Airways will launch an open offer to acquire an additional 20% stake in the low-cost carrier on 18th October, reports PTI quoting Enam Securities, the manager of the offer.

"The open offer will open on 18th October and will close on 6 November 2010, as per the revised schedule," Enam Securities, which is managing the offer on behalf of Maran and KAL Airways, said in a filing to the Bombay Stock Exchange (BSE).

In June, the Chennai-based industrialist had clinched a deal to acquire a 37.7% stake in the low-cost carrier for Rs739.57 crore from American investor Wilbur Ross, his investment companies and the Kansagara family-promoted Royal Holding Services Ltd.

Shareholders will be offered Rs57.76 for every share they hold in SpiceJet, translating into a 3% premium over the closing price of Rs56.05 on 11 June 2010.

This would involve an outgo of around Rs480 crore, taking the overall deal size to Rs1,220 crore as Maran and his firm KAL Airways had clinched the deal to pick up a 37.73% stake in SpiceJet at Rs47.25 apiece.

As per market regulator Securities and Exchange Board of India’s (SEBI) takeover norms, the new promoters of a company are required to make an open offer in case their stake crosses the threshold limit of 15%.

Enam's filing further said the Letter Offer to the equity shareholders of SpiceJet is in continuation and should be read in conjunction with the public announcement of 14 June 2010, pursuant to SEBI regulations.

It had said on 14th June that it will acquire as many as 8.30 crore shares of Rs10 face value at a price of Rs57.76 per fully paid-up equity share through the open offer, representing 20% of the equity in the company.

On Monday, Mr Maran had increased his direct stake in the airline to 25.12% by acquiring a 7.42% additional stake through off-market transactions for Rs135 crore.

The new promoters have also appointed Neil Mills, the former chief financial officer of Dubai-government controlled FlyDubai as the new chief executive officer of SpiceJet as part of its management revamp.

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Rlys to provide additional coal to NTPC’s 2 plants

New Delhi: Indian Railways has assured state-owned NTPC of supplying it with additional coal for improving power generation at its stations in Farakka in West Bengal and Kahalgaon in Bihar, reports PTI.

The additional supply will help improve the generation level at both the stations to about 500 MW. They have been producing power at lower capacity due to coal shortage.

Sources said that at a meeting of senior officials of the two sides, Indian Railways has assured NTPC of additional movement of coal to the plants.

The railways will make arrangements for moving two more coal rakes a day to the stations, they added. A rake of coal roughly equals to 4,800 tonnes.

The Farakka and Kahalgaon stations have total installed capacity of 1,600 MW and 2,340 MW, respectively.

These two power projects faced critical coal shortage in the past due to transportation hurdles from the Rajmahal mines allotted for these plants, thereby leading to low electricity generation.

Last year, the government gave approval for implementing the Rajmahal Opencast Expansion Project, from 10.5 million to 17 million tonnes per annum with an estimated capital investment of Rs153.82 crore.

NTPC, on its part, has taken several initiatives to ensure increased availability of coal by buying it from different mines of Coal India, beside e-auctions and imports.

The installed capacity of NTPC is over 32,194 MW. It operates over 27 power stations across the country.

Currently, over 17,000 MW capacity is under construction at 17 projects in 12 states and NTPC plans to become a 75 GW company by 2017.

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