Companies & Sectors
CCI rejects notice seeking nod for Aditya Birla-Pantaloon deal

CCI rejected the application seeking approval for the proposed takeover of Pantaloon by Aditya Birla Nuvo saying the final deal was yet to be approved by the boards of these companies

New Delhi: The Competition Commission of India (CCI) has rejected an application seeking its approval for takeover of Future group's Pantaloon brand business by Aditya Birla Nuvo, as the final deal was yet to be approved by the boards of the concerned companies, reports PTI.


Aditya Birla Nuvo Ltd, part of Kumar Mangalam Birla-led group, through a subsidiary has proposed to acquire a majority Pantaloon format business from Kishore Biyani-led Future group and the concerned parties had sought clearance from the Competition Commission for the deal on 16th July.


In its order dated 14 August 2012, which was posted on its website yesterday, CCI said that the application mentions about "the scheme including the proposal of demerger and merger" being yet to be approved by their boards of the concerned parties.


Both entities, according to the Commission, sought approval based on their Memorandum of Understanding (MoU) for the proposed deal.


As per the application, the companies in discussions are yet to finalise the exact scope of the assets to be acquired and the share entitlement ratio.


Further, the the terms of the proposed transaction are subject to the agreement by the companies in the scheme and other definitive documents that are to be executed, the order said.


"It is also observed from the terms and conditions in the MoU, that the said MoU is an interim arrangement since it will terminate immediately on execution of the implementation agreement or if the scheme does not get approval from the board of directors of the respective parties," it noted.


In late April, Future Group had said that Aditya Birla Nuvo would infuse Rs1,600 crore into its flagship 'Pantaloon' and would acquire a majority stake in the store chain, which would be later demerged to be listed as a separate entity.


As a part of the deal between the two companies, the Pantaloon format would be demerged from PRIL. .


The group's flagship firm, Pantaloon Retail India Ltd (PRIL) currently operates the 'Pantaloon' chain of fashion apparel and accessories stores.


As part of the proposed transaction, Aditya Birla Nuvo Ltd (ABNL) would subscribe to debentures amounting to Rs 800 crore issued by PRIL and on completion of the demerger process, the debentures would convert into equity in the demerged entity of the Pantaloon format.


Further, ABNL would take care of Rs800 crore debt of Pantaloon


In April, ABNL had said that it would also make an open offer of a minimum 26 per cent to the shareholders of the resulting entity.


The Commission said the notice, jointly submitted by the concerned companies, for the proposed deal was given pursuant to the MoU execution while awaiting the final decision from their respective boards.


"Considering the facts on record and the information provided in the notice jointly given by the parties (companies) for the proposed combination, the Commission hereby decides that the notice given by the parties is not a valid notice...," the order said.


The notice seeking approval for the deal was jointly moved by ABNL, Peter England Fashions and Retail Ltd (PEFRL), Indigold Trade and Services Ltd (ITSL), PRIL and Future Value Fashion Retail Ltd (FVFRL).


RBI tightens norms for securitisation of loans by NBFCs

The revised RBI guidelines also stipulate that NBFC cannot sell or securitize a loan unless three monthly instalments have been paid by the borrower

Mumbai: The Reserve Bank of India (RBI) has tightened the non-banking finance company (NBFC) securitisation norms by stipulating that an NBFC will have to retain at least 5% of the loan being sold to another entity, reports PTI.


The revised guidelines, issued by the RBI also stipulate that NBFC cannot sell or securitize a loan unless three monthly instalments have been paid by the borrower.


These stipulations, the central bank said are aimed at checking "unhealthy practices" and distributing risk to a wide spectrum of investors.


Giving details of the guidelines, the RBI said a loan up to two years can be securitised only after payment of three monthly instalments by the borrower. The limit for loans between two and five years is six monthly instalments and above five years, 12 monthly instalments.


With regard to minimum retention requirement (MRR) for securitisation, the guidelines said the NBFCs selling loans will have to retain 5% of the amount if the loan is for less than two year period and 10% if it is of over two years.


The originating NBFCs, it said should disclose to investors the weighted average holding period of the assets securitised and the level of their MRR in the securitisation.


They should also ensure that prospective investors have readily available access to all materially relevant data on the credit quality and performance of the individual underlying exposures, cash flows and collateral supporting a securitisation exposure, RBI said.


As per the guidelines, NBFCs should formulate policies regarding the process of due diligence to be exercised by their own officers to satisfy about the Know Your Customer requirements and credit quality of the underlying assets.


RBI also said that NBFCs will not be permitted to carry out re-securitisation of assets and synthetic securitisation, which refers to bundling of assets with different risk profile.


These guidelines have to implemented by NBFCs in two phases by October end.


Earlier, the RBI had issued similar guidelines with regards to securitisation of loans by banks.


FIS to deploy, manage 5,500 ATMs of PSU banks

Under the multi-year agreement, FIS will provide end-to -end outsourcing services including supply, setup and ongoing ATM operation for over 5,500 ATMs of PSU banks across India

New Delhi: Banking and payments technology provider FIS announced deploying and managing over 5,500 ATMs as part of a pan-India ATM rollout to be undertaken by a consortium of state-owned (PSU) banks over the next two years, reports PTI.


Under the multi-year agreement, FIS will provide end-to -end outsourcing services including supply, setup and ongoing ATM operation, the Jacksonville (Florida)-based company said in a statement.


"Currently driving more than 3,500 ATMs across India and operating two of India's four interbank ATM switching networks, the new deployment will significantly expand FIS' business in the country, which is a key market in FIS' international growth strategy," it added.


Mark Davey, Executive Vice President of FIS International Solutions Group said that through this initiative, the company will more than double the number of ATMs it supports in India.


Finance Minister P Chidambaram last week said that public sector banks have been asked to double the number of their ATMs, currently number around 63,000, in the next two years.


The banks have also been asked to upgrade the ATMs to accept deposits as well.


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