Companies & Sectors
Etihad ready to cut number of its directors to two on Jet Airways board
As per the modified agreement, major decisions, including appointment of independent directors, chairman and vice-chairman will now be taken on the basis of majority of votes by the board of Jet Airways
Abu Dhabi-based Etihad Airlines has reportedly agreed to reduce the number of its directors on the Board of Jet Airways (India) Ltd to two from four under the Rs2,058-crore deal. This would give the Indian promoters ‘effective control’ of the carrier.
As per the revised shareholding agreement, Etihad would have two directors on the board of Jet post the deal, as against the earlier proposal of four directors in the 10-member board.
This seeks to address the concerns of Foreign Investment Promotion Board (FIPB) and market regulator Securities and Exchange Board of India (SEBI) with regard to effective control after the foreign direct investment (FDI), which is the largest so far in the Indian aviation space.
This, along with other details of an amended shareholding agreement, has been forwarded to Finance Ministry ahead of the FIPB meeting on 29th July to consider the proposal.
The new agreement says that major decisions, including appointment of independent directors and the chairman and vice-chairman will now be taken on the basis of majority of votes.
However, there will be no change in the shareholding pattern with Etihad picking up 24%, key promoter Naresh Goyal holding 51% and the remaining 25% with others, including institutions and individuals.
Besides Finance Ministry, the Department of Industrial Policy and Promotion (DIPP) would be scrutinising the revised proposal over the weekend so that a firm view could be taken at the meeting on Monday.
On Friday, Jet Airways closed 17.4% up at Rs395.5 on the BSE, while the 30-share Sensex ended marginally down at 19,748.
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Dish TV Q1 net loss narrows to Rs30.4 crore on better ARPU

Dish TV is still in the red due to intensive competition, weak rupee and higher ad spend. However, its average revenue per user –ARPU has seen improvement

Dish TV’s net loss, for the first quarter of the 2013-14 fiscal, was narrowed down to Rs30.4 crore compared to Rs32.3 crore in the corresponding quarter last fiscal. According to the filing on Bombay Stock Exchange (BSE), the direct-broadcast satellite service provider’s reported net worth as at 30 June 2013 is eroded by its accumulated losses. Intensive competition, weak rupee and increased advertisement spend were culprits.


Subhash Chandra, chairman, Zee group (promoter of Dish TV) said, “Too much focus on box seeding has diluted the addressability part of the digitization mandate. In such a scenario, Dish TV’s focus on quality additions is a counter-intuitive move, which has started delivering encouraging results. The first quarter saw the company deliver strong free cash flows while maintaining healthy customer retention and investing in brand equity,”


The company's first quarter operating revenues stood at Rs578.4 crore, recording 11.2% growth over the corresponding period last fiscal, helped by lower subscription acquisition cost and higher average revenue per user.


During the quarter, Dish TV’s average revenues per user (ARPU) increased 5.1% to Rs165, and subscriber acquisition cost (SAC) is pegged at Rs1,828 for the June 2013 quarter, when compared to Rs1,996 in the immediately preceding quarter. It added 0.2 million subscribers in the June quarter.


With a sustained focus on strengthening the balance sheet, Dish TV looks forward to retiring a significant portion of its outstanding debt of Rs750 crore through the current fiscal.


Commenting on the persistent weakness in the rupee and its impact on the financials, Jawahar Goel, managing director of Dish TV said, “A flagging rupee has been an industry wide concern since some time now. To contain further widening of gap between the cost of the consumer premises equipment (CPE) and amount realized from the customer due to rupee depreciation, Dish TV initiated an acquisition price hike of Rs250 on 4th July. Sensing the need, other players in the DTH industry followed suit within the next few days.”


Dish TV added 5 new HD channels with effect from April, 2013. With this addition, Dish TV offers the highest number of 25 HD channels and 17 HD services on its platform.


On Friday, Dish TV shares tumbled 8.2% to Rs52.35 on the BSE, while the benchmark Sensex finished marginally down at 19,748.


GAIL India Q1 net profit falls 28.7% on higher costs, tax

Higher spot LNG volume, increase in production and sale of petrochemicals help GAIL India achieve higher revenues. However, profit suffered due to higher raw material prices, depreciation and salaries

GAIL (India) Ltd reported a 28.7% lower first quarter net profit to Rs808 crore as against Rs1,134 crore mainly due to higher higher-than-expected subsidy burden as well as raw material prices which rose 76.2% while depreciation also came in higher by 33%.

During the quarter to end-June GAIL’s depreciation expenses increased 29.4% to Rs281 crore, whereas the tax rate stood at 34% compared with 32.7%, same period last year. Consequently, its net profit decreased by 28.7% to Rs808 crore.


The company registered an increase of 16% in turnover (net of excise) to Rs12,856 crore as against Rs11,089 crore same quarter of the previous year. The increase in revenues was mainly due to higher sale of spot LNG volume, increase in production and sale of petrochemicals.

During the quarter, revenues from natural gas trading increased 20% to Rs11,059 crore as against Rs9,242 crore, while its revenues from natural gas transmission increased by 9% to Rs999 crore from Rs915 crore, a year ago period.

GAIL’s revenues from petrochemicals business increased 92% to Rs1,103 crore as against Rs574 crore in the corresponding quarter of the previous year.

The net revenue from LPG and other liquid hydrocarbons business during the first quarter of the current financial year stood at Rs1,004 crore as against Rs1,072 crore in the corresponding quarter of previous year while the revenue from LPG transmission business was Rs94 crore as against Rs114 crore in the corresponding period.

On Friday, GAIL India closed 2.9% down at Rs318.95 BSE, while the 30-share Sensex ended marginally down at 19,748.


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