Companies & Sectors
KFA, lenders meet inconclusive; banks want fresh fund infusion

The airline owes close to Rs1,800 crore in salary dues, tax arrears and vendor/lessor fees and airport charges. It is also saddled with over Rs7,500 crore in bank debt and over Rs8,000 crore in accumulated losses

Mumbai: A meeting between the core lenders group and the grounded Kingfisher Airlines (KFA), which is trying to resume operations by next month, ended inconclusively here Friday evening, as the airline failed to table a concrete revival plan, reports PTI.

 

The lenders group, led by State Bank of India, has PNB, BoB, Bank of India and IDBI Bank as other members. Kingfisher owes over Rs7,500 crore and one-year's accrued interest to 17 banks.

 

While the airline was represented at the meeting by UB Group president and chief financial officer Ravi Nedungadi, and airline chief executive Sanjay Agarwal, the bankers were represented by mid-level officials.

 

One of the bank officials present said later that bankers insisted that KFA must clear at least a part of the vendor and salary dues without which no revival plan could be worked out.

 

But he did not quantify the amount the bankers have sought.

 

The airline owes close to Rs1,800 crore in salary dues, tax arrears and vendor/lessor fees and airport charges. The airline, which never reported a profit since inception in May 2005, is also saddled with over Rs7,500 crore in bank debt and over Rs8,000 crore in accumulated losses.

 

The banker, who did not wish to be named, also said that all the 17 lenders will meet again towards the end of the month to take a stock of the revival plan.

 

The lenders also categorically ruled out any fresh loans or restructuring without fresh capital infusion by KFA.

 

At the last meeting on 17th December, the airline had told the lenders that promoters would bring in Rs425 crore as a part of revival plan.

 

Kingfisher is grounded since 1st October, following a staff strike over salaries and suspension of flying license.

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RIL Q3 net soars 24% on record refining earnings

RIL, which operates the world's biggest refining complex at Jamnagar in Gujarat, earned $9.6 on turning every barrel of crude oil into fuel in the quarter, compared to $6.8 per barrel gross refining margin in the same period a year ago

New Delhi: Reliance Industries (RIL), India's most-valuable company, today reported 24% jump in the third quarter net profit, the first increase after four quarters of declining returns, on the back of record earnings from oil refining business, reports PTI.

 

Net profit in October-December at Rs5,502 crore was 23.9% higher over Rs4,440 crore in the same period a year ago, RIL said in a statement.

 

The better-than-estimated quarterly profit came on the back of rise in earnings from turning crude oil into petrol, diesel and other petroleum products.

 

RIL, which had previously sought to widen beyond its core energy business through forays into consumer-focused sectors such as telecom, retail and financial services, seems to be shifting focus back to where it started its energy business—oil refining.

The shift in focus is after output from its flagship natural gas field in the Krishna Godavari basin continues to wane and government approvals for developing newer and smaller fields are slow to come.

 

RIL, which operates the world's biggest refining complex at Jamnagar in Gujarat, earned $9.6 on turning every barrel of crude oil into fuel in the quarter, compared to $6.8 per barrel gross refining margin in the same period a year ago.

 

Sales were up over 10% to Rs96,307 crore.

 

Debt soared to Rs72,266 crore at the end of Q3, up from Rs68,259 crore at the beginning of the fiscal. At quarter end, it had a cash pile of Rs80,962 crore, making the company debt free on a net basis.

 

“RIL’s performance has improved in this quarter with margin expansion in petrochemicals and record earnings in the refining business,” company chairman and managing director Mukesh D Ambani said.

 

Before the announcement of the earnings, RIL shares rose to a 15-month high to close at Rs898.95 on BSE today. This is the highest close for RIL shares since 28 October 2011.

 

RIL shares have increased 7.2% this year, adding to last year’s 21% surge, the most since 2009.

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SEBI tweaks OFS norms; abolishes 25% margin requirement

SEBI in its board meeting today decided to abolish the 25% margin money requirement for entities bidding through the auction route. It has also said that indicative prices during Offer for Sale (OFS) or auction route, should be disclosed throughout the trading session

Chennai: To make it easier for companies to comply with public shareholding norms, the Securities and Exchange Board of India (SEBI) today decided to abolish the 25% margin money requirement for entities bidding through the auction route, reports PTI.

 

The market regulator has also said that indicative prices during Offer for Sale (OFS) or auction route, should be disclosed throughout the trading session.

 

SEBI said these decisions would make the OFS mechanism “more economical, efficient and transparent”.

 

“We have provided now that in today's meeting that earlier requirement of 25% margin will be removed. It won’t be a requirement mandatorily,” SEBI chairman UK Sinha said here.

 

Speaking to reporters after SEBI board meeting, he said that people or institutions can come without any upfront margin but they have to follow certain conditions.

 

“One is they cannot revise it downwards and they cannot withdraw this bid. In all these cases, the rules of secondary market will be followed,” Sinha said.

 

OFS route is being introduced because many participants have expressed their difficulty in following 25% minimum margin requirement at the bidder stage, he added.

 

SEBI said that institutions may place orders/bids with 100% upfront margin and modification/cancellation of such orders/bids shall be permitted.

 

“Custodian confirmation shall be within the trading hours. However, the settlement of funds and securities shall take place on T+1 (next day after transaction) day,” it added.

 

Further, institutions can place orders without upfront margin in line with secondary market practice. “However such bids/orders cannot be modified /cancelled, except upward revision in the price or quantity,” SEBI said.

 

“Indicative price shall be disclosed to market throughout the trading session. The indicative price shall be calculated based on all bids/orders,” SEBI said.

 

SEBI noted that OFS mechanism has been found to be useful by market participants and popular for offloading shares of promoters in listed companies to achieve minimum public shareholding.

 

Regarding OFS, the regulator said that cumulative bid quantity of 100% margined orders as well as non-margined but non-cancellable orders would be made available to the market throughout the trading session.

 

The order book shall display two sets of orders—cumulative orders/bids with 100% margin and cumulative orders/bids without margin.

 

“Indicative price shall be disclosed to market throughout the trading session. The indicative price shall be calculated based on all bids/orders,” SEBI said.

 

Earlier, the finance ministry had written to SEBI to do away with the 25% margin money requirement for institutions bidding during the PSU stake sale through auction route.

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