The MNS leader blamed outsiders for the 11th August violence saying Maharashtrians were not responsible for it. Raj Thackeray also demanded immediate ouster of the state home minister RR Patil and Mumbai police chief Arup Patnaik
Reliance ADAG Company Reliance MediaWorks is reportedly in talks to sell off Big Cinemas to arch rival Inox in order to pare off its ballooning debt but talks are stymied on the price front
Reliance MediaWorks, part of the Anil Dhirubhai Ambani Group (ADAG) of companies, has plans to sell off its Big Cinemas franchise to its arch rivals Inox Leisure (Inox), in order to pare down its massive debt. According to those close to the deal, Anil Ambani expects to get around Rs150 crore from the deal while Inox is willing to pay less Rs100 crore. Clearly, Big Cinemas has virtually thrown down the towel and given up its fight to be the supreme leader of the box office, so to speak. Its financials have been bludgeoned by debt, which has seen its net worth eroded completely. The company had taken massive amounts of debt to ward away competition, especially from its arch-rival Inox, and acquire various properties, including splurging on the landmark joint venture with Steven Spielberg’s DreamWorks. Such ambitious plans saw the company’s current liabilities swell up to Rs2,317.31 crore as of 31 March 2012 as against its capital of Rs23.06 crore.
Reliance and Inox are bitter competitors and vying for the same space—the number one position. Their tussle for Fame India is well known. We had written a fair bit about the tussle between Inox and Reliance for Fame India (http://www.moneylife.in/article/fccbs-may-hold-the-key-in-battle-for-fame-india/4557.html) a while back. As of March 2012, INOX held 73.14% stake in Fame India, while Anil Ambani-promoted Reliance Capital owned 22.38%.
Its failure to acquire Fame meant a setback in Ambani’s plans for marrying Hollywood and Bollywood (vis-a-vis its joint venture with DreamWorks) and a whole lot of other expansions, which saw Reliance MediaWorks incur net losses of Rs327.96 crore and Rs128.03 crore in fiscal 2011 and fiscal 2010, respectively. Furthermore, for the 12 months ended 31 March 2012, its net losses swelled to Rs572.16 crore and its net worth stood at a negative Rs239.58 crore as at 31 March 2012. What is pertinent is that the company’s auditors have questioned whether the company is ever able to continue as a going concern basis. In a review released this past February, it said that the erosion of net worth casts a doubt about the company’s ability to continue as a going concern. The losses continued nevertheless, and it reported losses in the latest quarter as well. Its latest quarterly result ending 30 June 2012 is no exception either; it reported 9.29% higher consolidated net loss of Rs131.3 crore. The only way to stop this is to ask for more money, from the public or by selling off swathes of its properties.
Reliance MediaWorks had recently signed an indicative non-binding term sheet with a private equity fund to acquire a substantial minority stake in Reliance MediaWorks’ Film and Media Services division for an investment of Rs605 crore. It is not known which private equity fund is involved in this deal, which looks highly suspicious. Reliance MediaWorks had 262 screens in India and an additional 230 screens in Nepal, Malaysia and the United States as of 30 June 2012.
MFIN will soon approach the RBI with the request to fix margin cap at 12% as it feels the new cap of 10-12% would be challenging for the microfinance sector to operate
Hyderabad: Microfinance Institutions Network (MFIN), a self regulatory body of MFIs, had decided to ask the Reserve Bank of India (RBI) to fix the margin cap for individual loan to borrowers at 12%, instead of 10 to 12% it fixed in the earlier circular, reports PTI.
MFIN CEO Alok Prasad said they will soon be approaching the RBI with the request as the new cap will be challenging for the microfinance sector to operate.
Earlier, the interest rate cap on individual loans given by MFIs was fixed at 26% and the margin at 12%. So, the average interest rate on the loans is still limited to the sum of average borrowing costs plus margin or 26%, whichever is lower.
In a circular issued by the RBI on 3rd August, the caps on margin have been revised to 10% for large MFIs (loans portfolios exceeding Rs100 crores) and 12% for less than Rs100 crore.
The average interest paid on borrowings and charged by the MFI are to be calculated on average monthly balances of outstanding borrowings and loan portfolio respectively, the RBI said in the circular.
"What the industry is saying is that the earlier position of 12% which was there before 3rd August circular should be restored. The industry is asking to maintain the status quo ante," Prasad told reporters.
"The RBI is extremely sensitive to the fact of what is the end client pricing of loan. And the earlier 24 to 26% was very comfortable," he added.
Replying to a query, he said post AP MFI Act, the Indian microfinance industry size shrunk to Rs16,000 crore from Rs26,000 crore in 2010.
"Outside Andhra, with cautious and optimism I would say the industry would grow at 25 to 30% in the current financial year," he said.
The situation is improving outside Andhra Pradesh and banks and equity participants are showing interest in the industry and funding has selectively started, he said.
On situation in the state, Prasad said the logjam will only be cleared though dialogue which is yet to take place.
After witnessing a spate of suicides of borrowers allegedly due to coercive recovery practices by the MFI agents, the AP government had come out with AP Microfinance Ordinance in October, 2010 and subsequently made that into an Act. The Act crippled the activities of all MFIs leaving around Rs7,000 bad debts in the market.