Telenor to write-down $682 million India exposure

“As a precautionary measure, Telenor ASA has decided to write down the remaining fixed and intangible assets in India amounting to NOK 3.9 billion (NOK 2.6 billion after non-controlling interests),” Telenor informed the Oslo Stock Exchange

Oslo: Norwegian telecom company Telenor on Monday said it will write down $682 million (Norwegian Krone—NOK 3.9 billion) to remove accounting exposure to India due to uncertain business environment in the sector, reports PTI.

The company said its decision follows spectrum auction recommendations by sectoral regulator TRAI after the Supreme Court had cancelled 122 telecom licences, including 22 of the Norwegian firm, in the 2G spectrum case.

“As a precautionary measure, Telenor ASA has decided to write down the remaining fixed and intangible assets in India amounting to NOK 3.9 billion (NOK 2.6 billion after non-controlling interests),” Telenor informed Oslo Stock Exchange.

The write down will be included in Telenor’s results for the first quarter 2012, to be presented on 8 May 2012, the statement said.

“After the write down, Telenor has no further accounting exposure related to India as of 31 March 2012.” it added.

Telenor holds around 67% stake in joint venture Uninor, and rest of it is owned by realty firm Unitech.

The Supreme Court has asked the government to conduct fresh auction for the spectrum by 31 August 2012 and licences of the company will remain valid till 7 September 2012.

Telenor said Uninor’s operational performance in India during the first quarter 2012 has developed according to plan.

“Following the Supreme Court’s ruling in February to cancel Uninor’s licences and the recent recommendation from the Telecom Regulatory Authority of India (TRAI) regarding the 2G licence re-auction, the uncertainty has increased significantly,” Telenor statement to OSE said.

It further said, “If the recommendation from TRAI in its current form should be approved by the Department of Telecommunications (DoT), it will be almost impossible to participate in the auction for Telenor.”

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Government allows further export of cotton

“A decision has been taken to remove suspension of cotton exports registration. Registration of cotton exports will be allowed by the government,” commerce and textiles minister Anand Sharma told reporters

New Delhi: The government on decided to allow further cotton exports in 2011-12 marketing year ending September as production estimates have been revised upwards, reports PTI.

“A decision has been taken to remove suspension of cotton exports registration. Registration of cotton exports will be allowed by the government,” commerce and textiles minister Anand Sharma told reporters after meeting agriculture minister Sharad Pawar.

Last month, the government had lifted the ban on exports but decided not to issue fresh registration of certificates (RCs). It only allowed shipments for which RCs were already issued before the ban was imposed on 5 March 2012.

Congress MPs from Gujarat led by Ahmed Patel, political secretary to UPA chairperson Sonia Gandhi, and state pradesh congress chief Arjun Modhwadia recently met prime minister Manmohan Singh, finance minister Pranab Mukherjee and Sharma and sought the removal of restrictions on cotton exports.

The decision also comes against the backdrop of Mr Pawar writing to the prime minister objecting to the government's export policies towards certain farm items like cotton, sugar and milk.

Mr Sharma said there would not be any quantitative restrictions on registration for exports, but the group of ministers (GoM) would review the situation in two-three weeks.

“We have accepted agriculture ministry’s data on cotton production. Based on revised estimates of the Cotton Advisory Board (CAB) as well as the agriculture ministry, we have decided to remove suspension on registration of cotton exports,” he added.

Earlier this month, the Cotton Advisory Board had revised production estimates upwards to 347 lakh bales from 345 lakh bales for the current season. It has also revised domestic consumption estimates downwards to about 250 lakh bales from 260 lakh bales earlier.

The agriculture ministry has revised upwards cotton output to 352 lakh bales from 340.8 lakh bales.

Before the ban was imposed, the government had issued RCs for about 130 lakh bales.

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RBI moots higher FDI cap in insurance sector

“There may be a need to relook at the sectoral caps (especially in insurance) and restrictions on FDI flows (especially in multi-brand retail),” RBI said in a study

New Delhi:  The Reserve Bank of India (RBI) has said there is a case for hiking foreign direct investment (FDI) cap in insurance and some other sectors in view of India's growing integration with the global economy, if local economic and political scenario permits, reports PTI.

“... as the economy integrates further with the global economy and domestic economic and political conditions permit, there may be a need to relook at the sectoral caps (especially in insurance) and restrictions on FDI flows (especially in multi-brand retail),” RBI has said in a study, released earlier this month, on FDI flows to India.

The study said there are certain sectors, including agriculture, where FDI is not allowed, while sectoral caps in some sectors such as insurance and media are relatively low compared to the global patterns.

“In this context, it may be noted that the caps and restrictions are based on domestic considerations and there is no uniform standards that fits all countries,” it added.

RBI said the demands for raising the present FDI limits of 26% in the insurance sector may be reviewed taking into account the changing demographic patterns as well as the role of insurance companies in supplying the required long term finance in the economy.

Commenting on the need for a higher FDI limit in the insurance sector, Monish Shah, senior director of consultancy giant Deloitte in India, told PTI that insurance is a high gestation, capital intensive business and the sector needs fresh capital to fund its existing businesses and expansion.

“Increased capital will benefit the industry as a whole by increasing the insurance access and penetration in the country. Increase in FDI in insurance from a strategic minority to a dominant minority is one of the reforms which are being eagerly awaited by several industry players; as despite the slowdown, Indian insurance sector remains attractive in the long term,” he added.

Noting that life insurance industry is long-term in nature and requires years of capital infusion, MetLife India’s managing director and country manager Rajesh Relan said: “Capital infusion through FDI will help grow the industry by increasing customer coverage with a range of innovate products that are clearly focused on today’s uninsured.”

He further said that growth of insurance sector would also help in developing other sectors and providing capital to the government for long-term infrastructure projects.

 The RBI study found that sectoral cap was higher than India even in China for insurance and a few other sectors, while countries like Brazil and Russia have higher sectoral caps than India across most of the sectors.

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