Chinese Huawei sells Honor smartphone business to 'ensure its own survival'
Struggling to keep its consumer business afloat in the wake of the US sanctions, Chinese conglomerate Huawei on Tuesday announced to sell off its Honor smartphone business assets to China-based Shenzhen Zhixin New Information Technology Co Ltd.
 
The company said that the sale -- which could be around $15 billion according to multiple reports -- will help Honor's channel sellers and suppliers make it through this difficult time.
 
Honor smartphones have been hit by US sanctions that prevent Huawei from doing business with the US companies.
 
"Once the sale is complete, Huawei will not hold any shares or be involved in any business management or decision-making activities in the new Honor company," the company said in a statement.
 
"Huawei's consumer business has been under tremendous pressure as of late. This has been due to a persistent unavailability of technical elements needed for our mobile phone business," it added.
 
Huawei said the move has been made by Honor's industry chain to "ensure its own survival".
 
Over 30 agents and dealers of the Honor brand first proposed this acquisition.
 
Since its creation in 2013, the Honor brand has focused on the youth market by offering phones in the low- to mid-end price range.
 
"During these past seven years, Honor has developed into a smartphone brand that ships over 70 million units annually," Huawei said.
 
In India, Honor recently entered the laptop market and also expanded its wearables portfolio in the country.
 
According to the Charles Peng, President, Honor India, the company's entry into the India laptop market in August this year has also turned out to be a success.
 
Launched at Rs 42,990, the company's introductory laptop, Honor MagicBook 15, comes with 8GB RAM, 256GB SSD, a hidden pop-up webcam, 2-in-1 fingerprint power button and a compact 65W fast charger.
 
"It was sold out within seconds as soon as it went online. Further, we have received encouraging and positive feedback from our consumers who wish to own a PC that fulfills their requirements as well as suits their personality with a premium product at a competitive price," Peng told IANS last month.
 
"On future prospects, we are confident about our performance in India. We aim to create an intelligent new world for individuals by developing a smart living ecosystem having a diverse product portfolio including smart band, smartwatch, smart audio, laptops, and smartphones," he said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    s5rwav

    2 weeks ago

    On Cyber Security Concern, USA Rightly Banned Huawei Products and it is High Time India also Ban its Prodcts. I am Babubhai Vaghela from Ahmedabad. Thanks.

    BPCL Stake Sale: Several EoIs Received, Giants RIL, Aramco, BP Not in Race
    The much-anticipated privatisation process of the Bharat Petroleum Corporation Ltd (BPCL) completed its first phase on Monday with several suitors submitting 'Expressions of Interest' (EoIs). However, sources said that major energy giants including Reliance Industries Ltd (RIL), Saudi Aramco and UK's BP have not placed bids for the State-run oil major.
     
    The transaction will move to the second stage after scrutiny by the transaction adviser, said a tweet from the Twitter handle of the secretary of the department of investment and public asset management (DIPAM).
     
    "For strategic disinvestment of BPCL, multiple expressions of interest have been received by the Transaction Advisor. The Transaction will move to the second stage after scrutiny by TA," it said.
     
    Finance Minister (FM) Nirmala Sitharaman also said that the BPCL disinvestment process is making progress.
     
    "Strategic disinvestment of BPCL progresses: Now moves to the second stage after multiple expressions of interest have been received," she said in a tweet.
     
    Sources said that three-four bids have come in for the oil giant.
     
    The deadline for submitting the EoIs for privatisation of BPCL closed on Monday and there has so far been a buzz of mixed interest amongst the bidders.
     
    Other global giants such as Total and Russia's Rosneft also have not pitched in the strategic sale of BPCL.
     
    RIL and Abu Dhabi National Oil Company (ADNOC) were expected to submit their bids. While RIL has not put in a bid as per sources, it could not be ascertained whether ADNOC has gone ahead with a bid.
     
    ADNOC already has footprint in India as it is the only overseas company that has crude stored in Indian caverns.
     
    The lack of interest among major players comes on the back of the poor oil demand globally amid the pandemic and low oil prices.
     
    The EoIs came on Monday after four extensions of the deadline for submission of bids.
     
    The Centre has put its entre 52.98% stake in the BPCL on the block.
     
    It proposes to disinvest its entire shareholding in the BPCL comprising 1,14,91,83,592 equity shares held through the ministry of petroleum and natural gas, which constitutes 52.98% of BPCL's equity share capital, along with the transfer of management control to the strategic buyer (except BPCL's equity shareholding of 61.65% in Numaligarh Refinery Limited - NRL - and management control thereon).
     
    The shareholding of the BPCL in the NRL will be transferred to a Central public sector enterprise operating in the oil & gas sector under the ministry and, accordingly, is not a part of the proposed transaction.
     
    The government's stake in BPCL is worth around Rs47,000 crore at BPCL's current share price.
     
    According to an earlier research note by Emkay Global, according to DIPAM's response to PIM queries, interested parties may include global players with limited knowledge on Indian corporate/PSU (public sector undertaking)/accounting/takeover rules as well as parties seeking higher level of clarifications.
     
    "The progress on BPCL's sale is positive for OMCs in terms of deepening deregulation and profitability outlook. Given the tight fiscal situation, disinvestment would be of utmost importance to the government this year," the report said.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    User 

    COMMENTS

    s5rwav

    2 weeks ago

    #ROCMumbai: Was #BPCLAGM2020 Really Conducted? If Conducted, Where is the Documentary Evidence of it? How Many Investors of BPCL Asked Questions? Who were the Investors who Asked Questions? Were the Questions Asked by the Investors Replied? Where are the Replies? I am Babubhai Vaghela from Ahmedabad on Whatsapp Number 9409475783. Thanks.

    Muztir6

    2 weeks ago

    Wish your company may flourish day and night than before,yes I too am interested to bye a smart phone of your company,and will purchase one at appropriate time,wish you good luck and success always.

    Auditor of McLeod Russel Flags Material Uncertainty as a Going Concern
    The auditors of McLeod Russel, Lodha & Co, have given qualifications and adverse conclusions on the financial statements for the half-year ended September 2020.
     
    "Attention is drawn to the following Notes of the Statement which are subject matter of adverse conclusion as given in Para 5," the auditors said in their review of the financial results.
     
    The auditors have pointed out that the statements have not been prepared fairly in all material respect in accordance with the Indian Accounting Standards.
     
    "Based on our review conducted as above, we report that because of the significance of the matters stated in Para 4 above, especially those relating to non-provision of amount given as Inter-Corporate Deposits which as stated in Para 4(a) have been considered doubtful of recovery, together with the consequential impact of these matters on the unaudited financial results for the period which are expected to be material, we have come to the conclusion that the Statement read with notes thereon have not been prepared fairly in all material respect in accordance with aforesaid Indian Accounting Standards and other recognised accounting practices and policies generally accepted in India and has not disclosed fairly the information required to be disclosed in terms of the Listing Regulations, 2015, including the manner in which it is to be disclosed," the auditors said.
     
    The auditors have cited inter-corporate deposits of Rs2,855 crore, which are doubtful of recovery and prejudicial to the interest of the company.
     
    "Note No. 5 dealing with Inter Corporate Deposits (ICD) aggregating to Rs2,85,515 lakhs as on 30 September 2020 (including Interest of Rs1,969 lakhs accrued till 31 March 2019) given to certain companies which are doubtful of recovery and considering recoverability etc. are prejudicial to the interest of the company. In absence of provision there against, the profit for the period is overstated to that extent. Impact in this respect have not been ascertained by the management and recognised in the statement," the auditors said.
     
    The company had given advance to a corporate body aggregating to Rs1,400 lakh which were outstanding as on 30 September 2020. "In the absence of appropriate audit evidence and status thereof, we are unable to comment on the validity and recoverability of such advances," the auditors said in the notes to accounts.
     
    "Note No. 8(b) regarding non-recognition of interest of Rs3,376 1akh on inter-corporate deposits taken by the company and thereby the profit for the period is overstated to that extent," said the auditors.
     
    "Further, as stated in Note No. 8(a), penal/compound interest and other adjustments in respect of borrowings from banks/financial institution have not been recognised and amount payable to banks and financial institutions as recognised in this respect are subject to confirmation from respective parties and consequential reconciliation. Pending final determination of amount in this respect, adjustments and impacts arising therefrom have not been ascertained and as such cannot be commented upon by us," they added.
     
    Note No. 9 relates to non-reconciliation of certain debit and credit balances with individual details and confirmation etc.
     
    Adjustments/impact in this respect are currently not ascertainable and as such cannot be commented upon by us, the auditors said.
     
    As stated in Note No. 7, the predecessor auditor in respect of loans included under paragraph (a) above have reported that it includes amounts given to group companies whereby applicability of Section 185 could not be ascertained and commented upon by them.
     
    "Further, certain ICDs as reported were in nature of book entries and/or are prejudicial to the interest of the company. These amounts are outstanding as on this date and status thereof have remained unchanged and uncertainty and related concerns including being prejudicial to the interest of the company are valid for current period also. The matter as reported is under examination and pending before regulatory authorities. Pending final outcome of the matter under examination we are unable to ascertain the impact of non-compliances and comment on the consequential impact thereof," the auditors said.
     
    "Attention is drawn to Note No. 6 of the statement dealing with going concern assumption for preparation of the unaudited financial results of the Company. The Company's current liabilities exceeded its current assets.
     
    "The matters forming part of and dealt with under Para 5 above may have significant impact on the net worth of the company. Funds obtained by borrowing and utilized for providing funds to other companies have become unserviceable primarily due to non-repayment of outstanding amounts by those companies.
     
    "This has resulted in insufficiency of company's resources for meeting its obligations. These conditions indicate the existence of a material uncertainty about the company's ability to continue as a going concern," the auditors said.
     
    "However, the unaudited financial results of the Company due to the reasons stated in the said Note has been prepared by management on going concern basis, based on the management's assessment of the expected successful outcome of the steps and measures including those concerning restructuring/reduction of borrowings and interest thereon in terms of resolution plan under considerations of lenders and restructuring of outstanding loans receivables in sync with said plan as dealt with in Note no. 6 and other proposals under evaluation as on this date," they added.
     
    "In the event of the management's expectation and estimation etc., not turning out to be true, possible impact on carrying value of tangible and intangible assets even though expected to be material, as such presently cannot be commented upon by us. Our conclusion is not modified in respect of this matter," they added.
     
    In respect of Inter-Corporate Deposits (ICDs) given to the promoter group and certain other companies, the amount outstanding aggregates to Rs2,83,546 lakh as on September 30, 2020 (net of provision of Rs1,098 lakh).
     
    Interest accrued up to 31 March 2019 and remaining unpaid as on 30 September 2020 aggregates to Rs1,969 lakh (net of provision of Rs6,947 lakh). Interest on such ICDs considering the waiver sought by borrower companies and uncertainties involved with respect to their repayment capabilities and proposed terms and conditions pending finalisation of resolution plan and determination of amount thereof, has not been accrued in the previous year and even during the period. Over and above, the company has issued corporate guarantee and letters of comfort to these companies.
     
    The management said in its financial statements that steps are being taken to restructure the borrowings and related financial obligations of the company as well as of various group companies and necessary resolution plan in this respect is under consideration of lenders.
     
    "The management believes that the outstanding dues, net of provision for amount considered doubtful, as mentioned above, shall be recovered/adjusted. Necessary approval of shareholders for such loans, guarantees etc. as required in terms of Section 186 of the Companies Act, 2013 have been obtained on 25 September 2020. Necessary further compliances in this respect concerning provisions of Companies Act, 2013 will also be ensured in due course oftime and no further provision is required at this stage and any adjustments required consequent to finalisation of resolution plan will be given effect to on determination of the amount thereof," it said.
     
    Operational earnings and performance of the company even though has improved over the period, the company's financial position has continued to be under stress. The Inter-Corporate Deposits (ICOs) given to various group companies to provide them funds for strategic reasons for meeting their various obligations along with interest to the extent applicable are outstanding as on this date.
     
    "These have resulted in mismatch of company's resources vis-a-vis it's commitments and obligations and financial constraints, causing hardship in servicing the short term and long-term debts and meeting other liabilities," the company said.
     
    It said in the financial statements that one of the bankers had issued a notice of default and recalled the amount granted under various facilities and had commenced the proceeding before Debt recovery Tribunal (DRT) for realisation of their debt to the company.
     
    The said banker and one other lender had filed petitions under Insolvency and Bankruptcy Code, 2016 (IBC) with Hon'ble National Company Law Tribunal, Kolkata (NCLT). These petitions are however yet to be admitted by NCLT. Further, certain lenders including those concerning another group company have obtained injunction against disposal of the Company's assets, pending settlement of their dues.
     
    The Resolution process of stressed assets vide circular dated 7 June 2019 issued by the Reserve Bank of India has been initiated by the lenders.
     
    The lenders have appointed an independent professional for carrying out Techno Economic Viability (TEV) study and valuers for carrying out the valuation of the company.
     
    Further, SBI Capital Markets Limited, one of the leading investment banker and adviser, has been appointed by the lender to work out and recommend resolution plan and possible course of action on the matter.
     
    "The forensic audit for utilisation of funds borrowed in the past, conducted on behest of lenders is under advanced stage of completion. The professionals and experts so appointed have submitted their reports and/or recommendations including the Draft Resolution Plan which is pending before lenders for their consideration and decision," the company said.
     
    The management is confident that with the lenders support in restructuring their debt and related and other cost reductions, etc. and other ameliorative measures taken, the company will be able to restructure/reduce its outstanding amount of loan receivable in line with the same and generate sufficient cashflow to meet it's obligations and strengthen it's financial position over a period of time.
     
    Considering that these measures are under implementation and/or under active consideration and lenders are proceeding constructively for arriving at the resolution plan, these unaudited financial results have been prepared on going concern basis, the company said.
     
    The company said the predecessor auditors' had issued an adverse opinion on the audited financial results for the year ended 31 March 2019. Inter-Corporate Deposits to companies as dealt herein above in Note No. 5 include amounts reported upon by predecessor auditor including Rs77,575.00 lakh which were considered by the predecessor auditor in the nature of book entries.
     
    This includes amounts given to group companies whereby applicability of Section 185 and related non-compliances, if any could not be ascertained and commented upon by them. Loan of 2,84,644 lakh given to various parties as given in Note No. 5 are outstanding as on 30 September 2020.
     
    "The issues raised are also being examined by relevant authorities including Registrar of Companies, outcome of which are awaited as on this date. Information required by the authorities have been provided and directions, if any received on conclusion of the proceedings will be dealt with appropriately to ensure necessary compliances. These matters are procedural in nature and/or are subject to the decision by the authorities and do not have any impact as such on the profit or loss for the period," it added.
     
    Pending completion of debt restructuring process and consequential adjustment in this respect, interest on borrowings have been provided on simple interest basis based on the rates specified in term sheet or otherwise stipulated/advised from time to time and penal/compound interest if any has not been considered.
     
    Further, pending such restructuring, amount repaid to lenders and/or recovered by them by executing securities etc., have been adjusted against principal amount outstanding.
     
    The amount payable to the lenders in respect of outstanding amount including interest thereagainst is subject to confirmation and determination and consequential reconciliation thereof in terms of final decision to be arrived at in this respect. Adjustments, if any required in this respect will be recognised on determination thereof and will then be given effect to in the financial results.
     
    Interest on ICDs has not been recognised to the extent of Rs3,376 lakh (including Rs1,194 lakh for the period) pending finalisation of debt resolution process, the company said.
     
    Certain debit and credit balances other than borrowings including inter-unit and other clearing balances, trade and other receivables/payables, advances from customers, loans and advances, other current assets and certain other liabilities including those relating to tea estates are subject to reconciliation with individual details and balances and confirmation thereof. Adjustments/ Impact in this respect are currently not ascertainable, it added.
     
    The observations concerning auditors' opinion on the financial statements for the year ended 31 March 2020 and on the unaudited financial results for the quarter ended 30 June 2020 have been dealt with under Para 4 to 9 above.
     
    During the period, the company has obtained 'shareholders' approval specifying the limit with respect to loans, guarantees and investments made or given by the company under Section 186 of the Companies Act, 2013 including ratification of such loans etc. made in earlier years.
     
    Other matters relate to and are expected to be resolved on the outcome of the resolution plan under consideration for approval as per Note No. 6 above and will then suitably be addressed in the subsequent periods, the company said.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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