Indian Bank announced after market hours yesterday, 8 June 2015, that it has reduced the Base Rate from 10.25% to 9.95% per annum and the Benchmark Prime Lending Rate (BPLR) by 30 basis points from 14.50% to 14.20% per annum with effect from 8 June 2015.
Tata Steel will be watched. With respect to news titled, "Tata Steel, Swansea varsity tie up," Tata Steel clarified after market hours yesterday, 8 June 2015, that the new item is based on a release issued by the company's subsidiary in Europe. This is research related project. It has no impact and not material to Tata Steel's operations, the company added.
Bajaj Finance said before market hours that in respect of the qualified institutional placement (QIP), the special committee of the company at its meeting held yesterday, 8 June 2015 has approved and declared the closure of the QIP on 8 June 2015. The board has also approved the issue price of Rs 4,275 per share (which is at a discount of Rs 132.34 per share to the floor price of Rs 4,407.34 per share) for the shares to be allotted to eligible qualified institutional buyers in the QIP. The board approved the issuance of up to 32.74 lakh shares at the aforesaid issue price for the QIP, which aggregates to approx. Rs 1400 crore.
Bank stocks will be in focus after the Reserve Bank of India (RBI) after trading hours yesterday, 8 June 2015, announced that banks can undertake a Strategic Debt Restructuring (SDR) of a stressed assets by converting loan dues into equity shares. SDR will provide banks with enhanced capabilities to initiate change of ownership in cases of restructuring of accounts where borrower companies are not able to come out of stress due to operational/managerial inefficiencies despite substantial sacrifices made by the lending banks, the RBI said. At the time of initial restructuring, the Joint Lenders' Forum (JLF) must incorporate, in the terms and conditions attached to the restructured loan/s agreed with the borrower, an option to convert the entire loan (including unpaid interest), or part thereof, into shares in the company in the event the borrower is not able to achieve the viability milestones and/or adhere to 'critical conditions' as stipulated in the restructuring package. This should be supported by necessary approvals/authorisations (including special resolution by the shareholders) from the borrower company, as required under extant laws/regulations, to enable the lenders to exercise the option effectively. Restructuring of loans without the required approvals/authorisations for SDR is not permitted. If the borrower is not able to achieve the viability milestones and/or adhere to the 'critical conditions' as stipulated in the restructuring package, the JLF must immediately review the account and examine whether the account will be viable by effecting a change in ownership. If found viable under such examination, the JLF may decide on whether to invoke the SDR, i.e. convert the whole or part of the loan and interest outstanding into equity shares in the borrower company, so as to acquire majority shareholding in the company.
In order to achieve the change in ownership, the lenders under the JLF should collectively become the majority shareholder by conversion of their dues from the borrower into equity, according to the RBI notification. However, the conversion by JLF lenders of their outstanding debt (principal as well as unpaid interest) into equity instruments shall be subject to the member banks' respective total holdings in shares of the company conforming to the statutory limit in terms of Section 19(2) of Banking Regulation Act, 1949. Post the conversion, all lenders under the JLF must collectively hold 51% or more of the equity shares issued by the company. The share price for such conversion of debt into equity will be determined as per a formula prescribed by the RBI.
Provisions of the SDR would also be applicable to the accounts which have been restructured before the date of this circular provided that the necessary enabling clauses are included in the agreement between the banks and borrower, the RBI said.
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According to the RBI notification, JLF and lenders should divest their holdings in the equity of the company as soon as possible. On divestment of banks' holding in favour of a new promoter, the asset classification of the account may be upgraded to 'Standard'. However, the quantum of provision held by the bank against the said account as on the date of divestment, which shall not be less than what was held as at the 'reference date', shall not be reversed. At the time of divestment of their holdings to a 'new promoter', banks may refinance the existing debt of the company considering the changed risk profile of the company without treating the exercise as 'restructuring' subject to banks making provision for any diminution in fair value of the existing debt on account of the refinance. Banks may reverse the provision held against the said account only when all the outstanding loan/facilities in the account perform satisfactorily during the 'specified period', i.e. principal and interest on all facilities in the account are serviced as per terms of payment during that period. In case, however, satisfactory performance during the specified period is not evidenced, the asset classification of the restructured account would be governed by the extant IRAC norms as per the repayment schedule that existed as on the reference date, assuming that 'stand-still'/above upgrade in asset classification had not been given. However, in cases where the bank exits the account completely, i.e. no longer has any exposure to the borrower, the provision may be reversed/absorbed as on the date of exit.
Spicejet will be watched. With reference to the news captioned "SpiceJet plans to add 7 aircrafts", Spicejet clarified after market hours yesterday, 8 June 2015, that in this regard, the company would like to draw attention it its earlier communication dated 21 May 2015 wherein it announced that it is making efforts to increase its fleet size to 45-50 aircraft by the financial year ending March 2016. The company is making continuous efforts to ramp-up its fleet size and the news item regarding addition of seven (7) aircraft to the fleet is within the overall strategy of increasing the fleet size to 45-50 aircraft from the current fleet size of 35 aircraft as informed earlier, the company added.
Sanofi India announced after market hours yesterday, 8 June 2015, that its attention has been invited to reports which have appeared in the newspapers on 6 June 2015 stating that the Competition Commission of India (CCI) has imposed a fine of Rs 3 crore on Sanofi India for indulging in unfair trade practices.
The company clarified that the CCI has not imposed the fine on Sanofi India, whose shares are listed on Stock Exchanges in India. The fine has been imposed on Sanofi Pasteur India, which is an unlisted company and a 100% subsidiary of Sanofi SA, France, the company added.
Dalmia Bharat Sugar and Industries will be watched. With reference to the news captioned, "Dalmia Bharat to invest Rs 150 crore," Dalmia Bharat Sugar and Industries clarified after market hours yesterday, 8 June 2015, that the total capital expenditure on projects is Rs 115 crore and not Rs 150 crore, as mentioned in the article. This disclosure was made couple of years back in the fiscal year 2012-13 in the annual report of the company. This is to inform that it is part of the total capex planned in Kolhapur for which the requisite approvals had been taken for the entire project earlier. This capex is part of same planned expenditure, the company added.
ZF Steering Gear India announced after market hours yesterday, 8 June 2015, that it signed memorandum of co-operation with JSC 'Bate' of Republic of Belarus. ZF Steering Gear (India) said it was a part of the recent delegation to Republic of Belarus. During this visit, the company signed a 'Memorandum of Co-operation' with JSC 'Bate' managing company of the holding 'Automotive Components', the Republic of Belarus, to develop scientific, technical, industrial and commercial co-operation and to implement joint-projects, develop and sale of various products/ components.
The company has recently received the first order from Belarus, from the company AVTOGYDROUSILITEL (AGU) located at Borisov, a group company of the BATE holding company, valued at $701,100 (approximately Rs 4.5 crore) for supply of components, ZF Steering Gear India said in a statement.
In a separate announcement after market hours yesterday, 8 June 2015, ZF Steering Gear India said that its joint venture company, in which the company holds 26% equity stake and 74% is held by Robert Bosch Automotive Steering GmbH, stands changed from 'ZF Lenksysteme India' to 'Robert Bosch Automotive Steering' with effect from 4 June 2015.
Ashapura Minechem announced after market hours yesterday, 8 June 2015, that the company's wholly-owned subsidiary Bombay Minerals Limited along with Cura Global Holdings Limited, Mauritius (a part of the prominent overseas investment fund Lambasa Global Opportunity Fund B.V.) have signed an agreement to jointly acquire 25.52% of equity shares of Orient Abrasives at a price of Rs 29.50 per share from its current promoters. In accordance with the prevalent open offer rules and regulations as stipulated under SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011, they shall also make an open offer for acquisition of OAL's shares from the public up to 26% at Rs 29.50 per share.
Orient Abrasives announced after market hours yesterday, 8 June 2015, that Mr. S G Rajgarhia, along with other promoters of Orient Abrasives, have entered into a share purchase agreement, on 8 June 2015 with Bombay Minerals and Cura Global Holdings, a company incorporated under the laws of Mauritius, for sale of 3.05 crore shares held by them in the company (aggregating 25.52%) at a price of Rs 29.50. Other sellers under the share purchase agreement include: Mrs Usha Rajgarhia Mrs Anisha Mittal and Ms Bhavna Rajgarhia. The proposed sale of shares as aforesaid is subject to various conditions precedent including regulatory approvals.
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