The World Bank has reportedly suspended L&T from bidding for World Bank contracts for six months after it found evidence that an employee of the company had forged documents to win a supply deal five years ago. The World Bank's anti-graft investigators found that L&T had failed to prevent the employee from falsifying documents to help secure a contract to supply ultrasound scanners for a health project funded by the multilateral lender in Tamil Nadu in 2008. The World Bank has barred L&T from bidding for World Bank contracts between 7 March 2013 and 6 September 2013.
However, L&T on Saturday, 9 March 2013 clarified that the sanctions imposed by the World Bank for 6 months ending 6 September 2013, from participating in World Bank funded/executed projects is not expected to have material impact on the company's present or future operations or its profitability or financials. L&T looks forward to the opportunity to participate in future World Bank Projects upon completion of this 6 month period of ineligibility.
Mahindra & Mahindra (M&M) after trading hours on Friday, 8 March 2013 said that it would carry out replacement of certain parts for a select batch of its XUV500 model. This is in keeping with its customer centric approach as well as in compliance with the recently announced voluntary code on vehicle recall, M&M said. The company said it will carry out preventive replacement of some parts in a select batch of XUV500s manufactured during 2011 and 2012. The replacement of three parts, including the fluid hose, front power window units as well as the left wiper blade cover, would be carried out with immediate effect, M&M added. This replacement would be free of cost for XUV500 customers who would be individually contacted by the company, M&M said.
Shares of PSU OMCs and auto stocks will be in focus after the Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily informed the Lok Sabha in a written reply on Friday, 8 March 2013, that out of the total projected under recovery of Rs 163969 crore (as per the Refinery Gate Price effective 1 March 2013) of the Public Sector Oil Marketing Companies (PSU OMCs) on sale of sensitive petroleum products during 2012-13, under recovery on sale of diesel accounts for around 57%. In order to reduce under-recovery of the PSU OMCs on sale of diesel, the government decided in January 2013 to authorize the PSU OMCs to sell diesel to all consumers taking bulk supplies directly from the installations of the PSU OMCs at the non-subsidized market determined price. OMCs have implemented the decision with effect from 18 January 2013, Dr. Moily said. The primary objective behind the pricing reforms undertaken by the government is the growing imperative for fiscal consolidation, the need for reducing the subsidy burden on petroleum products so as to allocate more funds to social sector schemes for the common man and for ensuring country's energy security in the long term, Dr. Moily said.
Dr. Moily also emphasized that the oil ministry has advised PSU OMCs to take sufficient safeguards and all necessary measures to avoid diversion of subsidized diesel from their retail outlets. Replying to another question, the oil minister informed that in order to insulate the common man from the impact of rise in oil prices in the international market and in view of the domestic inflationary conditions, the government continues to modulate the retail selling price (RSP) of diesel (partially), PDS Kerosene and Subsidized Domestic LPG, resulting in incidence of under-recoveries to the PSU OMCs.
Telecom stocks will be in focus the Ministry of Communications & Information Technology on Friday, 8 March 2013, said that tariff for mobile services has been showing continuous downward trends for the past several years. However, recently some telecom access service providers hiked certain components of mobile tariff. In many cases the hike is in the nature of withdrawal of concessions, reduction of free minutes and/or reduced validity in Special Tariff Vouchers. The hikes, however, have not substantially altered the average outgo per outgoing minute, Mr. Milind Deora, Minister of State for Communications & Information Technology said in a written reply to a question in Rajya Sabha.
As per the current tariff framework, tariff for mobile services is under forbearance except for national roaming where ceiling tariff has been specified. Mobile operators have the flexibility to offer different tariffs depending on the market conditions and other commercial considerations.
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Pantaloon Retail (India) (PRIL) after trading hours on Friday, 8 March 2013 said that the company has, inter alia, entered into Share Purchase Agreement (SPA) with Industrial Investment Trust (hereinafter referred to as IITL) to sell its part holding in Future General India Life insurance Company (FGILICL) representing 22.5% of the equity share capital of FGILICL. IITL is an investment company duly registered as a non-banking financial company (non deposit taking) with the Reserve Bank of India (RBI) and is listed on the BSE and the National Stock Exchange of India. The transaction is subject to the receipt of the necessary approvals from governmental and regulatory authorities, including the CCI, the IRDA and the RBI, PRIL said. Post completion of the transaction, Future Group consisting of PRIL and Sprint Advisory Services shall continue to hold 52% shares in FGILICL with the other shareholders being Participatie Maatschappij Graafschap Holland NV (which is a subsidiary of Assicuranzioni Generali S.P.A) and IITL, PRIL said.
Suzlon Energy's board of directors by way of circular resolution on Friday, 8 March 2013, approved the Corporate Debt Restructuring Package as approved by CDR EG, for implementation of CDR package. The Board approved the allotment of equity shares/compulsorily convertible debentures of the company to CDR Lenders, as may be agreed between the company and the CDR Lenders, on preferential basis in accordance with the ICDR Regulations, in consideration of Funded Interest Term Loan(s) and/or first 3 years' sacrifice, up to 78.37 crore fully paid-up equity shares of the company of Rs 2 each at Rs 18.51 per share, being the price arrived in terms of ICDR Regulations, for an amount not exceeding Rs 1451 crore.
The Board also approved the allotment of equity shares of the company to non-CDR Lenders, as may be agreed between the company and the non-CDR Lenders, on preferential basis in accordance with the ICDR Regulations, in consideration of Funded Interest Term Loan(s), up to 12.52 crore fully paid-up equity shares of the company of Rs 2 each at Rs 18.51 per share, being the price arrived in terms of ICDR Regulations, for an amount not exceeding Rs 231.70 crore and/or compulsorily convertible debentures for amount not exceeding Rs 231.70 crore.
Out of the above 90.89 crore equity shares, around 42 crore equity shares would be issued in April 2013, whereas the rest would be issued in one or more tranches till September 2014.
The Board also approved the allotment of equity shares and/or compulsorily convertible debentures of the company, on preferential basis in accordance with the ICDR Regulations, to the Promoters in consideration of conversion of unsecured loan of Rs 145 crore given by the Promoters to the company forming a part of the CDR Package; conversion of unsecured loan of Rs 103 crore given by the Promoters to the company forming a part of the promoter contribution under the CDR Package; up to Rs 129 crore to be brought in by the Promoters as promoter contribution, from time to time, as per the CDR Package, thus aggregating to an amount not exceeding Rs 377 crore and any other amount as may be invested by the Promoters, in accordance with their obligations under the CDR Package.
The Board further approved the allotment of equity shares and/or compulsorily convertible debentures of the company, on preferential basis in accordance with the ICDR Regulations, to Samimeru Windfarms, in consideration of conversion of unsecured loan of Rs 22 crore given by Samimeru Windfarms to the company forming part of the promoter contribution under the CDR Package.
The Board approved the acquisition of stake of Kalthia Group in Suzlon Structures, a subsidiary of the company, by share swap in accordance with the ICDR Regulations. The Board also approved to increase the authorised share capital of the company. The Board further approved to amend the Other Object Clause of the Memorandum of Association of the company and to give effect to the said amendment, Suzlon said. The Board also approved the sale of undertaking(s) of the company.
The company will seek approval of shareholders through postal ballot for the above purposes, Suzlon said.
Speaking on the development, Mr Kirti Vagadia, CFO, Suzlon Group, said: While this is an important step for the company to complete the various aspects of the CDR scheme, it is also a key step towards improving the financial health of the company. We anticipate that with these steps we will, by mid-April 2013, improve our leverage position in terms of our debt-to-equity ratio. We believe that by our lenders taking an equity position, in addition to providing critical financial support, is an important signal of their confidence in our fundamental viability as a business, and our long term outlook. Along with the other enabling resolutions around the acquisition of outstanding shares in a subsidiary and approval for sale of undertakings, these steps will help us realise greater efficiencies and continue to normalize our business.
Aviation stocks will be in focus after the Cabinet Committee on Security (CCS) on Friday, 8 March 2013, cleared Flexible Use of Airspace (FUA) by civil and military users. The primary objective of FUA is to enhance airspace capacity, minimize delays, fuel conservation, emission reduction and ultimate benefits to travelling public, the Ministry of Civil Aviation said in a statement. Implementation of FUA through efficient civilian military co-ordination is an essential requirement to foster the traffic growth with ultimate benefit to the nation's economy. FUA permits both military and civil user to efficiently and effectively utilize the available airspace on sharing basis to gain optimum usage, thereby enhancing its capacity, which results into efficient operations. In this model a coordinated procedure between the civil and the military and vice versa, as per need and on a real time basis if it is not being used by the user assigned with the responsibility for its control.
With the implementation of FUA, there will be a fuel saving of 20,29,380 kg per annum and reduction of carbon dioxide emission by 63,93,600 kg per annum by direct routing between seven city pairs of Delhi-Mumbai, Delhi-Kolkata, Delhi-Chennai, Delhi-Hyderabad, Delhi- Begaluru, Kolkata-Chennai and Chennai-Mumbai for which the information is available, the Ministry of Civil Aviation said.
Rashtriya Chemicals & Fertilizers (RCF) will be in focus after the finance ministry after trading hours on Friday, 8 March 2013, said the Offer for Sale (OFS) for divestment of Government of India's (GoI) 12.5% stake in RCF was subscribed over 1.3 times on Friday, 8 March 2013. The GoI will receive approximately Rs 310 crore from the sale proceeds. The issue was subscribed by all categories of investors including retail investors, the finance ministry said. After the successful completion of the divestment, the GoI's stake in RCF has declined to 80% from earlier 92.5%.
Shares of Neyveli Lignite Corporation will turn ex-dividend today, 11 March 2013 for an interim dividend of Re 1 per share for the year ending 31 March 2013.
Shoppers Stop has opened "Shoppers Stop" store at World Trade Park, Jaipur. Existing "Shoppers Stop" store at Malavia Nagar, Jaipur is proposed to be operated as another retail format in due course of time. With these, number of "Shoppers Stop" stores (including two airport stores) under its operations is 55.
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