The week in review for 02 October 2009

The week in review for 02 October 2009
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First Published: Sat, Oct 03 2009. 12 30 AM IST
Updated: Sat, Oct 03 2009. 12 15 PM IST
New Delhi: After months of negotiations, Bharti Airtel’s merger talks with MTN finally fell through on Wednesday after the South African government rejected the deal. At issue was the South African government’s determination to retain MTN’s national identity and the Indian government’s inability to allow dual listing of a merged company. Recently, Sebi changed the rules on GDRs, a move which could have forced MTN to spend more money to make an open offer for Bharti shares.
A merger between Bharti and MTN would have created the world’s third largest wireless phone company with 200 million subscribers and annual revenues of $20 billion.
Air India pilots ended their four-day strike on Wednesday after civil aviation minister Praful Patel told them the airline would freeze its plans to reduce their paychecks. A section of Air India’s executive pilots had been protesting a plan to cut productivity-linked incentives by up to 50%.
And while the end of the strike has given Air India a breather, its backing down on pay cuts may complicate the airline’s restructuring plans. Already, the four-day strike has cost Nacil, which runs Air India, about Rs100 core. Air India has accumulated losses of Rs7,200 crore and as of June, has a debt of Rs15,241 crore.
Nacil is looking for a Rs15,000 crore rescue package from the government that depends on cost-cutting measures like reducing paychecks.
NTPC and RIL will have to resume their legal battle over gas supplies in the Bombay high court. On Thursday, the Supreme Court dismissed NTPC’s appeal challenging an unfavourable Bombay high court ruling in the legal dispute.
NTPC was challenging a Bombay high court decision that allowed RIL to amend its legal petition to include a government affidavit, also filed in the Bombay high court but pertaining to RIL’s separate gas dispute with RNRL.
September has been a bonanza month for India’s auto makers, with the festive season and cheaper loans driving up sales. Hyundai Motor India posted sales of nearly 28,000 units, an increase of 25% from last year. Maruti Suzuki sales shot up 10.7% to more than 71,000 units and Mahindra and Mahindra saw record sales of about 27,000 units, up 12% from a year ago.
On Tuesday, Bharti Shipyard’s shareholders gave it the go-ahead for increasing its borrowing limit to Rs7,000 crore from the earlier Rs5,000 crores. Bharti Shipyards needs the money to buy a controlling stake in Great Offshore Ltd., which is India’s biggest integrated offshore provider. Another company, ABG Shipyard is also in the race for Great Offshore.
Banks that lent money to Vishal Retail are now working out a plan to restructure its debt of about Rs730 crore. Under the deal, Vishal Retail will pay the debt over 9 years at an interest rate of 6%.
Reliance Capital will soon offer health insurance policies of three to five years through it subsidiary Reliance Life Insurance. The company is using its life insurance arm because it has a bigger retail distribution network and can offer policies of more than one year.
India’s exports declined in August, but at a slower rate than in the last eight months. Merchandise shipments dropped 19.4% from a year earlier to $14.3 billion. Overseas sales account for about 15% of India’s economy.
Inflation rose higher than expected with the Wholesale Price Index climbing to 0.83% in the 12 months to 19 September.
The IMF has cut its 2010 growth forecast for India to 6.4% from the earlier 6.5%. It also says consumer price inflation will be around 8.7% in 2009 and 8.4% in 2010.
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First Published: Sat, Oct 03 2009. 12 30 AM IST
More Topics: News | Recap | Week in Review | Bharti Airtel | MTN |