The Mint report for 24 November 2009

The Mint report for 24 November 2009

New Delhi: A consortium of banks that lent money to Subhiksha Trading Services is trying to figure out a way to revive the now defunct company. The banks have hired the rating agency ICRA to carry out a feasibility study. The move to bring Subhiksha back to life comes at a time when some of its other creditors are trying to wind up the company. Just on Tuesday the Supreme Court told the Madras High Court to decide on whether the proposed merger between Subhiksha and another company, Blue Green Constructions and Investments is financially viable. The lenders trying to revive Subhiksha include ICICI Bank and HDFC Bank.

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And there’s good new for banks like ICICI and HDFC banks. Modified government rules from earlier this year could have designated them foreign-owned. But the finance ministry has told Mint the government will fix the issue by the end of the year. Earlier, the RBI had criticized the modified rules saying they would create a new class of banks that were owned by foreigners but controlled by Indians. It had also pointed out that top private banks like ICICI Bank and HDFC Bank would be classified as foreign-owned under the new rules.

India busiest airport wants to secure itself against defaulting airlines. The Mumbai airport has asked all domestic and international airlines to maintain a bank guarantee that’s worth six months of payments to the airport. Several loss-making airlines in India have defaulted on their payments in recent months. Currently, Kingfisher Airlines owes the airport Rs30-40 crore, while Jet Airways owes it Rs20-30 crore. Air India owes the Mumbai airport about Rs90 crore. Delhi’s airport already has a similar bank guarantee policy in place.

Hindalco Industries has raised $600 million to fund its expansion plans. The company sold shares to institutional investors at Rs130.90 each, which was a 2% discount over the share’s closing price on Monday. Hindalco is India’s biggest aluminum producer and is planning to triple its production to 1.5 million tonnes.

The Bombay Stock Exchange or BSE said it is preparing for a listing of its own but added that it cannot give a timeframe for when it will go public. The BSE also says it wants to reduce its reliance on revenues from cash equity trading within the next two years.