Mukesh Ambani helps Anil Ambani clear Ericsson dues. L&T to buy 20.32% stake in Mindtree. Nirav Modi arrested. Former Enron CEO Jeffrey Skilling released after 12-years of imprisonment, plans second act. Etihad seeks to exit Jet, in talks to offload entire stake to SBI. Jet lenders re-initiate talks with Tata Group. Facebook admits it stored passwords unencrypted. Netflix tests mobile subscription service in India.
Moving on to the top Business stories of the week.
Mukesh Ambani helps Anil Ambani clear Ericsson dues. RCom-Jio to terminate asset sale agreement. L&T to buy 20.32% stake in Mindtree. Mindtree Board to meet again on 26th March.
Eleventh Hour Rescue: Mukesh Ambani helped younger brother Anil Ambani clear dues worth INR453cr that RCom owed Ericsson, sparing Anil Ambani from a 3-month imprisonment.
In The Clear: RCom has now cleared its entire dues to Ericsson India, thereby clearing the contempt of a Supreme Court order.
Backstory: The SC had on February 20 said that failure to pay Ericson its dues within four weeks would land Anil Ambani in jail for three months.
Drop It: RCom and Reliance Jio have agreed to terminate the asset-sale agreement citing delays in approval from the government and lenders as the reason.
Strong Objections: Despite more than 45 meetings with lenders over 15 months, more than 40 lenders had refused to give consent to the transaction. Various approvals from the Department of Telecom were also pending.
In Agreement: L&T has agreed to buy Cafe Coffee Day Founder V.G. Siddhartha’s stake in Mindtree for INR3,269cr. L&T has agreed to pay INR980 per share for the 20.32% stake held by Siddhartha and his two affiliate companies.
The purchase price is a 1.8% premium to Mindtree’s closing share price of INR962.50 on Monday.
Looking For More: L&T said it would buy an additional 15% in Mindtree from the open market at INR980 per share. If L&T is successful in purchasing the stake, it will trigger an open offer, since takeover norms mandate that the acquirer should offer to purchase shares from the public once its stake crosses 25% in a listed firm.
No, Go: L&T’s hostile takeover bid for Mindtree has got a thumbs-down from analysts.
The Battle Continues: "L&T wants to buy Mindtree after the latter’s largest shareholders reached out to the infrastructure giant. L&T saw value and business logic in the move and so went ahead. If its proposal turns out to be bad and value-destructive, public shareholders and institutions who collectively have around 6.5 times more skin in the company will tear up the bid and throw it in the bin."
Here is a detailed description of the events that have occurred so far.
See You: Mindtree, which is facing a hostile takeover from L&T, would reconvene its board meeting on March 26 to deliberate on the buyback or the open offer.
Too Late: Mindtree founders were considering the share buyback to thwart any hostile takeover of the company. But since L&T has already announced the open offer, SEBI regulations prevent Mindtree from buying back its shares now.
Nirav Modi arrested. Former Enron CEO Jeffrey Skilling released after 12-years of imprisonment, plans second act.
Finally Caught: Nirav Modi arrested in London today in connection to the INR13,500cr PNB fraud.
Request Granted: The move comes after a London court had issued an arrest warrant against Nirav Modi in response to the Enforcement Directorate's (ED) request for his extradition.
Recap: Nirav Modi had fled India after allegedly siphoning off about INR13,500cr from PNB using Letters of Undertaking (LoU) in collusion with his uncle Mehul Choksi.
12 Years of Slave?: Former Enron CEO Jeffrey Skilling has been released from federal custody after spending 12 years in prison.
Skilling, was released on Thursday after serving 12 years in prison and six months in a halfway house after being convicted for actions that led to one of the worst corporate meltdowns in history. He was convicted of 19 counts of conspiracy, securities fraud, insider trading and lying to auditors in connection with the collapse of the Houston-based energy giant.
Second Act: As per reports, Mr. Skilling has been holding meetings with former Enron executives and others, in an attempt to get back into the energy business.
While the exact nature of the project is unknown, several described it as a digital platform connecting investors to oil and gas projects.
Mr. Skilling is known to have met with individuals who specialize in cryptocurrency, blockchain and software development in recent weeks.
Etihad seeks to exit Jet, in talks to offload entire stake to SBI. Jet lenders re-initiate talks with Tata Group. SpiceJet to lease grounded Jet planes.
Bailing Out: In a bid to exit the beleaguered airline, Etihad Airways has offered to sell its entire stake in Jet Airways to SBI. The company is offering its 24% stake at INR150 per share, which would amount to INR400cr.
If Interested: Etihad has also asked SBI to consider buying its 50.1% stake in Jet Privilege, the frequent flyer programme of Jet Airways.
Etihad also wants SBI to take over its liabilities in the form of a guarantee for Jet Airways' INR1,000cr loan from HSBC Dubai.
New Boss: Lenders of Jet Airways are looking to re-start talks with the Tatas as a possible new investor in the Indian airline.
Interestingly, talks held with the Tata Group previously have not been successful.
Bye Bye: The development comes after Etihad Airways, which holds a 24% stake in Jet Airways, offered to sell its stake in the airline.
Good Riddance: One of Tata’s earlier demands was for the Chairman, Naresh Goyal to step down from the airline's board. Now with Naresh Goyal set to step down and Etihad willing to exit, it is easier for the Tata Group to acquire a controlling share in Jet.
We’ll Take It: SpiceJet is planning to lease Jet Airways' grounded aircrafts from their lessors. According to reports, as many as 50 aircraft are on offer to SpiceJet.
Strapped for Air: The recent grounding of the controversial Boeing 737 Max 8 aircraft by the DGCA has adversely affected the aviation industry's capacity.
Quick Heal: For SpiceJet, which has cancelled several flights on account of this, leasing Jet's grounded planes will be a quick solution to replenishing capacity.
India among world's fastest growing large economies but more needs to be done, reports IMF. More room for foreign investors to bet on India. Fitch cuts India’s GDP growth forecast for FY20 to 6.8%.
Rice noted that while multiple important reforms have been implemented, more of these are needed to sustain growth, including harnessing the demographic dividend opportunity.
More Room: Veteran market strategist Christopher Wood in his weekly research note for investors 'Greed & Fear' noted that there is more room for foreign investors to increase their bets on India.
Rates Slashed: Fitch Ratings cut India’s economic growth forecast for the next fiscal to 6.8 % vs previous estimate of 7%, on back of weaker than expected momentum in the economy.
The rating agency has also cut growth forecasts for FY20 and FY21 to 7% from 7.3% and 7.1% from 7.3%, respectively.
Levi’s soars in IPO. Uber picks NYSE for stock listing. Pinterest files for IPO.
Fly High: Levi Strauss surged more than 30% during its IPO on NYSE on Thursday. Levi’s raised $623m from the stock sale.
Did You Know?: The company was publicly traded in the 1970s and early 1980s, but went private in 1985.
Picking Favourites: The ride-hailing giant, Uber has picked New York Stock Exchange for its IPO next month.
Uber is expected to launch its IPO in April and may be valued as high as $120bn.
The news comes as smaller, ride-sharing rival Lyft prepares to list on the Nasdaq.
Interestingly, major technology companies including Google, Apple and Facebook trade on the Nasdaq. However, NYSE has its own share of big names including Alibaba and General Motors.
On Track: Image-search platform Pinterest made its IPO paperwork public on Friday, putting the platform on pace to begin trading in mid-April. View the details of the filing here.
Video: Know what Uber and Pinterest's IPOs mean for the markets here.
Facebook admits it stored passwords unencrypted. Netflix won’t feature its content on Apple streaming service. Netflix tests mobile subscription service in India. Xiaomi launches payment app in India.
Unencrypted: Facebook has admitted to storing millions of passwords in an unencrypted manner on its internal servers, a security slip that left them readable by the social networking giant's employees.
Chilling Facts: According to a report by KerbsOnSecurity as many as 600m users of the social network had account passwords stored in plain text files searchable by more than 20,000 employees.
Phone Pe: Netflix is testing a mobile-only subscription with select users in India, as it looks to expand its user base in the country.
More for Less: The video streaming service is charging INR250 per month for the mobile-only plan, which is half of the INR500 monthly pricing Netflix had launched as its entry-level plan in the country.
This move will help Netflix retain its existing premium subscription offering while attracting a potential set of new subscribers in the country.
Apple Away: Netflix has announced that it will not make its TV shows and movies available through Apple’s upcoming streaming service.
Watch Here: Netflix commented that it prefers its customers watch all of its content on Netflix itself and not on some other service.
Apple is expected to unveil a television and video service later this month, a move that will increase competition for Netflix and other online streaming services.
Another One: Xiaomi has launched its payments app Mi Pay in the country. The platform is built on the Unified Payments Interface (UPI) in collaboration with National Payments Corporation of India (NPCI) and ICICI Bank and supports over 120 banks.
Only For Mi: The service offers instant peer-to-peer transfers to other Mi Pay users or bank accounts. It is highly integrated with Mi UI and allows for instant payments from other native Xiaomi apps such as SMS, contacts, and scanner.
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