Naresh Goyal to exit Jet Airways cockpit as banks take control. Paytm Mall stands to gain much from the new ecommerce FDI policy.
Maruti and Mahindra to halt diesel engine production. Amazon cancels plan for New York Headquarters.
Now to Today's Top Business News Stories in Our End Of Day Wrap Up:
Naresh Goyal to exit Jet Airways cockpit as banks take control. IndiGo cancels over 130 flights in a single day.
The What: Jet Airways Board has approved issuance of 114 million fresh shares of the company to a consortium of banks led by SBI.
What You Need to Know: Following this issuance, banks will hold c. 50% share in the airline after converting their debt into equity, rendering them as majority shareholders in the airline.
What Does This Mean?: This means that Founder and Chairman, Naresh Goyal may see a massive drop in his shareholding to 25% from the current 51%. Abu Dhabi-based Etihad Airways, which currently owns a 24% stake in Jet, may also see its ownership halve.
Growing Pains: The carrier, which owes the banks over $1.5bn, announced its fourth consecutive quarterly loss yesterday. Jet Airways posted a net loss of INR588cr in October-December, 2018 vs a net profit of INR165cr last year. This has added urgency to the debt recast, which has long been in the making.
Breathing Room: Click here to read what a change in ownership would mean for Jet. See what the Twitterati had to say here.
Cancel That: Acute shortage of pilots along with safety warnings at some airports forced IndiGo to cancel around 130 flights on Friday, accounting for around 10% of the airline's operations. Learn more on the matter here.
Paytm Mall stands to gain much from the new ecommerce FDI policy. CBDT may levy digital tax.
Taking Advantage: India’s ecommerce sector has clearly taken a hit on the back of the new ecommerce FDI regulations, which forbids retailers from giving any deep discounts, and holding any business interest in online merchants listed on their websites including exclusive arrangements.
However, this has presented Paytm Mall, Paytm’s e-retail arm with an opportunity to move up the order. Read this article to know how.
New Law: Central Board of Direct Taxes may impose 30-40% digital tax on tech giants like Google and Facebook for digital services offered by global firms in India from units based outside the country, depending on their user base (> 200,000) and revenues.
New…But Old: The proposed tax is in line with the current tax structure wherein subsidiaries of foreign companies in India pay 40% tax.
Let’s be Friends: Chinese internet technology company ByteDance, owner of Tick-Tok and Helo moves to counter rather severe regulation in the Indian market.
TikTok has also acquired the services of Apurva Mehta, former legal counsel and Director, Government Affairs at Qualcomm for India & South Asia, and Rahul Jain, who was part of the Public Policy Team at Google India.
Read more on the matter here.
Maruti and Mahindra to halt diesel engine production. Brent oil hits 2019 high at $65.10.
No More: Major car manufactures, including Maruti Sukuzi and Mahindra & Mahindra are likely to stop production of diesel cars in India. instead focus on offerings that run on CNG and petrol.
But Why?: The move comes in response to increasing regulations on diesel cars, shifting demand for petrol and other ecofriendly vehicles and a narrowing price differential between petrol and diesel.
New High: Brent oil rose to a high of $65 per barrel earlier today on back of OPEC-led supply cuts and announcement of a higher-than-expected cut by its de facto leader Saudi Arabia.
US-China close to finalizing a trade deal.
Nearly There: China and the US move towards diffusing trade tensions, with negotiators set to meet again next week. In the latest round of talks, negotiators from both sides made progress in outlining the framework for the agreement in the form of a Memorandum of Understanding (MoU).
Some Perspective: A MoU with China could give the US a rationale to extend the deadline for lifting tariffs (March 1) on $200bn of Chinese goods, without wrestling any concrete concessions from China.
Never Again: Analysts note, whatever the outcome of a trade deal, the uncertainty that the trade war has triggered is likely to linger for some time with US likely to further restrict Chinese investment and its access to technology and high-tech products in the country. Read more on this here.
Amazon cancels plan for New York Headquarters.
Letting Go: Amazon abandons its plans to build its second headquarters in New York.
Backstory: The move comes in response to rising opposition from local politicians who opposed the $2.8bn in incentives promised to Amazon in a deal secretly negotiated by New York Governor.
Lost Chance?: Amazon had announced it would create 25,000 jobs and build one of the two new headquarters based in the Long Island City neighborhood in Queens.
The Man: Senator Michael Gianaris singlehandedly fowled the tech Giants plans. More on him here.
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