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Govt's Rescue Op for Bankrupt Firms, EU Approves Brexit Deal et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 26, 2018 12:55 PM 3 min read
Editorial

Good evening reader,

 

The 26/11 Mumbai attacks, whose clinical brutality still haunts us with dread and abhorrence, challenged our basic notions around the structure of terror.

 

Terror moved away from crowded trains and bazaars to the lobby, swimming pool, and corridors of five star hotels.  

 

Terror switched gears from being an instant act of barbarity, invisible to anyone barring the victims, to a four day cycle in trauma, televised straight to our homes.

 

Most people are today circumspect, trying to figure if such an attack can again happen? But why only today? Why not on a going concern?

 

Questioning the country's security preparedness is an exercise worth pursuing. But, the editorials and media commentary which mushroomed over the last 24h would switch back to rather inward-looking matters in the next 24, only to hit back in an year's time, albeit with reduced intensity.

 

Our remembrance needs to be more than symbolic. Our concerns need to be flagged more regularly. With more structure.

 

Just like the next terror attack we're trying to counter.

 

Moving on to today’s Top 6 Business Stories through our End of Day Wrap Up:

 

Standard Chartered Bank moves NCLT against ArcelorMittal bid for Essar Steel.

 

Standard Chartered Bank, the third largest secured financial creditor of Essar filed a petition with the National Company Law Tribunal (NCLT) against the decision of Committee of Creditors regarding ArcelorMittal’s bid for Essar.

 

What You Need To Know: Standard Chartered claims that the deal would bring its dues down to INR60.7cr vs. total payables of INR3,487cr.

 

Government to introduce corporate rescue option for bankrupt firms.

 

The Government of India is planning to introduce “Pre-packaged Bankruptcy Schemes,” in a bid to reduce litigation involving resolution of bankrupt companies.

 

The What: Under this program, creditors and shareholders will approach a bankruptcy court with a pre-negotiated corporate plan for reorganization.

 

The Why: This new process will ensure resolution of bankruptcy cases out of court to safeguard the value of the company in question, while also saving time and money.

 

SRL Diagnostics likely to be listed by 2019, as IHH Healthcare plans to market the brand abroad.

 

As per a Business Standard report, IHH Healthcare is in the process of taking over the Fortis subsidiary and eyes to list SRL Diagnostics on the stock exchanges. In addition to INR4,000cr invested earlier, the group is to infuse another INR2,000cr for:

 

  • Buying out 31% stake held by PE entities in SRL
  • Fulfilling working capital, other funding requirements

 

IHH also plans to take SRL Diagnostics to Southeast Asian markets, where it has a solid presence.

 

Government permits OMCs to open 56,000 new petrol pumps.

 

In a move to boost employment and investment, the government allowed state-run Oil Marketing Companies (OMCs) to open over 56,000 new petrol pumps, ahead of general elections.

 

Perspective: The expansion, which has been undertaken by Indian Oil, Bharat Petroleum and Hindustan Petroleum, aims to ‘meet the growing fuel demand and customer convenience on highways, agricultural pockets and industrial hubs.’

 

US/INTERNATIONAL

 

EU leaders approve Brexit deal for UK’s “orderly withdrawal.”

 

The Big Picture: At a meeting in Brussels, the 27-member European Union (EU) approved the Withdrawal Agreement that set the terms under which the UK will leave in March 2019 and the Political Declaration which establishes a framework for a future trade deal.

 

What You Need To Know: The UK Parliament is set to vote on the deal on 12th December, but its approval is uncertain. If the deal does not go through, PM Theresa May may have to approach Brussels for improved terms before March 2019.

 

However, leaving without a deal will have the UK face disruptions in trade and security ties.

 

Carlos Ghosn denies allegations of financial misconduct.

Former Chairman of Nissan, Carlos Ghosn has denied alleged wrongdoings saying that he had no intention of under-reporting his income on financial documents, according to Japan’s public broadcaster NHK.

 

Up Close: According to Ghosn, the amount he had collected over five years was to be received as deferred payment on retirement, which then wouldn't have to be reported in Japanese regulatory filings. However, Nissan claimed that it should have been highlighted.

 

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