Transfin.
HomeNewsGuidesReadsPodcastsVideosTech
  1. News
  2. Explained

IDBI May Be Renamed as LIC IDBI Bank or LIC Bank, Moody’s Downgrades Bharti Airtel, Zee Group Chairman Gives Personal Guarantee to Lenders et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Feb 5, 2019 2:09 PM 3 min read
Editorial

Moody’s downgrades Bharti Airtel to ‘junk’. IDBI may be re-christened as LIC IDBI Bank or LIC Bank. Donald Trump to nominate David Malpass as the next World Bank President.

 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

 

DISRUPTIONS

Zee Group Chairman Subhash Chandra gives personal guarantee for payment obligations to lenders. India’s services PMI slips for second month. 

 

Lenders of Zee have entered a formal agreement with Chairman Subhash Chandra asking him to provide a personal guarantee for payment obligations on an “irrevocable and unconditional” basis.

 

Zee and its lenders had earlier entered an agreement to not sell off anymore pledged shares even if their value fell, providing Essel Group with adequate time to complete the strategic sale process of its key assets without any compromise on the value.

 

Living on the Edge: Dewan Housing Finance Corp. Ltd (DHFL) was recently downgraded by CARE Ratings and ICRA following a report by Cobrapost which accused it of siphoning funds through shell companies. 

 

While DHFL and its holding company Wadhawan Global Capital have taken steps to prevent default on repayments by leveraging its cash holdings worth c. INR5,000cr, its stake in Aadhar Housing Finance Ltd and its asset management business, it is unlikely to go long without defaulting. Read this article to know why.

 

Against this backdrop, DHFL is looking for strategic partners which will trim promoter holdings in the company.

 

Also this: India’s services PMI for January fell to 52.2 in January vs. 53.2 in December.

 

AIRTEL

Moody’s downgrades Bharti Airtel to ‘junk’. 

Move to Trash?: Moody's has downgraded the senior unsecured rating for Bharti Airtel as well as the backed senior unsecured notes issued by Bharti's wholly owned subsidiary, Bharti Airtel Int'l (Netherlands) B.V to Ba1 from Baa3. 

As per the agency, the downgrade reflects uncertainty as to whether or not the company's profitability, cash flow situation and debt levels can improve sustainably and materially, given the competitive dynamics in the Indian telco market. 

 

DEALS

IDBI may be re-christened as LIC IDBI Bank or LIC Bank.

 

The board of IDBI Bank Monday proposed change in the name of the lender to either LIC IDBI Bank or LIC Bank following a 51% takeover by LIC in a INR21,624cr deal last month. 

 

The Good Samaritan: The capital infusion by the insurer is expected to reduce IDBI's losses, helping it exit the Prompt Corrective Action (PCA) framework by the second quarter of the next fiscal.

 

US

Donald Trump to nominate David Malpass as the next World Bank President. Bond King Bill Gross to retire.

 

David R. Malpass who currently serves as the Under Secretary of the Treasury for International Affairs is well-known for his criticism of the World Bank, especially over its lending to China and also has been an integral part of the US China trade talks. Know more about Malpass here.

 

Bond King Retires: Bill Gross, co-founder of Pacific Investment Management Co (the assessment management company US Federal Reserve tapped into for help to implement its program of emergency bond purchases in the financial crisis in 2008) is set to retire from Janus Henderson Group Plc. 

 

Read more about bond market’s most influential investor here.

 

TECH

Alphabet shares sink on back of rising costs despite beating expectations in Q4 earnings. Slack files for direct listing. 
 

Alphabet reported a profit of $8.9bn in Q4. Revenue was up 22% at $39.3bn vs last year.  However, despite of beating analyst expectations, Google’s parent sank 3% in after-hours trading on back of rising costs. 
 

Expenses rose to $31bn in Q4 vs $24bn in the same quarter an year ago. 
 

Slack bypasses: After Spotify, Slack Technologies, the workplace instant-messaging and collaboration app backed by Softbank has filed confidential paperwork to go public through a direct listing, bypassing a traditional IPO.

 

Bonus: Sunday night’s Super Bowl reported record high streaming coverage but record low ratings. Read more here.

 

(Don't want to miss out on these End Of Week Wrap Ups? Subscribe Now to our No Nonsense Email Digest and get the day's Top 6 Business stories straight to your mailbox.)