Is Jet's New Plan Another Kingfisher Redux?, US Unveils Criminal Charges Against Huawei, Malthouse Compromise Dismissed et al.

US unveils criminal charges against Huawei. EU dismisses Tory compromise plan as unworkable. Jet to seek approval from its shareholders to convert a portion of its debt into equity.

 

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

Is Jet's New Plan Another Kingfisher Redux? US Unveils Criminal Charges Against Huawei, Malthouse Compromise Dismissed et al.

 

HUAWEI

US unveils criminal charges against Huawei and its CFO Meng Wanzhou.

 
The What: The Justice Department on Monday unsealed two cases against Huawei and its CFO Meng Wanzhou that charge the telecom company with bank fraud, obstruction of justice and theft of technology.
 

Up Close: One indictment accuses Huawei of stealing trade secrets from a US business partner T-Mobile, while the other accuses it of violating US sanctions on Iran.

The news comes as US and China are set to resume trade negotiations on Wednesday.  
 

Huawei Pleads Innocent: The Chinese telecom giant however denied any wrong doing
 

Against this backdrop...: The Trump administration is reportedly considering an order that would ban wireless carriers from purchasing equipment from Chinese companies such as Huawei and ZTE. This could have rather severe ramifications on small carriers which often rely on cheap Huawei equipment which apparently cut their costs by millions. Ouch!

 

JET

Jet to seek approval from its shareholders to convert a portion of its debt into equity.

Rescue Mission: Jet to seek shareholder approval to convert existing debt into equity in a bid to salvage the beleaguered domestic airline. 

The Plan: In an extraordinary general meeting (EGM) scheduled on 21 February, Jet’s shareholders would vote on a proposal to raise its authorized share capital from INR200cr to INR2,200cr through a special resolution which would then allow Jet to issue fresh shares to lenders, and in turn bring in fresh investments. 
 

Upon authorization, SBI is likely to take an equity stake of at least 15% in the airline. 

Ghost of the Past: Read this rather interesting piece to know how Jet’s proposed plan may be another Kingfisher redux?

 

BANKING

PSBs to emerge more profitable and proactive, as per Finance Minister.
 

Batteries Charging: PSBs are set to become more profitable and proactive in the days to come, as per the Finance Minister. The comment follows the review meeting of PSB Heads with RBI Governor yesterday.

As per a Business Standard report, following yesterday’s review, banks have agreed to step up MSME lending, enhance efforts for financing under Pradhan Mantri Awas Yojana and improve recovery of bad loans.
 

Hedge Yourself: Ahead of the elections, RBI may release funds worth c. INR40,000cr to make up for Govt’s revenue shortfall. 

Backstory: Revenue from GST has for the most part fallen short of the INR1tr monthly target and income from asset sales have lagged estimates. The government may also widen its budget deficit target for the current fiscal year to 3.5% of GDP from 3.3%.

Free Fall: HDFC reported c. 60% YoY drop in profit at INR2,114cr for Q3 (don't worry the fall is supposedly not "like-for-like"). View press conference video tweet here.

 

Is Jet's New Plan Another Kingfisher Redux? US Unveils Criminal Charges Against Huawei, Malthouse Compromise Dismissed et al.

 

FINTECH

RBI directs P2P lenders to file quarterly reports on key metrics. 

Weather Check: In order to access the overall well-being of the sector, RBI has directed all registered peer-to-peer (P2P) lenders to furnish key metrics including details about borrowers, lenders, their financial profiles, total exposure of participants and the financial health of the platforms. 

P2P platforms currently undertake less than INR100cr of disbursals per annum whereas NBFCs distributed INR2L crore between March - September last year. Click here to know why the discrepancy. 

Brownie Points: As per a CB Insights report, venture capital-backed financial technology companies raised a record $39.57bn from investors globally in 2018, up 120% from the previous year. (Tweet This) Read more about it here.

 

BREXIT

EU dismisses Tory compromise plan as unworkable. 

The Malthouse Compromise: Senior Tory Brexit supporters including Jacob Rees-Mogg and Steve Baker on Monday proposed a plan to achieve a breakthrough in the Brexit deadlock which was met with skepticism, primarily from Brussels about Irish border. 

The proposal involves paying the £39bn EU divorce bill, redrafting the backstop arrangements over the Irish border and extending the implementation period until December 2021.
 

Bored of Brexit talks? Hold on, things just got interesting. Read this article to know what we mean. 

 

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