US and China close to finalising a trade deal. Tesla may unveil Model Y crossover later this month. Tata Sons to restructure over 1,000 subsidiaries into 10 verticals. Report by Grant Thornton India uncovers INR13,000cr of potentially irregular transactions at IL&FS.
Now to Today's Top Business News Stories in Our End Of Day Wrap Up:
Report by Grant Thornton India uncovers INR13,000cr of potentially irregular transactions at IL&FS. L&T Fin to challenge NCLAT’s order on IL&FS debt.
Conflicting Interests: As per a report by audit firm Grant Thornton India,transactions worth more than INR13,000cr at IL&FS could be linked to irregularities such as conflicts of interest, inadequate risk assessment and deviation from banking norms.
Doomed: As per the same report, IL&FS extended huge loans to certain entities even after internal risk assessment clearly showed that the borrowers were under financial stress.
The List Goes On...: Furthermore, multiple instances have been found wherein the Committee of Directors of IL&FS extended loans at a negative spread to borrowers facing liquidity issues. Click here to read how the financier ignored risk assessment reports while extending loans.
No Room: L&T Finance is set to move the SC against an NCLAT ruling which allowed INR16,000cr of IL&FS debt to be categorised as ‘amber’, arguing that the contract has no room to qualify the stressed financier’s outstanding loans based on solvency.
L&T Finance has INR1,800cr of debt exposure to six special purpose vehicles of IL&FS.
Amber...What's That?: As per NCLAT, companies that are able to pay all obligations have been categorised as green, companies only able to meet operational payments and senior secured debt obligations are categorised as amber and those that are unable to meet obligations to even senior secured financial creditors are categorised as red.
US and China close to finalising a trade deal.
A Truce: US and China may finally be inching closer towards finalizing a trade deal that could lift most or all US tariffs on Chinese good worth $200bn.
Barter Trade: In return, China is offering to lower tariffs on US farm, chemical, auto and other products and ramp up purchases of American goods by $1.2tr over the next six years. China would also buy $18bn in natural gas from Houston.
However, it remains to be seen whether the tariffs would be lifted immediately or over a period of time that would allow the US to monitor whether China is meeting its obligations.
A formal agreement could be reached at a summit between US President Trump and Chinese President Xi Jinping around March 27.
Tesla may unveil Model Y crossover later this month.
Elon Musk Just Tweeted...: Elon Musk, through a series of tweets on Sunday, announced that Tesla plans to unveil the electric Model Y crossover at an event in Los Angeles later this month.
Musk tweeted that Model Y, being an SUV, is about 10% bigger than Model 3, and will cost about 10% more with slightly less range for the same battery.
Brownie Point: Musk's tweets on Twitter have quadrupled recently. Read this rather interesting article to see how Elon Musk may not be the narcissist Tesla needs right now.
Tata Sons to restructure over 1,000 subsidiaries into 10 verticals.
Building Synergies: As per this report, Tata Sons - the holding company of Tata Group, has restructured the conglomerate into 10 verticals under consumer, trading and investments categories in a bid to synergise operations and cut costs.
The Group has already merged its hotels and aviation businesses — Indian Hotels and joint ventures Vistara and AirAsia — under the travel and tourism vertical.
Read Chairman N Chandrasekaran’s plan to shrink over 1,000-odd subsidiaries owned by the Tata Group’s operating companies here.
The Plan: Immediate priorities in the plan include stabilising the loss-making Jaguar Land Rover unit, figuring out a way forward for relatively weaker businesses such as aviation and infrastructure.
Key focus for the Group shall remain scaling up its high-growth sectors such as consumer and retail. The Group has also applied to register a new company to launch its ecommerce business. More on Tata’s retail-focused growth strategy here.
ShareChat in talks to raise $200m from Tencent and others. Acquires video-sharing app Clip.
Firepower: Bengaluru-based social media startup, ShareChat is in talks with Tencent Holdings and others to raise c. $200m.
The regional language social media platform is seeking a valuation of $600-700m in the latest round of funding.
The proceeds from the funding round would help ShareChat take on its Chinese rivals Helo and TikTok.
ShareChat allows users to create, discover, and share content with each other. It also has features like anonymous chat, direct messaging, original video content under ShareChat Talkies. The company has till date raised $122m.
In Other News: Mohalla Tech, the parent company of ShareChat has acquired Transversal Tech-owned video sharing app Clip in an all cash deal in a bid to take on its rivals, including ByteDance.
Clip enables its over 10 million active users to chat, create and share videos selfies, and 60-second video clips. In August 2018, Clip had also acquired a vernacular crowdsourced discovery platform Clorik for an undisclosed amount.
Post-acquisition, existing Clip users will be integrated into ShareChat.
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