Trump Declares National Emergency, Yes Bank Faces RBI's Wrath, WPI Drops to 10-Month Low et al.

US President Donald Trump declares the US-Mexico border a “national emergency”. Jet Airways plans to raise c. INR2,500cr through rights issue. WPI drops to 10-month low of 2.76% in January.

 

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

 

JET

Jet Airways plans to raise c. INR2,500cr through rights issue.
 

A Plan: Debt-laden Jet Airways to raise c. INR2,500cr through a rights issue.
 

What’s the Plan?: Lenders of Jet are expected to participate in the rights issue along with government-owned infrastructure fund National Infrastructure Investment Fund (NIIF), which is likely to buy a 19% stake in the airline for INR1,500cr. 
 

Rescue Plans: Other plans to rescue the beleaguered domestic airline which had a net debt of INR7,299cr as of end December, 2018 include:

 

  • Lenders to convert INR1,000cr of debt into equity through issuance of fresh shares
  • Etihad Airways, which currently holds 24% in the airline to infuse c. INR1,450cr
  • Chairman Naresh Goyal to funnel in INR550cr

 

Also, this: Jet is also likely to withdraw from some of its domestic and international routes in light of severe cash crunch.

 

YESBANK

Yes Bank faces RBI’s wrath for making its confidential report public. 
 

What You Need To Know: RBI has warned Yes Bank with regulatory action for making its observation of the bank’s Risk Assessment Report (RAR) public.
 

Backstory: Yes Bank, on Thursday, had informed stock exchanges of RBI's nil divergence report for FY18 following which the stock had soared c. 31%. 
 

RBI told Yes Bank that the RAR was intended to a be a “confidential” document and that disclosures made by the bank was viewed by the regulator as a “deliberate attempt to mislead”, considering the fact that the document also identified several other lapses and regulatory breaches in various areas of the bank’s functioning which were not revealed.
 

Counter-view: In the backdrop of the ongoing Yes Bank-RBI tussle, and the recent curtailing of terms of Yes Bank MD Rana Kapoor and Axis CEO Shikha Sharma, Jefferies, an American Multinational Independent Investment Bank and Financial Services Company noted that the Central Bank needs to be more transparent on decisions like these which have significant impact on minority shareholders.
 

Read RBI’s letter to Yes Bank here.

 

ECONOMY

WPI drops to 10-month low of 2.76% in January.
 

Wholesale price inflation dropped to a 10-month low of 2.76% in January vs 3.8% in December 2018 and 3.02% in January 2018 on back of softer prices of fuel and some food items.
 

View the WPI evolution for India here.

 

US

US President Donald Trump declares the US-Mexico border a “national emergency”.
 
What We Know: President Trump on Friday declared US-Mexico border a “national emergency”.

What Does This Mean: This will allow President Trump to circumvent Congress’s constitutional powers to control spending and divert federal funds towards his much debated border wall.

What Else: Trump also signed a bipartisan spending Bill that will keep the government funded through the fall and allocated $1.38bn for 55 miles of border barriers.

Unsatisfied with the amount set aside by lawmakers for barriers, Mr. Trump plans to draw c. $6.7bn from two separate military projects that were intended to stop the spread of drugs and build infrastructure. 
 

A Quasi-War: As per a report by Vox, the president is preparing the country for a fake war, with a quasi-official war chief in place.

 

DEALS

Amazon, Flipkart in talks to buy minority stake in online kids apparel brand Hopscotch. KKR-backed Avendus Capital to raise $1bn ESG fund.
 

Hopscotch: Amazon and Flipkart are reportedly in talks with Mumbai-based online kids fashion platform Hopscotch to buy a minority stake in the company. 
 

Also This: Hopscotch has appointed Barclays as the investment banker to raise up to $60m to fund its expansion plans.
 

Avendus Capital: Mumbai-based KKR-backed financial company, Avendus Capital expects to raise $1bn over two years with its environment, social and governance (ESG) fund.
 

Avendus expects around 70% of the money to come from overseas investors.

 

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