ET:Deutsche Bank-led group a step closer to Jindal India deal

16 January 2020: A Deutsche Bank-led consortium’s efforts to buy out the debt of a power plant operator in eastern India have advanced, after no rival bidder emerged.

The struggling utility is Jindal India Thermal Power Ltd., one of a string of power plants being put up for sale by banks stuck with their defaulting debt.

The sector has been hit hard by oversupply in recent years, a consequence of a costly push to bridge India’s once chronic power deficit and expand reach to under-supplied rural areas. Power generators form a significant chunk of India’s $130 billion bad loan pile.

The consortium offered 24 billion rupees ($339 million) in cash to settle the company’s 76 billion rupee debt including interest due as of end March, which is currently being restructured, said the people, asking not to be identified citing confidentiality. The unsolicited offer was opened up to competing bids in an auction but no rival emerged by the deadline last week, the people said.

Success for the Deutsche Bank group deal could help preserve the 33.98% equity stake that the BC Jindal Group held as of March 31, 2019.

BC Jindal Group company shares jumped. Jindal Photo Ltd. rose as much 12.2%, the most in seven months. Jindal Poly Films Ltd. shares were up as much as 20.3%, the most in over six years.

The offer would effectively mean that creditors, led by Punjab National Bank, would recover a fraction of their outstanding debt holdings, the people said. Typically, if lenders do not agree with a debt-recast plan, they have the option of taking the company to bankruptcy.

A spokesman for Deutsche Bank declined to comment and a representative for Punjab National Bank didn’t immediately respond to an email seeking comment.

The Economic Times reported

BBG: Deutsche Bank-Led Group a Step Closer to Jindal India Deal

16 January 2020: A Deutsche Bank-led consortium’s efforts to buy out the debt of a power plant operator in eastern India have advanced, after no rival bidder emerged.

The struggling utility is Jindal India Thermal Power Ltd., one of a string of power plants being put up for sale by banks stuck with their defaulting debt.

The sector has been hit hard by oversupply in recent years, a consequence of a costly push to bridge India’s once chronic power deficit and expand reach to under-supplied rural areas. Power generators form a significant chunk of India’s $130 billion bad loan pile.

The consortium offered 24 billion rupees ($339 million) in cash to settle the company’s 76 billion rupee debt including interest due as of end March, which is currently being restructured, said the people, asking not to be identified citing confidentiality. The unsolicited offer was opened up to competing bids in an auction but no rival emerged by the deadline last week, the people said.

Success for the Deutsche Bank group deal could help preserve the 33.98% equity stake that the BC Jindal Group held as of March 31, 2019.

The offer would effectively mean that creditors, led by Punjab National Bank, would recover a fraction of their outstanding debt holdings, the people said. Typically, if lenders do not agree with a debt-recast plan, they have the option of taking the company to bankruptcy.

A spokesman for Deutsche Bank declined to comment and a representative for Punjab National Bank didn’t immediately respond to an email seeking comment.

Source: ©2020 Bloomberg L.P.

ET: Deutsche Bank & SC Lowy bid for Central Bank loan auction

7 March 2019: Distressed asset funds of Deutsche Bank and Hong Kong’s SC Lowy have bid for the Essar Steel and Bhushan Power & Steel loan accounts put up for sale by Central Bank of India, said two people familiar with the matter. 

“Both Deutsche Bank and SC Lowy have submitted expressions of interest on Tuesday for the two accounts,” said one of the persons cited above. Those are unbinding bids. 

Central Bank of India and SC Lowy didn’t respond to ET’s email queries. Deutsche declined to comment. 

Central Bank has unpaid dues of Rs 423.61 crore for the Essar Steel loan, and its exposure is Rs 1,550 crore to Bhushan Power & Steel. Reserve prices were pegged, respectively, at Rs 415 crore and Rs 709.50 crore, below which no unbinding bid would be accepted. 

The state-owned bank last Saturday put sticky loans worth Rs 3,300 crore up for sale as it aims to improve its fourth-quarter earnings. 

Such asset sales are aimed at cleaning the bank’s books and reduce bad loan provisions so that the lender could turn profitable at least in the Jan-march quarter. 

The pool of bad loans also included Alok Industries and Bombay Rayon Fashions. 

The bank would evaluate those initial bids and then follow them up with the “Swiss Challenge Method”. This gives an opportunity to other bidders to match or surpass the highest bid, which is achieved through the e-auction process. 

While these loan accounts are going through bankruptcy proceedings at various benches of the National Company Law Tribunal (NCLT), the sluggish progress in resolutions has prompted lenders to put those loans on the block before the close of the financial year. 

Central Bank MD & CEO Pallav Mahapatra had said last week that the lender expects a write-back. “We have made adequate provisions for these loans and have already received binding offers…Whatever bids we receive above the offers we have will be written back in our accounts for the quarter,” Mahapatra had then said. 

A few weeks earlier, SBI had put Essar Steel loans up for sale. Only Bank of America ML showed interest. The lender is believed to have decided to shelve the process in the absence of more than one bid.

The Economic Times reported

ET: Kotak Investment and Karvy put in bids for Ricoh India

  • 13 February 2019: Kotak Investment Advisors and Karvy are among multiple investors who have put in bids or Ricoh India, which is facing insolvency. Minority shareholders are also looking to buy the company, sources told ETNOW.
  • The committee of creditors (CoC) led by Deutsche Bank is likely to meet soon to decide on the bids.
  • The bank has more than Rs 130 crore gurantee to the company.
  • Ricoh India, which went into voluntary insolvency last year, manufactures printers and scanners.
  • The stock of the company remains suspended by the BSE.
  • Ricoh Japan is the largest creditor of the company and holds 74 per cent stake in the India unit.
  • The Economic Times reported

    WEEKEND EQUITY UPDATE: 18 AUGUST 2012 – 19 AUGUST 2012

    ASIA

    Prices of new homes in China rose in 49 of the 70 cities in July over the previous month’s data. The cutting of interest rates, improved sentiment and incentives for new home buyers weighed in on the data. Prices declined in nine cities and were unchanged in twelve. (Bloomberg)

    INDIA

    FII’s have infused a total of USD 11 b in Indian equities in 2012 on a YTD basis. USD 1 b alone came in the month of August as the government could put in a fresh round of initiatives and reforms to stimulate the slowing economy. (Economic Times)

    The combined market capitalization (m-cap) of top ten co.’s rose by INR 17,658 cr for the week ended 17 August. Reliance Industries contributed the most with gains of INR 10,696 cr followed by ONGC, Coal India, Infosys while TCS, HDFC Bank, ITC and NTPC saw their m-caps decline over the week. (Economic Times)

    ONGC Videsh Ltd – OVL, the overseas arm of ONGC, is planning to invest in oil fields in Russia, mostly in the Arctic Ocean with joint-ventures. The co. is to form JVs with ExxonMobil and ENI. (Business Standard)

    Tata Steel – Co.’s Ferro Alloys and Mineral Division to add 1.1 lac tons of ferro chrome and silico manages production capacity by 2012 at its Odisha plants.  (Financial Express)

    Reliance Power – Co. refuted allegations made by India’s Comptroller and Auditor General (CAG) that the firm benefitted from the auctions of the coal mines. The co. is alleged to have made benefits of INR 29,000 cr by diverting its surplus coal output for its operations in Sasan, MP, India. The co, has stated that the allegations are erroneous and the co. did not receive any undue benefits. (Economic Times)

    Lanco Infratech Limited – Co.’s management plans to increase the coal out to 5.5m tons per annum but March 2014 at its Griffin coal mines located in Western Australia. The Griffin coal mines are expected to hold total reserves over 1.1b tons and co. is expected to secure various clearances by the end of the current financial year. (The Hindu Business Line)

    United Bank of India – Co. expects to recover INR 400-500cr in cash in this financial year, as gears up to fasten its recovery process, according to co.’s Executive Director Deepak Narang. (Business Standard/ PTI)

    EUROPE

    According to a German weekly magazine report, ECB is considering setting interest rate thresholds for any purchases of struggling euro zone country’s bonds so that it would buy such bonds if their interest rates exceeded a certain premium over German bonds. In other news the weekly magazine also reported that, Greece will likely need to cut additional EUR 2.5b in spending over the next two years to meet the requirement for financial aid. Der Spiegel cites an interim report by the troika. (Economic Times/Reuters)

    Spain’s Economy Minister Luis de Guindos stated that the bank bailout fund would take care of restructuring and recapitalizing the banks. The funds received from the EU will be put up for approval by the Cabinet by 24 August. The non-performing assets of the bad banks will be transferred into the FROB fund to access loans. (Bloomberg)

    Germany’s Finance Minister Wolfgang Schaeuble dismissed talks of providing a fresh round of funding to Greece even though the state of country remains in a difficult situation. The nation has received two rounds of funding worth EUR 240 b since the onset of the crisis. With GDP expected to contract at a slower pace in the next two years on the funding, Germany is aware of the additional constraints on the EU and other nations if the funding were to continue. (Bloomberg)

    The U.S Justice Department have started investigating Deutsche Bank to understand its possible role in the transactions linked with Iran, Sudan and other nations currently facing international sanctions. (Reuters)

    NORTH AMERICA

    Rating agencies Moody’s and S&P are to face lawsuits filed by investors for falsely assigning inflated ratings to debt backed by subprime mortgages. Morgan Stanley sold the notes during the 2008 crisis incl. The Abu Dhabi Commercial Bank. (Bloomberg)

    Caterpillar – Heavy equipment manufacturer stated that the uncertain outlook of the global economy was worse than the state during the 2008 crisis. Lower demand in the construction and infra sector on account of the slowdown has affected the co in terms of lower orders. (Financial Times)

     

     

     

     

     

     

    EQUITY UPDATE: 1 AUGUST 2012

    ASIA

    China’s steel factories saw a 96 percent decline in profits for the 1HY12 period on economic slowdown lowering demand. The China Iron and Steel Association revealed that profits came in at RMB 2.39 b (GBP 376 m) on rising costs and lower demand. (Financial Times)

    INDIA

    FIIs saw net buying of INR 879.97 cr in trade today on a provisional basis with gross purchases of INR 2940.75 cr and gross sales of INR 2060.79 cr. DIIs became net sellers of INR 493.48 cr on gross purchases of INR 827.81 cr and gross sales of INR 1,321.29 cr. (Business Standard)

    The Reserve Bank of India relaxed foreign exchange retention rules, by allowing corporate and exporters to keep entire foreign exchange earnings in respective currencies for a limited period versus a existing provision of 50 per cent conversion to Indian rupee. In other news, RBI lowered India’s growth forecast for the current financial year to 6.5 per cent versus previous estimate of 7.5 per cent. (MoneyControl/BBC)

    Reliance Power – Co. is set to utilize USD 800 m as four international banks sanctioned its loan for its power project in Sasan, India. (Business Standard)

    Maruti Suzuki – Rating agency ICRA will scrutinize around 14 auto parts suppliers to Maruti Suzuki India on account of the ongoings at the co.’s Manesar plant. Violence at its factory in Manesar has severely affected the co.’s production, thus affecting its suppliers. (Economic Times)

    Tata Steel – Co. is stated to have lowered its operating capacity on account of power outages in the northern region of India. (Economic Times)

    Bharti Airtel – Co. is exploring options of issuing new shares to raise funds, citing two people aware of the situation. (Business Standard/Reuters)

    Tata Motors – Jaguar Land Rover is recalling 2,229 Freelander 2 SUV’s in China due to a potential perforation in power steering hose. (The Hindu Business Line)

    Power Co.’s – According to the rating agency Fitch, the outlook on domestic power sector was stable, due to some progress in availability in fuel and a possibility of debt restructuring of SEBs. In related news Coal India agreed to supply at least 80 per cent of coal requirements for new power projects.  (Financial Express/Money Control)

    INDIAN EARNINGS

    IDBI Bank – Co. reported 1Q12-13 net profit at INR 427.34cr vs. previous INR 335.10cr in 1Q11-12. Total income at INR 6,786.81cr vs. previous 6,059.83cr. (The Hindu Business Line)

    Cipla – Co.reported 1Q12-13 net profit at INR 400.76cr vs. previous 1Q11-12 net profit at INR 253.34cr. Net sales at INR 1,917.34cr vs. previous INR 1,550.33cr. (Financial Exprees)

    Petronet LNG – Co. reported 1Q12-13 net profit at INR 270.85cr vs. previous INR 256.71cr. Turnover up 52 per cent to INR 7,030.41cr. (The Hindu Business Line/PTI)

    Bhushan Steel – Co. reported 1Q12-13 net profit at INR 205.97cr vs. previous INR 209.96cr. Net sales at INR 2747.34cr vs. previous INR 2165.85cr. (Business Standard/PTI)

    Titan Group – Co. reported 1Q12-13 net profit at INR 156.09cr vs. previous INR 143.51cr. Net income at INR 2,205.81cr vs. previous INR 2020.60cr. (Business Standard/PTI)

    Karur Vysya Bank – Co. reported 1Q12-13 net profit at INR 145.95cr vs. previous INR 116.70cr. Total income at INR 1,109.81cr vs. previous INR 768.72cr. (Business Standard)

    Jaiprakash Associates – Co. reported 1Q12-13 net profit at INR 138.84cr vs. previous net profit at INR 184.06cr. Net sales at INR 2,963.57cr vs. previous INR 2,902.30cr. (Business Standard/PTI)

    EID Parry – Co. reported 1Q12-13 net profit at INR 22.47cr vs. previous net loss of INR 7.18cr. Total income at INR 578cr vs. previous INR 398.49cr. (Financial Express)

    GTL – Co. reported 1Q12-13 net loss of INR 203.95cr vs. previous 1Q11-12 net profit of INR 12.93cr. Revenue at INR 615.98cr vs. previous INR 820.62cr. (The Hindu Business Line)

    Man Industries – Co. reported 1Q12-13 net profit at INR 26cr vs. previous INR 24cr in 1Q11-12. Net Sales at INR 326cr vs. previous INR 466cr. (The Hindu Business Line)

    Shoopers Stop – Co. reported 1Q12-13 net profit at INR 50 lac vs. previous INR 11.7cr. Gross retail revenue at INR 516.9cr vs. previous INR 448.5cr. (Business Standard/PTI)

    Muthoot Capital Services – Co. reported 1Q12-13 net profit at INR 4.93cr vs. previous INR 2.35cr. Revenue at INR 22.17cr vs. previous INR 12.23cr. (Business Standard/PTI)

    EUROPE

    Italian PM Mario Monti, stated that the timely assistance from the ECB and the bailout funds could slowly help the country return to stability, ahead of his tour to Helsinki, Madrid and Paris this week. Italy is faced by rising government bond yields and surveys indicate that around more than half of the public believe that Monti would not be able to achieve the target of lowering the country’s fiscal deficit. (Financial Times)

    ECB’s plans of staging a bailout program for troubled European economies, hit a resistance. As according to a Bundesbank source, most troubled European economies faced a fiscal problems and which should be addressed using fiscal instruments. (CNBC)

    EU unemployment rate for the 17 country block rose to 11.2 percent or 17.8 m unemployed people in July vs. 10.2 percent in June 2011. Youth unemployment, the under-25 age group, rose to 22.4 percent. The results were affected mostly by Spain and Greece where the rates were 24.8 percent and 22.5 percent respectively. Germany, was more stable as the rate declined to 5.4 percent vs 5.5 percent previously. The data would weigh on the ECB meet this Thursday when it decides on its monetary policy and interest rates. (Financial Times)

    Euro zone inflation for June was stubbornly stuck at 2.4 percent in July, similar for the last three months. The data, combined with the rising unemployment rates, could weigh in on the ECB meet this Thursday. (Financial Times)

    Italian unemployment rate at 10.8 per cent in June versus 10.6 per cent in May. (Economic Times)

    Moody’s lowered U.K’s GDP forecast to 0.4 percent for FY12 and 1.8 percent growth in FY13. However, the agency did not alter its AAA rating and its outlook on it. The agency stated that policies such as asset purchases, the government’s ability to reduce debt without hampering growth all prompted for the forecast. (Financial Times)

    According to Fathom consulting, a Eurozone break-up could force UK into a deep recession, force governments to nationalise banks and trigger a GBP 1tr of QE. (Telegraph UK)

    Deutsche Bank – Co. admitted that some of their staff was involved in LIBOR rate-rigging scandal. However an internal inquiry has cleared senior management. In other news, co. to cut 1,900 staff, mostly outside Germany, due to the European economic downturn. (BBC)

    Tesco – Standard and Poor’s cut co.’s outlook to ‘negative’, warned on weakening profits. The rating agency has suggested that co. should sell off businesses. (Telegraph UK)

    EUROPEAN EARNINGS

    BBVA – Spanish bank saw its 2Q12 profit decline to EUR 505 m vs expectations of EUR 700 m. Profits declined 58 percent y/y on its property loan delinquencies. Net interest income rose 16 percent to EUR 3.74 b. The co. set aside EUR 1.43 b of the reqd. EUR 4.6 b to comply with Spanish regulatory laws. The bank’s Latin American division saw revenues rise to EUR 1.02 b vs EUR 774 m on stronger demand for loans and rise in deposits. (Financial Times)

    British Petroleum plc – Co. saw its 2Q12 profits decline to USD 3.7 b vs USD 5.7 b a year ago, a 35 percent decline on lower production, higher writedowns on its shale gas unit and a tax charge in Russia. The numbers came in below estimates as lower crude oil and nat gas prices weighed on its earnings. The charges on its Deepwater rig oil spill could still weigh on profitability as it appeased shareholders with its strategy of delivering a 50 percent increase in cash flows by 2014. The co. was also affected by the sale of its Russian JV with TNK where income was lower by USD 700 m on a y/y basis. Lower output also hampered its operations. (Financial Times)

    NORTH AMERICA

    US consumer confidence for July at 65.9 versus estimated 61.5 versus previous 62.7 ; revised from 62. (FXStreet)

    NORTH AMERICAN EARNINGS

    Pfizer – Pharma co. saw its profits rise to USD 3.25 b, a 25 percent y/y rise on cost cutting vs USD 2.61 b previously. EPS came in at 43 cents vs 33 cents a year ago. EPS excl costs came in at 62 cents vs expectations of 54 cents. Overheads declined 17 percent with R&D expenses lowered by 24 percent. Revenues declined 9 percent to USD 15.1 b, declining 9 percent y/y on a 53 percent fall in the sale of Lipitor, its anti cholesterol drug, whose patent expired. The co. plans to sell its nutrition and animal health units to raise USD 3.0 b through 20 percent divestment to offset declining revenues of Lipitor. It reaffirmed its FY2012 earnings at USD 2.14 – 2.24 a share. (Financial Times)

     

     

    EUROPEAN EARNINGS: DEUTSCHE BANK; KPN

    EUROPEAN EARNINGS

    Deutsche Bank – Co. reported preliminary 2Q12 profits at EUR 700 m (USD 844 m) vs EUR 1.2 b a year ago. Expectations came in at EUR 999 m, as the bank missed its target by some distance. Pretax profit declined to EUR 1 b vs expectations of EUR 1.5 b. The bank plans to reduce its risk exposure to meet Basel III rules by 2013. Core Tier I capital ratio that is targeted by the bank is at 7.2 percent. (Bloomberg)

    KPN – Dutch telecom firm posted lower than expected results on declining revenues in the Netherlands offsetting rising sales in Germany and Belgium. Revenues for 2Q12 period came in at EUR 3.19 b, a fall of over 3 percent on a y/y basis. EBITDA declined 13 percent to EUR 1.14 b. Profits also declined 24 percent to EUR 315 m. Co. reduced its dividend for the year from EUR 0.85 a share to EUR 0.35 a share. EPS declined 18 percent to EUR 0.23 a share. (Financial Times)

    DAILY MARKET REPORT – 19 JULY 2012

    The Indian indices closed the day in the positive territory on the back of strong gobal cues. The Sensex ended the day at 17278.85 points, up 93.84 points or 0.55 percent.  The Sensex touched a high of 17318.93 and a low of 17244.76 points in intraday trade today.The Nifty closed 26.40 points or 0.51 percent higher at 5242.70 points with highs of 5257.75 and a low of 5233.15 points.

    On the sectoral indices front on the BSE, the Midcap Index was up 0.14 percent and the Smallcap Index also gained 0.39 percent. The IT Index rose 1.62 percent, the Oil & Gas Index returned 1.21 percent higher, the Power Index was up 0.94 percent and the Metal Index gained 0.91 percent. However the Auto Index was down 0.39 percent.

    On the global front, Asia closed higher on favourable results of co’s the previous night. Hang Seng and Kospi gained over 1.50 percent each on average while the rest, China’s stock exchange and Japan’s Nikkei gained 0.7 percent on average. European indices also opened the day’s trade at higher levels on stronger earnings.

    On other news from around the globe, Spain’s bond auctions saw yields rise again. Deutsche Bank planned to slash 1000 jobs from its investment banking unit. Novartis filed its results and its EPS exceeded expectations. UK’s Retail sales for June registered a rise, but came in below expectations.

    On the stock front, oil marketing co’s gained after a report by UBS stated that diesel prices would have to be raised by the government to avoid a further credit rating downgrade. Infosys, which was panned on its dismal results, saw buying activity as it gained 3 percent while TCS inched higher marginally by 0.4 percent. BHEL gained over 2 percent on news of the govt. of India to propose a 21 percent duty on equipment imported for power generation. L&T, its rival, also marginally gained today. Nomura upgraded Reliance Industries to buy from neutral on attractive valuations which will help it post better earnings.  Maruti dominated news for all the wrong reasons as union workers clashed with the management resulting in stoppages at its Manesar plant. The stock declined 9 percent.

    Crisil India reported its numbers and so did Kotak Mahindra Bank and L&T Finance Holdings.

    On the currency front, the Rupee traded at an intraday high of 55.14/16 to the Dollar.

    Commodities traded higher during the session with WTI at USD 91.23 up 1.51% and Brent trading at USD 107.07 up 1.82%. On the weather front, severe thunderstorm expected over Pittsburg, Columbus and Louisville.

    Kindly check the Market Summary tab for further information on stock-related data.

    (CNBC, Economic Times and Moneycontrol)