FE: Debt Rejigging: Jain Irrigation wants easier payment terms

3 June 2020: Jain Irrigation has submitted a proposal to lenders asking they restructure Rs 4,000 crore of loans, sources close to development told FE. The rejigging of debt is expected to be such that the company is allowed to repay the loans over a longer period. The plan has been shared with the rating agencies and State Bank of India (SBI) is likely to convene a meeting of lenders soon once the feedback from the agencies is in.

Lenders, who had earlier signed an Inter Creditor Agreement (ICA), are looking to come up with an out-of-court resolution plan for Jain Irrigation since initiating insolvency proceedings under the IBC is not an option.

On Wednesday, the Cabinet decided to suspend insolvency proceedings under IBC following an announcement made by the finance minister in March.

While some lenders had increased provisions, against the exposure, to 15% in the December quarter, when the account slipped to become a non-performing asset (NPA), others are expected to follow suit in the March quarter, in keeping with the income recognition and asset classification (IRAC) norms.

S&P has downgraded Jain Irrigation Systems to ‘D’ (default grade) for missing interest payments due on February 1, 2020. S&P also said the resolution plan might take longer than expected and the company’s operations will continue to suffer due to a lack of sufficient liquidity to manage its debt servicing and working capital requirements. In October, 2019, Care ratings had downgraded Jain Irrigation to ‘D’, due to a delay in servicing its debt.

Source: Financial Express

EQUITY UPDATE: 17 AUGUST 2012

ASIA

Japan would soon overtake China to become the biggest creditor to the U.S as it purchased USD 10.4 b of Treasuries in June to take its total to USD 61.3 b. total holdings in U.S Treasuries came in at USD 1.193 t vs China’s USD 1.164 t. (Bloomberg)

South Korea’s jobless rate declined marginally to 3.1 percent in July vs 3.2 percent in June. Expectations came in at 3.3 percent. The decline was contributed by rise in the no. of self-employed workers and rise in service-sector jobs. (Reuters)

China National Gold Group Corp – Precious metals mining firm is in early talks to purchase Barrick Gold Corp’s 73.9 percent stake in mining firm African Barrick Gold plc. (Bloomberg)

China Mobile – Co. reported lower than expected 2Q12 profit at RMB 54.40 b (USD 5.4 b) vs RMB 34.42 b a year ago, based on its 1HY12 earnings data. The co. saw its sales rise to RMB 139.1 b vs USD 131.9 b in the quarter a year ago. Estimates came in at RMB 140.5 b. The co. saw higher costs on attracting new customers amid slowdown in the economy. (Bloomberg)

INDIA

DII’s made gross purchases of INR 1,259.33cr and sales of INR 1,034.03cr. FII’s made gross purchases of INR 2,447.90cr and sales of totaling at INR 2,352.89cr. (Business Standard)

Indian oil marketing co.’s (OMCs) are faced with losses of INR 450 cr a day on rising prices of crude oil in the international markets and the fall of the rupee. Since the OMCs purchase oil, diesel and cooking gas at international rates and sell them at government-controlled rates, the difference in prices would see losses widen if it does not receive timely subsidies from the government. (Business Standard)

Maruti Suzuki – Co. to restart its Manesar plant on 21 August and said it is planning to remove 500 contract workers over their alleged involvement in the violence.  Co. to make 150 cars a day at its Manesar plant. (Times of India/PTI/Reuters/Yahoo)

Bank of Baroda – Nomura downgraded co. to a ‘reduce’ from ‘neutral; price target cut to INR 590 from INR 628. According to Nomura co.’s asset quality will continue to impacts its earnings growth over the next several quarters, and increased its delinquency forecast for fiscal 2013 and its loan loss provisioning forecast for fiscal 2012. Also expected change in top management later in 2012 reiterate the asset quality risk to earnings. (Economic Times/Reuters)

Punjab National Bank – Nomura downgraded co. to a ‘reduce’ from ‘neutral; price target cut to INR 680 from INR 719. Nomura expected loan delinquency to continue to increase over the next few quarters. (Economic Times/Reuters)

Wockhardt – Co. got US FDA approval to market Clopidogrel bi-sulfate tablets, used to help reduce risk of heart attack or stroke, in 75 mg strength. Co. also got a tentative nod for the 300 mg strength tablets. (MoneyControl)

Tata Motors – Co.’s July global sales at 101,605 units, up 21 per cent. (The Hindu Business Line)

Gitanjali Group – Co. acquired 15.3 per cent stake in Japanese firm Verite for INR 25cr. (Indian Express)

INDIAN EARNINGS

Nalco – Co. reported 1Q12-13 net profit at INR 223cr vs. previous 1Q11-12 net profit at INR 377cr. Net sales at INR 1,718cr vs. previous INR 1,733cr. (Yahoo/IANS)

RINL – Co. reported 1Q12-13 net profit at INR 150cr vs. previous 1Q11-12 net profit at INR 74cr. Turnover at INR 2,976cr vs. previous INR 2,582cr. (Financial Express)

ABG Shipyard – Co. reported its 1Q12-13 net profit at INR 41.31cr vs. previous 1Q11-12 net profit at INR 40.06cr. (Business Standard)

Jain Irrigation – Co. reported 1Q12-13 net loss of INR 16cr vs. previous 1Q11-12 net profit at INR 82cr. Sales at INR 865cr vs. previous INR 951cr. (The Hindu Business Line)

EUROPE

Spain’s exports touched EUR 18.9 b (USD 23.2 b), exceeding imports by EUR 1.2 b for the period of June 2012. The county still faces risk of declining exports as demand for its goods mainly comes in from Europe, which is still in recession. Besides, the exporters are not receiving adequate financing and incentives from the government, which itself is reeling from severe austerity cuts. Imports have declined to EUR 21.6 b in June vs EUR 21.4 b two years ago. The marginal rise is due to lack of domestic demand, which can be a worrying factor. (Reuters)

According to the Bank of England policy maker Martin Weale, the British economy was mired in stagnation rather than recession. The European debt crisis was the biggest source of uncertainty. The BOE policy maker was of the opinion that, squeeze on household spending through rising fuel prices was coming to an end. (Economic Times/Reuters)

ArcelorMittal – Steel mining giant is planning to hold discussions with the Indian government to expedite the procurement of a mining lease for its proposed INR 50,000 cr plant in Jharkhand, India. (Economic Times)

Airbus – Co. saw a loss of 10 A-380 aircrafts amounting to USD 3.8 b as Hong Kong airlines wound up its first class business category flight services. (Financial Times)

NORTH AMERICA

Construction of New homes in the U.S declined 1.1 percent to 746,000 vs June’s 754,000, falling below estimates of 756,000. The decline was offset by a rise in building permits to 812,000, its highest since 2008. The mixed data of low mortgage rates, decline in foreclosures, rising hiring and access to cheaper credit could show signs of an improvement in the property markets in the 2HY12 period. Construction of single-family homes declined 6.5 percent to 502,000 and multi-family home construction rose to 244,000, a five month high in 2012. (Bloomberg)

U.S initial jobless claims rose marginally by 2000 applicants to 366,000 for week ended 11 August vs prv week’s revised 364,000 vs exp rise to 365,000. The less volatile four week moving average declined to 363,750, a sign that labor markets picked up in July after the temporary layoffs caused by the auto plant maintenance activity. Unemployment rate remained at 8.3 percent. People on continuing jobless benefits declined by 31,000 to 3.31 m for week ended 4 August. (Bloomberg)

Ford Motors – Co.’s EU sales down 12.3 per cent at 83,100 units from a year earlier. YTD sales down at 10.6 per cent. Industry sales down 7.1 per cent through July, the lowest since 1995. (Boston.com/AP)

NORTH AMERICAN EARNINGS

Walmart – Retailer’s rising profits were reduced on unfavourable movements in the exchange rates which affected its revenues from international operations. Profits came in at USD 4 b, a y/y rise of 5.7 percent. EPS came in at USD 1.18 a share, marginally exceeding expectations. Revenues came in at USD 114.3 b vs exp USD 115.8 b. U.S like-for-like sales rose 2.2 percent on a y/y basis. Revenues from its global operations rose 4.5 percent to USD 113.5 b. The co. plans to expand its operations in markets such as Mexico, China and Brazil. (Financial Times)

7 banking firms have been issued subpoenas from U.S State prosecutors in the context of rigging the Libor rates. Banks summoned will be HSBC, Deutsche Bank, Citigroup, J P Morgan, UBS, RBS and Barclays. (Financial Times)

Brazil will implement a Brazilian Rias (BRL) 133 b (USD 66 b) worth of stimulus measures to increase investments in the nation to prop up the economy. The government plans to grant concessional opportunities on rail and roadways construction. Slowdown in the economy combines with shortage of skilled labour raised inflation and contributed to a slowdown in the economy. (Financial Times)

Cisco – Networking equipment manufacturer saw its profits and revenues rise that it raised its dividend and full year earnings estimate. Revenues rose to USD 11.7 b, exceeded estimates of USD 11.6 b. EPS came in at 47 cents vs exp. 45 cents, all on a pro forma basis. Cost cuts and prudent utilization of its resources saw the co. raise its FY12 forecasts at USD 46 b and EPS to 1.85 a share. The co. raised its dividend for the next quarter to 14 cents, a 75 percent increase. (Financial Times)

 

 

 

 

WEEKEND EQUITY COVERAGE – MAY 19 TO MAY 20

GLOBAL

The leaders at the G8 Summit in Washington unanimously agreed to strengthen their respective economies but were undecided on the policies each country would undertake to achieve their outcome. Leaders encountered two different opinions related to additional stimulus or undertaking of further austerity measures. The problems of the euro zone were discussed and German Chancellor Angela Merkel differed on the imposition of additional fiscal policy measures. The summit also focused on tackling the high oil prices and decided to call upon the International Energy Agency (IEA) to release additional reserves in the market to calm higher prices. (Financial Times)

ASIA

Samsung Electronics – Co.’s mobile division Chief J K Shin stated that it would look to resolve its differences on patents with Apple Inc. The co. would also look at cross-licensing options as part of its negotiations. (Reuters)

INDIA

Even with the government anti-avoidance rule (GAAR) tax proposals, foreign institutional investors could still be subject to another taxation framework of which the proposals were part of the Finance Bill. Capital gains on a direct or indirect transfer of shares or interest in a non-Indian co. with assets located in India, would also be subject to taxation norms. The norm could affect FII’s investments in India and also affect global mergers & acquisition (M&A) activity involving Indian firms. FII’s put forward their opinion that although capital gains in India should be subject to tax as per the country, repatriation of gains to its investors through redemption of such gains should not come under the purview of tax. (Economic Times)

The Deputy Chairman of Planning Commission Montek Singh, sees achieving 7.5 per cent growth difficult due to falling rupee and high inflation. However the Indian finance ministry was for a 7.5 per cent growth this year. (Financial Express)

Weaker markets saw a decline of INR 27,649 cr in the market capitalization of the top-10 co.s in the Sensex 30 index for week ended 18th May 2012. Coal India suffered the highest loss in market cap of INR 7138 cr for the week. ONGC followed next with losses of INR 5048 cr. (Economic Times)

HPCL Ltd – Oil co. HPCL is to expand its output at its Vizag oil refinery to 15 m tonnes by 2015-16. The co. would invest approximately INR 10000 cr in the project expected to commence in 2013. (Economic Times)

NTPC & Coal India – According to Coal India Ltd. (CIL) Chairman and MD S Narsingh Rao, NTPC would continue to receive its supply of coal inspite of NTPC not signing the Fuel Supply Agreement (FSA) with CIL.  NTPC owes CIL dues of INR 400 cr on CIL’s charge on differences in Gross Calorific Value of coal which NTPC declining to accept the calculations. (Economic Times)

 According to economic think-tank Centre for Monitoring Indian Economy (CMIE), production of foodgrains in India could expand by 0.6 percent to 247.6 m tonnes for FY2012-13 vs 246.2 m tonnes in the previous fiscal. Predictions of a normal monsoon season by meteorological department in India could see a moderate growth in crops of rice, wheat , coarse grains and pulses. (Business Standard)

Tata Steel – co. states that its plant in the state of the first phase of its plant in Odisha (Orissa), India would be completed by early FY 2014 period. The co.’s 3 m tonne steel plant, or the first phase, will operate in FY14 while its next 3 m tonne project will be complete by FY15. The cost of the total project is estimated at INR 23,000 cr. Co. would undertake a capex plan of USD 2.5 b in FY12-13 to complete the project. (Business Standard)

Hindalco Industries – Co. to start its 1.5 million tonnes per annum alumina refinery in Orissa by January 2013, according to a senior co. executive. (Firstpost)

Steel Co.’s – According to JSW steels director for commercial and marketing, steel demand in the current fiscal to be around 7.5 per cent in line with the expected GDP growth.  While broking firm Angle Broking expects demand of around 8 per cent in the fiscal. (The Hindu Business Line/PTI)

MMTC – Co. has signed a three year contract to supply 2.3 million tonnes of iron annually to Japanese and South Korean steel companies. (Business Standard/PTI)

Aurobindo Pharma Ltd/Dr Reddy Laboratories/ Sun Pharma/Torrent Pharma – Co.’s have received a final approval from the US FDA to manufacture and market equivalent generic version of Sanofi Aventis US LLC’s Plavix. (Business Standard/ The Hindu Business Line)

Jain Irrigation – Co. in agreement with Talis Management Holding to bundle Talis products as part of co.’s product offerings. (Economic Times)

EUROPE

The French President Francois Hollande to make a proposal for a common Eurobond issue in the upcoming European summit on 23 May 2012. (Telegraph UK)

According to UK Chancellor George Osborne, the financially weaker countries in the Euro zone would need more assistance from the European Union, failing which, these countries could face difficulties similar to Greece. (Reuters)

Chariot Oil & Gas Co. – Oil co.’s shares on the LSE declined by as much as 50 percent on news that its USD 75 m oil-exploration project in Namibia would have to be shut down. Inability to discover oil reserves in the Tapir basin in Namibia lowered the shares to 71.61 p a share from 90.03 p a share on Monday’s price. (Financial Times/Yahoo Finance)

NORTH AMERICA

Google Inc – Co. has got an approval to acquire Motorola Mobility for USD 12.5b from the Chinese authorities. However under agreement with the Chinese authorities co.’s Android operating system will have to be available at no cost for the next five years.  (IBNLive)

COMMODITIES

According to a report by the Joint Organizational Data Initiative (JODI), Saudi Arabia overtook Russia to become the biggest producer of crude oil. Saudi Arabia’s production rose to a 31 year high in March as its daily outputincreased to 9.923 m barrels vs Russia’s 9.920 m barrels for the same period. (Bloomberg)

Iran discovered an oilfield in the Caspian Sea, its first such discovery since 1908 or 104 years. The reserve is expected to contain around 10 b barrels of crude oil as stated by National Iranian Oil firm Fars. (Bloomberg)

According to Royal Dutch Shell, U.S natural gas prices could rise by almost twice the current prices by 2015 on account of rising demand. Shell CEO Peter Voser stated the co. was using an upwardly revised price of USD 4 – 6 per million British thermal units (mmBtu) for its 2014-15 operations rather than the current price of USD 2.55 mmBtu. Rising demand for shale gas in the US was currently responsible for lower prices of natural gas but prices could rise sharply in future. (Financial Times)

GEOPOLITICAL

According to Russian deputy foreign minister, military action against Iran was being considered in some western countries. (Firstpost)

INDIAN EARNINGS UPDATE – 12 MAY 2012

 INDIAN EARNINGS

Jain Irrigation – Co. reported Q411-12 net profit at INR 172cr vs. previous 4Q10-11 INR 109cr. Sales at INR 1212cr vs. previous INR 1200cr. Co. recorded a foreign currency gain of INR 30cr vs. previous INR 10cr. (The Hindu Business Line)

Gati – Co. reported a 3Q11-12 net profit at INR 8.05cr vs. previous INR 3.6cr. Income at INR 210.65 vs. previous INR 228.69. Increase in profit was due to profit on sale of land of INR 7.26cr during the 3Q11-12. (The Hindu Business Line)

Federal Bank – Co. reported FY11-12 net profit at INR 776.79cr vs. previous FY10-11 at INR 587.08cr. FY11-12 total income at INR 6091cr vs. previous INR 4568.84cr. For 4Q11-12 net profit at INR 237.6cr vs. previous INR 171.72cr. (Indian Express)

Zuari Industries Ltd – Co. reported 4Q11-12 standalone loss of INR 4.37cr vs. previous net profit at INR 21.42cr. Net sales at INR 23.54cr vs. previous INR 966.38cr. For FY11-12 standalone net profit at INR 47.56cr vs. previous INR 166.88cr. Net sales at INR 1243.64cr vs. previous INR 5522.83cr. (Business Standard)

ICRA – Co. reported 4Q11-12 net profit ay INR 22.50cr vs. previous INR 11.25cr. Total income at INR 43.30cr vs. previous INR 38.54cr. For FY11-12 co. reported net profit at INR 50.89cr vs. previous INR 44.91cr. FY11-12 net income at INR 139.36cr vs. previous INR 129.30cr. (Business Standard/PTI)

Asian Hotels (West) – Co. reported 4Q11-12 net profit at INR 7.68cr vs. previous INR 5.86cr. Sales at INR 36.85cr vs. previous INR 36.87cr. (Moneycontrol)

Apcotex Industries – Co. reported 4Q11-12 net profit at INR 3.47cr vs. previous INR 3cr. Sales at INR 67.23cr vs. previous INR 60.91cr. (Moneycontrol)

Ad Manum – Co. reported 4Q11-12 net profit at INR 1.43cr vs. previous INR 1.25cr. Sales at INR 7.31cr vs. previous INR 4.50cr. (Moneycontrol)

Indian Bank – Co. reported 4Q11-12 net profit at INR 345.41cr vs. previous INR 438.85cr. FY11-12 net profit at INR 1746.59cr vs. previous INR 1728.15cr. 4Q11-12 total income at INR 3498.02cr vs. previous INR 2865.80cr. For FY11-12 consolidated total income at INR 13,422.43cr vs. previous INR 10,550.82cr. (Business Standard)

Sintex – Co. reported 4Q11-12 net profit INR 88.42cr vs. previous INR 166.34cr. Net sales during 4Q11-12 at INR 1015.30cr vs. previous INR 1462.72cr. FY11-12 net profit at INR 301.91cr vs. previous INR 458.38cr. Net sales at INR 4436.77cr vs. previous INR 4475.14cr. Co.’s board recommended a dividend of INR 0.65 per equity share for FY11-12. (Financial Express)

Prism Cement – Co. reported 4Q11-12 net profit at INR 36.54cr vs. previous INR 35.67cr. Sales at INR 1364.19cr vs. previous INR 1061.64cr. (Moneycontrol)

Century Playboards – Co. reported 2Q11-12 net profit at INR 36.81cr vs. previous INR 14.30cr. Sales at INR 291.68cr vs. previous INR 233cr. (Moneycontrol)

Thermax – Co. reported 4Q11-12 net profit at INR 130cr vs. previous INR 126cr. Sales at INR 1661cr vs. previous INR 1745cr. (Thermax; Investor relations)