Daily Archives: July 4, 2019

Cox & Kings had a total debt of Rs 3,238 crore at end of FY19 and this included both short-term and long-term loans

Lenders have turned cautious after Cox & Kings defaulted on commercial paper of Rs 200 crore in the last few days and are looking at ways to address the tour operator’s debt issues.

Cox & Kings continues to be a standard asset, and banks have not yet taken a call on reworking on debt repayment terms and other conditions. But two defaults (of Rs 150 crore and Rs 50 crore) last week have prompted banks to take steps for minimising their exposure.

A senior official said a public sector bank, which is under Prompt Corrective Action (PCA) regime, could not renew working capital facility for the tour operator. “RBI rules on PCA put restrictions on financing corporates whose financial instruments are downgraded. This had a cascading effect and complicated matters and lenders are cautious now,” he said.

Cox & Kings had a total debt of Rs 3,238 crore at end of FY19 and this included both short-term and long-term loans.

The total debt of Cox & Kings as at FY19 stood at Rs 3,238 crores as against Rs 4,014 crores at FY18. The company has been unable to replace its short-term debt with long-term loans, which has impacted its liquidity position.

Salaries and supplier payments have been delayed and International Air Transport Association has also suspended the tour operator from selling tickets under the billing and settlement plan, as it reviews the credit risk. A sister concern eezego1 too has been suspended from selling tickets. “There has been no defaults on airline payments. There are bank guarantees in place. IATA took the decision without any discussion with us and this is unfair,” a company executive complained. Detailed queries sent to Cox and Kings management remained unanswered.

Earlier, Cox & Kings had said it was taking all required measures to “resolve temporary cash flow mismatch. It is evaluating each business and identifying ways to improve operational performance. The company is focusing on cash flow generation from each business and working at the highest priority to free working capital.”

A senior public sector banker said the tour operator was in process of monetising some of its assets. “So far, they have not hung up their boots. If they are able to do monetise assets, it will aid in getting over current resource constraint.”

The defaults have stumped lenders and stock market as the company had reported of a comfortable liquidity position. According to a recent note by CARE Ratings, Cox & Kings had reported cash and bank balances of Rs 1,726 crore in June. Of this, it told CARE, that there was about Rs 1,300 crore, which could be used for debt repayment at any point of time.

Cox and Kings closed 4.86 per cent down at Rs 31.35 per share on BSE.

https://www.business-standard.com/article/companies/lenders-cautious-as-cox-kings-defaults-on-commercial-paper-of-rs-200-cr-119070400035_1.html

The stock opened at Rs 1,180 on the National Stock Exchange, rising 21.2 percent over final issue price of Rs 973

IndiaMART InterMESH, an online marketplace for business products and services, saw a strong listing on July 4. Hefty subscription and positive market mood supported the stock price.

The stock opened at Rs 1,180 on the National Stock Exchange, rising 21.2 percent over the final issue price of Rs 973.

It was trading at Rs 1,221.50 on the BSE, up 25.54 percent while it was quoting at Rs 1,215.50 on the National Stock Exchange, up 24.92 percent at 10:00:45 hours IST.

On volume front, IndiaMART traded with 1.25 lakh shares on the BSE and 12.7 lakh shares on NSE.

The Rs 475-crore issue was subscribed 36.16 times during the IPO period June 24-26.

The IPO was for 48,87,862 equity shares, including anchor portion of 21,95,038 equity shares. It was offered at a price band of Rs 970-973 per share.

https://www.moneycontrol.com/news/business/ipo/strong-listing-indiamart-intermesh-debuts-premium-4168051.html

If the deal goes through, it would be the second biggest merger in the Indian DTH space

Promoters of Dish TV might sell their 58 percent holding in the company to Bharti Airtel’s DTH arm for around Rs 5,000 crore, Business Standard reports.

Airtel Digital TV and private equity firm Warburg Pincus are likely to partner and purchase the Goel family’s stake for Rs 45-50 per share, or between Rs 4,800 crore and Rs 5,300 crore, the report said.

Discussions between Airtel and Dish TV began in March, the report stated. The Goel family had initially quoted Rs 62 per share for the transaction. But the offer price was lowered due to high promoter debt and rising prominence of JioFibre.

If the deal, which is likely to be finalised next month, goes through, it would be the second biggest merger in the Indian direct-to-home (DTH) space. Dish TV will be main brand after the merger.

Moneycontrol could not independently verify the story.

Airtel wants to merge Dish TV with Airtel Digital TV through a share swap after acquiring the former’s promoter stake and making an open offer for a 20 percent stake, the report said.

The Jawahar Goel-controlled Dish TV is facing financial hurdles, with the promoters pledging 94.6 percent of their 58 percent stake. Part of the proceeds raised will be used to repay their debt of over Rs 16,000 crore, the report added.

https://www.moneycontrol.com/news/business/dish-tv-promoters-may-sell-58-stake-to-bharti-airtel-warburg-pincus-for-about-rs-5000cr-4167891.html

The action, however, is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers, the RBI added.

The Reserve Bank of India (RBI) has imposed a penalty of Rs 1.75 crore on four public-sector banks, including PNB and UCO Bank, for non-compliance with KYC requirement and norms for opening of current accounts. While PNB, Allahabad Bank and UCO Bank have been fined Rs 50 lakh each, a Rs 25-lakh penalty has been imposed on Corporation Bank.

Giving details, the RBI said the penalty has been imposed for non-compliance with certain provisions of directions issued by it on know your customer norms or anti-money laundering standards and opening of current accounts. The action, however, is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers, the RBI added.

In a stock exchange filing on Tuesday, UCO Bank said, “We inform that the RBI in exercise of powers conferred under Section 47 (A) (1) (c) read with Section section 51 and 46 (4) (1) of the Banking Regulation Act, 1949, has imposed a penalty of Rs 5 million (Rs 50 lakh) on UCO Bank for non-compliance of RBI directives on ‘KYC norms/AML standards/CFT/obligation of banks and financial institutions under PMLA 2002’ and also on ‘opening of current accounts by banks — need for discipline’.”

Similarly, Allahabad Bank, in a stock exchange filing, said the RBI has imposed a penalty of Rs 50 lakh on the bank for non-compliance of the directions issued the by RBI on “KYC norms/AML standards” and “opening of current accounts”.

https://www.financialexpress.com/industry/banking-finance/rbi-fines-pnb-3-other-psbs-for-violation-of-kyc-norms/1626647/