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Niti Aayog pushes for sale of Air India
Banks start proceedings against RCom
Asian Voice | 10th June 2017
Government think tank, Niti Aayog has recommended strategic disinvestment of loss-making Air India to make sure the Centre does not have to sink in more money into the airline and can allocate more funds for health and education. Niti Aayog's fourth report, submitted recently, has detailed a possible roadmap for Air India disinvestment, including writing off loans to the tune of £3 billion. It proposes to transfer the aircraft-related loans and the working capital to the new owner, while taking care of half the liability. It suggested that real estate assets, which include prime locations in many cities,
can be hived off into a separate company before offering up to 100 per cent equity to a strategic partner. The buyer will also get separate other rights currently enjoyed by the state-run airline. Officials even suggested that there is no need to have a designated national carrier. Air India has accumulated losses of about £4 billion and projected a cash deficit of £300 million for the current financial year with a gap narrowing to around £170 million annually in the coming years. A source said, “The Aayog's recommendation is very clear: find a strategic
investor for AI. Now that is a call for the owner to take. Some initial clarity on the future course may come in the next 15 days or so.” Aviation Minister A Gajapathi Raju and his deputy Jayant Sinha confirmed that Niti Aayog had submitted its report, but refrained from disclosing details. “We are very proud of AI and will consider all
possible alternatives for it. All options are open. Niti Aayog has suggested steps for a strong and viable airline,” Raju said at a press conference. AI needs to get £2.5 billion more from the government over the next 15 years. “It is not correct to see us as a domestic airline alone with 14 per cent market share. We are essentially an international airlines with a very robust foreign network. Our share of international travel to and from India last year was close to 17 per cent. AI has a critical network and it should not be seen as a burden. We are a victim of wrong decisions
by previous governments. Luckily, there is a clear administration determining our future now,” an insider said. A ministry official said Niti Aayog's recommendations are not binding on it and it will choose the path that is most suited for having a strong AI in future. “We hugely respect Finance Minister Jaitley's views. What we can assure everyone is that there will be visible action in AI very soon as Niti Aayog's recommendations and the FM's statement have been made in all seriousness that will lead to the future path for the airline being laid out in three months,” the official said.
Tata Group reviewing its diverse portfolio Tata Group is reviewing its diverse portfolio to streamline operations and allocate capital more efficiently. Chairman N Chandrasekaran will unlock value in businesses that are non-core and face growth headwinds. He is also capping capital exposure in Tata Ceramics, Tata Business Support Services, Tata Asset Management, Tata AutoComp Systems,
and Tata Chemicals' fertiliser unit. Sources said the group has started a process to sell drug discovery services company Advinus Therapeutics, drawing interest from private equity
funds Kedaara Capital and True North as well as from strategic players, GVK Biosciences and Lambda, a unit of Intas Pharma. These divestitures of small to med-sized companies wouldn't reduce the group's $25-billion debt burden much, but signal the chairman's intent to deploy money in businesses with growth momentum and better return on equity.
Advinus Therapeutics, co-founded along with entrepreneurial scientist and former Ranbaxy R&D head Rashmi Barbhaiya a decade ago, is currently valued between £40 million and 50 milllion. Tatas decided to exit the business given its long gestation nature and scaling up challenges. Kerala-based Tata Ceramics, which has seen an ownership change with
Titan taking control of the unit from Tata Power, and Hyderabad-based standalone BPO company Tata Business Support Services are among the smaller assets where the group is reconsidering its interest. Chandarasekaran has renewed plans to sell stake in Tata Asset Management, which has drawn interest from US' Vanguard and Europe Allianz.
Reliance Communications lenders have placed the cash-strained telecom company under a strategic debt restructuring exercise. Rcom has debts of over £4.57 billion on its books and intends to reduce it by £2.50 billion through a merger of its mobile services units with Aircel and a sale of its interest in the telecom tower business to Canada's Brookfield. Its current market capitalisation is £513.9 million. Chairman Anil Ambani said, “We met the lenders and presented our plan for strategic transformation and I am happy to report that our plan has been accepted by them.”He added that creditors have given the company time till end of December to seal the two transactions which would reduce RCom's debt by 60 per cent. “This will be the largest ever debt reduction by a company in the history of India.” Ambani said the Aircel and Brookfield deals is expected to be concluded well before the deadline.
Take pay cuts: Murthy tells seniors MFS launches industry first property development initiative MFS today launches FlipFinance2017 – a £20 million funding drive to support the aspirations of budding UK property investors and landlords in need of fast access to capital to act upon their shortterm investment plans. Running until June 2018, the initiative will serve a generation of first and second-time property investors in completing refurbishment and restoration projects that will form the foundations of tomorrow’s property portfolios. After finding 30% of UK investors are turning to property over the next 24 months, MFS launched the dedicated funding drive to enable investors to act on this sentiment, catalysing further movement across the probate, auction, refurbishment and restoration segments of the nation’s dynamic property market. Almost a year on since the EU referendum announcement, the UK property market has demonstrated remarkable strength, defying speculation of a decline in housing demand. Recent industry data has demonstrated that the average asking price for a UK residential property has now reached
Infosys co-founder NR Narayana Murthy said senior leaders in IT companies should consider taking salary cuts instead of laying off youngsters, encouraging employees to reskill for companies to take advantage of new opportunities emerging in the industry. Murthy said it was a strategy adopted by Infosys in 2001 when the market turned tough following the dotcom bust. “We all sat together and then we said, let us make some sacrifice
for youngsters. Let's not postpone joining dates and demonstrate commitment by senior people taking salary cuts based on disposable income,” he said. When asked about layoffs and employees petitioning labour commissioners in various states, he said, “I have a feeling that it is possible to save the jobs of youngsters.” Several major IT companies are planning larger than usual layoffs this year after a decline in business
and the industry's shift to newer technologies like cloud, mobile and machine learning. Murthy said industry leaders should identify new areas of opportunities, mount training programmes in those technologies for youngsters and give them enough opportunity to pick up those technologies. “And then, tell them you have to work harder and ensure you are in a position to add value, otherwise we will not have opportunity for you.”
Beleaguered pharmacy's woes continue Paresh Raja, pictured, CEO, MFS commented:
a record high of £317,281. Despite this, an estimated 1.4 million residential properties currently lie uninhabited across the UK – the highest level it has been for 20 years. In response, FlipFinance2017 funding will be made available in the form of bridging loans ranging from £100,000 to £1 million, subject to review by MFS’ inhouse credit analysis and due diligence processes. With the UK demand for residential properties outweighing supply, FlipFinance2017 is a timely initiative that will help catalyse the property market and ensure investors can act take advantage of the short-term property
opportunities on offer. “By giving opportunities and increasing awareness to budding property investors to have access to Bridging in a more simple and transparent way not only assists the growth and movement of properties in the market but gives a positive outlook for Bridging which I strongly believe can assist businesses to grow and develop. And take advantage of short term property opportunities!!” To find out more about FlipFinance2017, or to learn how our bridging finance solutions can support your property investment strategy, speak to a member of the MFS team today on 020 7060 1234.
It has been reported in a recent edition of the Chemist & Druggist magazine that community pharmacies are struggling to pay suppliers after a 20 per cent funding drop. The drop in funding which was predicted to be to be around 12 per cent has reached an alarming level down to 20 per cent. According to the report, pharmacist CJ Patel who owns five pharmacies in Croydon, London and who is also chair of the Croydon local pharmaceutical committee (LPC) said, “We were expecting a £3,000 loss a month, per pharmacy, but it is more like an average of £6,000. Now I might be being a bit simplistic by just looking at the amount of money in my bank account each month, but that is the money I use to pay my suppliers and my staff. If that has
gone down, then obviously that impacts my ability to pay these people.” “I’m not sure whether PSNC (Pharmaceutical Services Negotiating Committee) was misled by the government about the effect of the funding cuts, or whether the government has implemented greater cuts than they originally announced,” he added. The problem is reported
to be widespread with several pharmacies across London unable to pay suppliers with the money that they had received. Speaking to Asian Voice, Umesh Patel a well known contractor from the North East of England said,“The present payment system by NHS England is totally unacceptable. The DOH must revise the current payment to pay the full amount within 30 days of submitting all the prescriptions and services. The present NHS cuts and outdated payment structure is seriously effecting cash flows of all community pharmacies. It takes them well over 30 days to make proper adjusted payment for the prescription we submit to the pricing authority. With the available technology I fail to understand why there are delays in making payments to contractors.”