Midnight News – Jul 02nd 2020

unnamed Midnight News – Jul 02nd 2020

 

Vodafone Idea reported a net loss of over Rs.78,000 crore for the fiscal year 2019-20 with a net loss of over Rs.11,000 crore in the March quarter. The Telco wrote off the entire AGR dues in the September quarter after the Supreme Court order. The SC had assessed the total liability of Vodafone at around Rs.58,000 crore while the company had assessed its liability at closer to Rs.46,000 crore. Vodafone Idea had been stuck in a financial run after the order and was almost on the verge of insolvency. The DOT has given more time for the telcos to resolve the issue and keep competition alive in the industry.

June auto sales did not have much by way of surprise as the fall in auto numbers on a YOY basis was almost a given. From Maruti to Hyundai to Toyota the fall in monthly sales was around 50-60% on a YOY basis while the cuts were much steeper for companies like Tata Motors and M&M. However, there was a silver lining in the cloud and that came in the form of tractor sales. Both Escorts and M&M reported nearly 20% growth in tractor sales for the month of June. Hopes of a positive monsoon, early traction in rural demand as well as limited impact of COVID-19 lockdown on rural India helped.

Suzlon announced the completion of its restructuring process following the unanimous approval of its secured lenders. The term debt of the company has reduced substantially with interest payable at 9% over the next 10 years. The balance debt is converted into optionally convertible debentures bearing coupon of 0.01%. Some part of it will also be converted into compulsorily convertible debentures with 0.0001% interest and redeemable in 20 years. The company had made some huge bets on wind energy that had gone awfully wrong during the slowdown. Dilip Shanghavi owns a significant stake in Suzlon.

In a sign of the changing global auto equations, the market cap of Tesla, promoted by Elon Musk, has overtaken the market cap of Toyota making Tesla the most valuable auto company. Tesla shares have more than doubled in the last one year overtaking Toyota’s $201 billion market cap in the process. Musk has broken the rules of the game by selling cars online and also assembling the cars in an expensive location like California. Tesla produced 103,000 cars in the first quarter as compared to 2.4 million by Toyota. Tesla is already worth more than twice as much as Volkswagen of Germany.

Nitin Gadkari has announced a tighter clampdown on Chinese participation in road and infrastructure projects in India. This came a day after India announced that it was banning nearly 59 Chinese apps including some of the marquee apps like We Chat, UC Browser, Tik Tok, Cam Scanner, Hello etc. All these apps were extremely popular in India and the government has suspected that these apps were endangering the security and sovereignty of the country. Now Gadkari has announced the intent to ban Chinese bidders, suppliers and JV partners from all roads, rail, port and other infrastructure projects on security grounds. The government has already made prior approval for Chinese investments mandatory and this is a continuation of the precautionary measures taken in the light of troubles at the border.

Yes Bank plans to seek recourse from the Supreme Court after the Mumbai High Court refused grant interim relief to Yes Bank against Zee promoters from selling their shares. This pertains to a $52 million loan given by Yes Bank to Zee for which Subhash Chandra had offered personal guarantee. This loan also issued a covenant that Zee promoters could not sell shares before 3 years, which was breached. However, Zee promoters have argued that they had only provided a letter of comfort and not a personal guarantee to Yes Bank. These loans pertain to when Rana Kapoor was the CEO of Yes Bank.

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