News with Tags "debt"

Discoms paying power cos after debt recast, OBC confirms

Posted on Thursday, December 12, 2013 - 13:00 pm

=&0=&fter media reports suggested that the UP State Electricity Board (SEB) had recast its loans, CNBC-TV18 spoke to Oriental Bank of Commerce Chairman SL Bansal — one of the bankers who is part of the consortium — who confirmed the news.

Also read: UP discoms have cleared dues completely: PTC India

Bansal said disbursements towards SEBs had started taking place after the discoms started paying regular interest and placed bonds with them, in a sign that cash flows for the SEBs, and consequently power companies, may now be improving.


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Posted by on Thursday, December 12, 2013 - 13:00 pm.
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Wall Street willing to offer Freedom Group more debt: sources

Posted on Thursday, December 12, 2013 - 02:05 am

By Natalie Harrison, Michelle Sierra and Greg Roumeliotis

NEW YORK (Reuters) – Some creditors of Freedom Group Inc, maker of the Bushmaster rifle used in the Newtown, Connecticut, school massacre, are willing to offer the company more debt, despite the fact many of its private equity fund investors want out.


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Posted by on Thursday, December 12, 2013 - 02:05 am.
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Pimco Total Return maintains U.S. government debt stake in November

Posted on Wednesday, December 11, 2013 - 10:01 am

NEW YORK (Reuters) – The Pimco Total Return Fund, the world’s largest bond fund, kept its exposure to U.S. government debt unchanged in November even as worries over the Federal Reserve’s plans for cutting its stimulus hurt Treasury prices, data from the firm’s website showed on Tuesday.


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Posted by on Wednesday, December 11, 2013 - 10:01 am.
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Corporate debt recast: More failure than success

Posted on Wednesday, December 11, 2013 - 05:27 am

With banks resorting to restructuring debt to delay the formation of non-performing assets (NPAs), the performance of the corporate debt restructuring (CDR) cell has taken a hit.

For the first time in five years, the number of cases referred to the CDR cell and withdrawn on account of failure (even after restructuring, the accounts slipped into the NPA category) exceeded the number of successful cases, latest data from the CDR cell showed. A total of 103 cases worth Rs 24,915 crore slipped into the NPA category till September, compared with 67 cases aggregating Rs 51,104 crore that were upgraded to standard category.

“For the first time in the last five years, cases withdrawn on account of failure are higher than the cases exited successfully. The majority of the slippages were on account of non-payment (interest and principal repayments),” broking firm Macquarie said in a note to clients.

Bankers said the number of cases slipping into the NPA category had increased in the last couple of years. For some state-run banks, 18-20 per cent of their restructured loans are slipping into the NPA category, against 10 per cent two years ago.

“Small accounts populate the failed cases. Banks show more urgency to give support to large units, as the cost of failure could be high. Also, big units have managerial capability to make changes and bring in required contribution. Small units suffer from managerial deficiency and their capacity to ride through adverse times is limited,” said a senior State Bank of India official.

To stop misuse of the CDR mechanism, a Reserve Bank of India committee headed by Executive Director B Mahapatra had recommended from April 2015, banks don’t enjoy regulatory forbearance while recasting debt. It suggested from April 2015, all restructured assets attract provisioning of 15 per cent. Currently, after restructuring, a loan continues to remain a standard asset, subject to certain conditions. Restructured standard assets have a provisioning requirement of five per cent, compared with 0.4 per cent for standard advances.

In October, seven cases worth about Rs 22,000 crore were referred to the CDR cell, compared with cases worth Rs 24,900 crore in the quarter ended September. In the first quarter, cases worth Rs 39,400 crore were referred.

Some of the cases referred to the CDR cell this quarter include ABG Shipyard (Rs 10,000 crore), Era Infra (Rs 5,200 crore), Coastal Projects (Rs 3,800 crore) and Gujarat NRE Coke (Rs 2,200 crore). Companies approaching the CDR cell were primarily from the power, roads, construction and small and medium iron & steel sectors.

The CDR cell data doesn’t include bilateral restructuring between banks and companies. In the past two years, CDR restructuring accounted for only 30 per cent of the overall restructuring.

Public sector banks have accounted for most of the debt restructuring, though a few large private banks, excluding HDFC Bank, are also facing a similar situation.

“With regard to asset quality, the problems seem to be concentrated to old-generation banks—public sector banks and old private banks. I would urge the managements of these banks to be sensitive about this trend and to be more willing to recognise the problem at the initial stages so that an early resolution can be found to the NPA problem,” RBI Deputy Governor K C Chakrabarty had said recently. The central bank is also mulling incentives to banks that detect asset quality pressures early.

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Posted by on Wednesday, December 11, 2013 - 05:27 am.
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Fund raising via debt placement hits 4-month low in Nov: Sebi

Posted on Wednesday, December 11, 2013 - 03:57 am

Markets always reap gains before elections

Pre-election blues are common to political parties, but for Dalal Street, it’s a period to rejoice. According toan analysis by leading foreign …


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Posted by on Wednesday, December 11, 2013 - 03:57 am.
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Seychelles sees GDP growth up, debt reduction on track

Posted on Tuesday, December 10, 2013 - 17:28 pm

By George Thande VICTORIA (Reuters) - A recovery in tourism will help the Seychelles' economy grow by a faster-than-expected 3.5 percent this year, then accelerate to 4 percent by 2015, the country's finance minister said...

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Posted by on Tuesday, December 10, 2013 - 17:28 pm.
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Reliance Communications mulling $1bn debt issue: Sources

Posted on Tuesday, December 10, 2013 - 15:49 pm

=&0=&he Anil Ambani-led telecommunications firm Reliance Communications is considering a bond issue to the tune of USD 1 billion, reports CNBC-TV18, quoting sources.

The firm is said to have appointed bankers to finalize the issue and has short-listed European and Singapore markets as potential markets.


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Posted by on Tuesday, December 10, 2013 - 15:49 pm.
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$18 Billion in Debt: Images of Decaying Detroit

Posted on Tuesday, December 10, 2013 - 14:15 pm

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Posted by on Tuesday, December 10, 2013 - 14:15 pm.
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Reliance Communications mulling $1bn debt issue: Sources

Posted on Tuesday, December 10, 2013 - 13:46 pm

The Anil Ambani-led telecommunications firm Reliance Communications is considering a bond issue to the tune of USD 1 billion, reports CNBC-TV18, quoting sources.

The firm is said to have appointed bankers to finalize the issue and has short-listed European and Singapore markets as potential markets.


The issue, which is targeting fund-raising at the cost of debt of around 8 to 9 percent, would, however, depend on market conditions.


Proceeds from the issue would likely go towards retiring and restructuring the company’s existing high-cost debt.


The debt-laden firm had total liabilities of Rs 41,169 crore as of September 2013.


When contacted, Reliance Communications declined to comment on the issue.


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Posted by on Tuesday, December 10, 2013 - 13:46 pm.
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Get a prudent mix of debt and equity: Don’t buy or sell, just rebalance your portfolio

Posted on Tuesday, December 10, 2013 - 10:29 am

NEW DELHI: With the Sensex touching an all-time high level on Monday, mutual fund investors should get going. This is not the time to buy equity funds, but only to rebalance portfolios.

If the upsurge in stock prices has increased your allocation to equities by more than 10 percentage points, your portfolio carries more risk than planned. The current rally is a good opportunity to bring down the risk by rebalancing the portfolio. Shift some of the money out of equity funds to the stability of debt.


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Posted by on Tuesday, December 10, 2013 - 10:29 am.
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Exclusive: Russia signs deal to forgive $29 billion of Cuba’s Soviet-era debt – diplomats

Posted on Tuesday, December 10, 2013 - 04:40 am

By Marc Frank

HAVANA (Reuters) – Russia and Cuba have quietly signed an agreement to write off 90 percent of Cuba’s $ 32 billion debt to the defunct Soviet Union, a deal that ends a 20-year squabble and opens the way for more investment and trade, Russian and European diplomats said.


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Posted by on Tuesday, December 10, 2013 - 04:40 am.
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Lodha takes big strides amid gloom

Posted on Tuesday, December 10, 2013 - 03:31 am

Late last month, Mumbai-based Lodha Developers hit the headlines when it announced the acquisition of MacDonald House, an upscale property in one of the most sought-after localities in central London which is near the old US embassy, for close to Rs 3,000 crore (£299 million) from the Canadian government. The 0.67-acre property is located in the heart of the city and houses the Canadian High Commission. Once it is completed, the acquisition will make Lodha Developers the owner of one of the toniest pieces of real estate in London.

The deal is significant for two reasons. This is the first time that an Indian developer has ventured into the London market. So far, Indians had ventured only into West Asia. It has also happened at a time when the Indian real estate market is in the dumps - demand is well below supply and developers are reeling under a liquidity crunch. And this is not a small acquisition. To raise so much money in these days of tight liquidity at home is no joke. Naturally, people are asking if Lodha Developers has bitten off more than it can chew.

Abhisheck Lodha, the 34-year-old managing director of Lodha Developers, is no stranger to such questions. In 2012, Lodha Developers had bought 17 acres from DLF, the country's largest real estate developer, in Worli, Mumbai, for a jaw-dropping Rs 2,725 crore. (DLF had bought the land from state-owned National Textile Corporation for Rs 703 crore in 2005 but decided to exit in a few years; it made a killing on the transaction.) "When we bought the DLF plot, everyone asked how we will manage it. Whatever we have done is there for everyone to see," Lodha said from London.

Getting the mix right
What Lodha has done is that he has launched a mixed land-use project called The Park on the plot. The project boasts celebrity connections: Bollywood actress Aishwarya Rai Bachchan is the brand ambassador. Lodha has tied up with US-based Trump Organisation to build a tower inside the project. The 800-feet tower will comprise two or three units on each floor, with a mix of 3BHKs and 4BHKS. The price tag will be Rs 8 crore and above. According to the company, the tower with its golden edifice will be "an icon on the Mumbai skyline". Lodha claims the project has already racked up sales worth Rs 10,000 crore . It is not clear if this is the money that will bankroll the London acquisition.

In addition to the DLF and London acquisitions, the Lodha group bought a plot in Wadala from the Mumbai Metropolitan Region Development Authority for Rs 4,053 crore in 2010. It is considered the biggest real estate deal in the country so far. In all, Lodha Developers has spent over Rs 2,000 crore on buying land in the last three years, making it the largest land buyer in the country. In addition, the company repaid Rs 2,542 crore to Deutsche Bank last year. Deutsche had invested Rs 1,640 crore in Lodha Developers in 2007 by buying convertible debentures of the company. The company, it is worth noting, has found all this money even though it deferred a Rs 2,000-crore initial public issue in 2010 due to the volatile markets. So, where's the money coming from?

Lodha, for his part, says most of the acquisitions, including the recent one in London, have been funded through internal accruals. In a recent interview with Business Standard, Lodha had said the company did sales of Rs 8,700 crore in 2012-13, which is the highest for any real estate developer in the country. (If Lodha's numbers are accurate, his company has overtaken DLF which did sales of Rs 7,772 crore in 2012-13.) There is some scepticism, though. Raja Kaushal, managing director of Gatere, an alliance partner of BNP Paribas Real Estate, believes there is a difference between the announcements made by unlisted Lodha and its listed peers: "Listed companies need to disclose numbers every quarter, but Lodha does not have that obligation."

Lodha had insisted in an earlier interview that business was booming. "We had cash flows of Rs 2,500 crore last year and we will have cash flows of Rs 3,000 crore in 2013-14," he said. "We have the best credit facilities in the country and our average cost of funds ranges between 10.5 per cent to12 per cent." The Lodha real estate empire is closely held. According to Bloomberg Businessweek, Lodha serves or has served as a director on the boards of more than 40 companies, most of them in real estate and linked to the Lodha name. Business Standard could not access the balance sheet and financial performance of these companies, except for Cowtown Land Development which reported revenue of Rs 491.74 crore and loss of Rs 25.39 crore in 2012-13.

No debt problem here
Sanjay Dutt, the managing director of property consultancy Cushman & Wakefield, believes Lodha Developers is financially comfortable. "Its debt-equity ratio would be around 1:1, whereas most developers have 1:3," says he. "If you have assets of Rs 10,000 crore, it does not matter even if you have debt of Rs 10,000 crore on your books." The Lodha Developers website attributes the "group's tremendous success" to "financial investments from the finest global investors including JP Morgan, and Deutsche Bank".

But at a time when about 45 per cent of Mumbai's under-construction properties are unsold, how is the Lodha group generating such strong cash flow? Lodha claims, and many in the industry agree, his projects in Dombivali and Kalyan on the outskirts of Mumbai where he is developing mid-income projects and in central Mumbai where he is building a mix of premium and mass housing projects are all doing brisk sales. "Lodha is a brilliant marketing story. It has tried everything, be it getting Aishwarya Rai or Trump into its project or renaming a place. It is doing higher numbers than before. Buyers believe in it, despite it completing only a few projects till date," says Kaushal. The Lodha Group is developing 35 million square feet of real estate with over 30 projects in and around Mumbai.

Kushal adds that Lodha's ability to buy clean titles, get approvals and launch projects is very good. For instance, within two months of buying the DLF plot in Mumbai, Lodha did a pre-launch of the property, which was considered way too fast for any realty project in the city.

According to sources in the real estate sector, Lodha does thorough planning on marketing, sales and development even before he bids for a project. "They buy the property, launch it and quickly exit, unlike many developers who sit on land thinking prices will go up," says the director of a Mumbai-based developer which competed for a South Mumbai property with Lodha Developers.

"They also prepare dummy brochures for the project if they like the piece of land on the block." Dutt of Cushman & Wakefield believes that except Lodha Developers none of the realty companies has built strong markets among non-resident Indians, or NRIS, in the overseas markets, and this has helped it in selling projects better than others. Lodha has set up offices in Dubai, London and other markets to tap NRI interest, consultants say. Dutt says what also helps is that Lodha has launched projects across price points - a good way to hedge the risks.

"The group has projects starting from Rs 3,000 to Rs 30,000 per square foot across Mumbai, which not many developers have," Dutt says. Thus, its projects in Mumbai run the spectrum from Napean Sea Road to Dombivali.

Of course, the Rs 3,000-crore question of the moment after the Mac Donald's acquisition is what will Lodha do with the London property? One report suggests that the company may convert it into super-luxury homes and sell them for a neat profit. Those who know Lodha won't be surprised but it remains to be seen if the London market is buoyant enough for Lodha to sell these homes.


WHO ARE THE LODHAS?

Lodha Developers was set up in 1980 by Mangal Prabhat Lodha, who holds a law degree from the University of Jodhpur. He is the father of Abhisheck Lodha and is the chairman of the company. He is, according to the company's website, "involved in the business development and corporate relationship functions." He is also a Bharatiya Janata Party member of the Maharashtra legislative assembly. This has, at times, led to speculation that some politicians have invested in his group. "It is a stupid allegation. There is not a single rupee invested from illegal sources. If somebody believes that we have such funds, they should come in front and prove it," says Abhisheck Lodha,(pictured above) the managing director of the company.

Abhisheck Lodha holds bachelors and masters degrees in industrial engineering from the Georgia Institute of Technology, Atlanta, USA. He joined the group in 2003, says the website, and since then has been involved with the design, construction and corporate planning functions. Abhinandan Lodha, deputy managing director, is involved in sales, marketing and finance. Rajendra Lodha, director, leads the business development function.

Apart from Mumbai, the group is developing projects in Pune and Hyderabad. "The Lodha Group has several developments to its credit, including the Lodha Bellissimo, the only Indian residential development to feature amongst the top 1,000 landscapes in the world," the company's website says.

LODHA AT A GLANCE

  • Lodha is developing over 30 projects in Mumbai
  • Had sales of Rs 8,700 crore in FY 2013;
  • Bought land parcels worth Rs 12,000 crore in the last three years
  • Bollywood actress Aishwarya Rai Bachchan is the brand ambassador for a Mumbai project
  • Last month, bought prime London property for over Rs 3,000 crore
Source: Company

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Posted by on Tuesday, December 10, 2013 - 03:31 am.
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Exclusive: Russia signs deal to forgive $29 billion of Cuba’s Soviet-era debt – diplomats

Posted on Tuesday, December 10, 2013 - 01:55 am

By Marc Frank HAVANA (Reuters) - Russia and Cuba have quietly signed an agreement to write off 90 percent of Cuba's $32 billion debt to the defunct Soviet Union, a deal that ends a 20-year squabble and opens the way for m...

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Posted by on Tuesday, December 10, 2013 - 01:55 am.
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China to judge local governments by their debt: Xinhua

Posted on Monday, December 9, 2013 - 21:40 pm

BEIJING (Reuters) – China will soon rate the performance of local governments partly by how much debt they incur, as Beijing tries to wean the country off heavy government investment, state media said.


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Posted by on Monday, December 9, 2013 - 21:40 pm.
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China to judge local governments by their debt: Xinhua

Posted on Monday, December 9, 2013 - 20:41 pm

BEIJING (Reuters) – China will soon rate the performance of local governments partly by how much debt they incur, as Beijing tries to wean the country off heavy government investment, state media said.


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Posted by on Monday, December 9, 2013 - 20:41 pm.
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China to judge local governments by their debt: Xinhua

Posted on Monday, December 9, 2013 - 19:04 pm

BEIJING (Reuters) - China will soon rate the performance of local governments partly by how much debt they incur, as Beijing tries to wean the country off heavy government investment, state media said. The central organiz...

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Posted by on Monday, December 9, 2013 - 19:04 pm.
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India to conduct debt switch in mkt, likely soon: officials

Posted on Monday, December 9, 2013 - 14:24 pm

India's planned Rs 50,000 crore debt switch programme will be done through the bond market and not through the RBI, two officials with direct knowledge of the country's plans said on Monday.

Longer-dated government bond yields have been rising in recent days partly due to worries the debt switch programme, first unveiled in the 2013/14 budget earlier this year, may be implemented soon.


Under the planned debt switch, the government will buy short dated debt maturing in fiscal years 2014/15, 2015/16 and 2016/17 and in turn sell longer-dated bonds to markets. The central bank will not be buying or selling debt to the government directly, these officials said.


This transaction, planned as cash neutral, will be done to reduce the redemption pressure on the government's coffers.


"The debt switchover has been planned for the second half of the current fiscal year and would surely go through market and not the RBI," said the official, who declined to be named because of the sensitivity of the issue.


As to timing, one of the officials said the debt switch will happen "very soon," while another said it will be done at "an appropriate time" in the second half of the fiscal year ending March, depending on market conditions.


The new benchmark 10-year bond gave up all of its early gains and was trading up at 8.87 percent on Monday.


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Posted by on Monday, December 9, 2013 - 14:24 pm.
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Fund raising via debt placement hits 4-month low in Nov: Sebi

Posted on Monday, December 9, 2013 - 13:01 pm

Pre-Market: Market seen opening lower

At 8.28am, SGX Nifty was trading at 6351, down 29 points, indicating a weak start.

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Posted by on Monday, December 9, 2013 - 13:01 pm.
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7 States With the Least Student Debt

Posted on Saturday, December 7, 2013 - 18:00 pm

Student Debt

Student debt is one of the most perilous types of obligations that have ballooned over the past decades. While some types of debt, such as a mortgage, can be used to build an asset and to avoid paying rent, student loans do not help graduates to accrue value or to increase equity. Instead, student debts act as a cramp for graduates, the very people who are struggling to get a grasp on the bottom of the corporate and societal ladders.

With debts, the choices for jobs become limited, prioritizing immediate income and excess funds over the most interesting job or the career that would build the most human capital skills for the future. In addition, debts often prevent students from furthering their education until they have paid off their obligations, delaying graduate school for thousands across the nation.

While there are many ways to sidestep student loans, often the most effective way to fight them is by simply attending a cheaper college, forcing many prospective students to choose their university based on their finances rather than on their interests or their academic program. Even the mere threat of loads of debt is enough to convince most incoming students to seek out a cheaper option. Often times, those options vary not only in caliber of school, but also in location, with regional variance in student debt being incredibly high. That being said, let’s take a look at the 7 states in the country with the lowest levels of student debt.

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Posted by on Saturday, December 7, 2013 - 18:00 pm.
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Bali decision ring-fences us completely: Anand Sharma

Posted on Saturday, December 7, 2013 - 10:14 am

Finmin releases handbook on government debt

Total debt of govt increased by 6.7% in the second quarter ended Sept 2013 of FY14

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Posted by on Saturday, December 7, 2013 - 10:14 am.
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