Zambia to Cash in On IMF Deal Hopes With Larger Bond Sales

January 6 NCLAT Junks Anil Agarwal-led Firm's Takeover of Videocon, Calls for Fresh Bids A bankruptcy appeals court on Wednesday scrapped billionaire Anil Agarwal-led Twin Star Technologies' winning bid to take over Videocon Industries Ltd on a plea by some creditors that the money offered imposed a steep Rs 62,000 crore haircut upon banks, the Times of India reported. The National Company Law Appellate Tribunal (NCLAT) asked creditors to initiate fresh sale of Videocon, a consumer durables company manufacturing products ranging from air-conditioners to washing machines, for recovery of their unpaid Rs 64,637.6 crore. While a majority of lenders had previously accepted Twin Star Technologies' Rs 2,962.02 crore offer, Bank of Maharashtra (BoM) and IFCI Ltd dissented, saying the amount offered was close to the liquidation value of the bankrupt firm and that they cannot be paid less than the liquidation value. Following the nod of the Committee of Creditors of Videocon, the Mumbai bench of the National Company Law Tribunal (bankruptcy court) had on June 9 last year consented to Twin Star Technologies' takeover offer (called Resolution Plan under the bankruptcy law). That order was challenged by BoM and IFCI before NCLAT, which on Wednesday set aside the NCLT order saying provisions of the Insolvency and Bankruptcy Code (IBC) had not been complied with. Videocon promoter Venugopal Dhoot had also challenged the NCLT order, questioning the conduct of lenders. A two-member NCLAT bench of Jarat Kumar Jain and Ashok Kumar Mishra said the approval to the takeover plan was "not in accordance with Section 31 of the Code" and set aside "the approval of Resolution Plan by the Committee of Creditors (CoC) as well as Adjudicating Authority (NCLT)". The NCLAT also said under Section 31 (4) of the IBC, prior approval from the Competition Commission of India (CCI) was required for submitting the resolution plan, which was not obtained by Anil Agarwal's firm. It has remitted the matter back to CoC for completion of the process in accordance with the provisions of the Code. Read more. Evergrande Is Told to Tear Down 39 Buildings on Man-Made Island The crisis engulfing China Evergrande Group deepened, as the embattled property developer said it had been ordered to tear down dozens of buildings on an extravagant man-made island in southern China, the Wall Street Journal reported. At the same time, Evergrande released data showing its much-publicized financial stress had largely halted sales of new homes, depriving it of an important source of cash. Contracted sales dwindled to about 720 million yuan, the equivalent of just $113 million, between mid-October and year-end, the company’s figures showed. The buildings were part of an ambitious project known as “Ocean Flower Island,” an artificial archipelago that the developer has compared to Dubai’s Palm Jumeirah. The Ocean Flower development encompasses houses, hotels and other features, including a roughly 1.1 million square foot convention center built to resemble giant blooming peonies. In a statement Tuesday, Evergrande confirmed the order to demolish 39 buildings. The notice, issued by local authorities in the island province of Hainan along China’s southern coast, had previously circulated on social media and been covered by Chinese media. Authorities in Danzhou, a city in Hainan, ordered a subsidiary of Evergrande to demolish the cluster of buildings, according to a notice dated Dec. 30. The notice said the developer had illegally obtained permits and ordered it to knock down the buildings within 10 days or face a forced demolition. Evergrande has 60 days to file a potential appeal. Read more. (Subscription required.) London’s Fintech Boom Opens the Door for Dirty Money A 10-minute walk from the Bank of England, on the eastern edge of the City of London, lies a gateway to a new shadow world of money. Here on Dukes Place is the office of Moorwand Ltd., one of a fast-growing breed of upstarts that bill themselves as alternatives to old-fashioned banks when moving money around the world. Each day in the U.K. alone, an estimated 1.4 billion pounds ($1.9 billion) courses through loosely regulated digital payments businesses like Moorwand, Bloomberg News reported. Though only a small fraction of Britain’s financial flows, it’s a system critics warn is opening a door for dirty money. Moorwand is one of more than 200 electronic money institutions, or EMIs, approved by U.K. regulators since 2018. Trouble soon followed: A tiny lender in Denmark with which Moorwand had developed a close relationship flagged hundreds of suspicious transactions involving the payments firm, according to internal bank documents seen by Bloomberg News. In 2018, Danish authorities seized the bank, Kobenhavns Andelskasse, citing violations of money-laundering laws and referred the matter to the police. Read more. City of London Says COVID is Masking Brexit Hit to Finance Getting ahead in global finance after Brexit needs sustained British government impetus, the City of London's policy chief said on Wednesday, adding that COVID-19 may be masking some of the impact of leaving the EU, Reuters reported. Britain's financial sector lost most of its access to the European Union, which had been its single biggest export customer, after completing its exit from the bloc a year ago. And while it has adapted smoothly to Brexit, the full implications were still working their way through, Catherine McGuinness, whose five-year term as policy chief for the 'Square Mile' financial district ends in May, told Reuters. Some 7,400 finance jobs, far fewer than initially predicted, have moved from London to new EU banking hubs, but COVID-19 "may be masking what's really going on", McGuinness said. Read more. France’s Le Maire Moots Tax Cuts for Business as Election Looms French Finance Minister Bruno Le Maire dangled the possibility of further tax cuts for industry, in a sign President Emmanuel Macron is preparing to again run on a pro-business platform in April’s elections, Bloomberg News reported. Addressing company executives in Paris, he said the state needs to look further at how to lessen a burden that disadvantages France’s manufacturing sector compared to European peers. The current government has already planned a 20 billion-euro ($22.7 billion) reduction in taxes over two years as part of its Covid recovery program, but some of Macron’s rivals are promising more if they are elected. Le Maire also said the state should examine how it could further cut levies paid by employers to encourage higher-skilled and better-paid jobs. Read more. Government Tax Receipts Surge to Record €68 Billion in 2021 as Irish Economy Rebounds Government tax receipts surged to a record €68.4 billion last year as consumer spending and employment rebounded from the pandemic at a sharper-than-expected rate, the Irish Times reported. Year-end exchequer returns, published by the Department of Finance, show tax receipts rose by almost 20 per cent or €11 billion last year despite the negative impact of restrictions to curb the coronavirus at the start of the year. The latest numbers pointed to an exchequer deficit of €7.4 billion for 2021, an improvement of nearly €5 billion on 2020. The wider budget deficit figure, which includes non-exchequer spending and other financial transactions by the State, is expected to be just under €9 billion, less than half the €20 billion anticipated at the start of 2021. Read more. São Paulo State Prosecutor’s Office calls for bankruptcy decree of Itapemirim Airline The São Paulo State Prosecutor's Office has requested that the Court block the assets of Sidnei Piva and declare the bankruptcy of Viação Itapemirim and ITA Transportes Aéreos, the Rio Times reported. The opinion, signed by the 5th Bankruptcy Prosecutor, Nilton Belli Filho, was submitted in the airline's judicial reorganization proceeding. The airline, part of the Itapemirim group, which became famous for its interstate bus service, was launched in May last year, when its bus service was threatened by bankruptcy. Read more. Mexico Auto Sales Increase 6.8% in 2021, Still Behind Pre-Pandemic Level Mexico's annual auto sales rose by 6.8% in 2021, but were still far short of pre-pandemic levels as the car industry struggles to cope with shortfalls in semiconductors, official data showed on Wednesday, Reuters reported. Mexico sold 1,014,680 light vehicles last year, according to figures from the national statistics agency (INEGI) after sales fell 27.9% to 950,063 in 2020, a nine-year low. There were 1.3 million vehicles sold in 2019 before the pandemic while 2016 saw a record 1.6 million sales. Fausto Cuevas, head of the Mexican Automotive Industry Association (AMIA), recently forecast Mexico's auto production would only return to pre-pandemic levels in late 2023 or in 2024. Car production has been hobbled in recent months by a global semiconductor shortage, prompting automakers across North America to implement rolling shutdowns and curb output. The bottlenecks hit the industry in the second half of last year and during the October-December period, sales were the weakest they had been in the fourth quarter since 2010. Semiconductors are an indispensable component for the automakers, who need them for a wide variety of systems such as safety, navigation and entertainment. COVID-19 outbreaks in Asian semiconductor manufacturing hubs have slowed production. Read more. Kazakhstan’s Government Resigns Amid Unrest Over Fuel Prices Mass protests in Kazakhstan over an increase in fuel prices have prompted the country’s authoritarian government to resign and the president to impose a state of emergency in a crisis that threatens to destabilize the oil-rich former Soviet republic, the Wall Street Journal reported. Kazakh President Kassym-Jomart Tokayev has declared a two-week curfew in Kazakhstan’s western Mangistau region and in Almaty, the country’s largest city. The restrictions include a ban on mass gatherings and limitations on movement. Mr. Tokayev appealed to his compatriots “to show prudence and not to succumb to internal and external provocations, the euphoria of rallies and permissiveness,” in a statement published on his website Wednesday. “Calls to attack premises of civilian and military agencies are absolutely illegal. This is a crime and legal punishment may follow,” he said. Mr. Tokayev assured citizens that the “power will not fall,” adding that “we need mutual trust and dialogue rather than conflict.” The president, in comments carried on Kazakh state television and reported by Russia’s Interfax news agency, said he has sought assistance from the Collective Security Treaty Organization, a Russian-led intergovernmental military alliance of former Soviet states. Read more. (Subscription required.) Zambia to Cash in On IMF Deal Hopes With Larger Bond Sales Zambia’s central bank will bump up the size of its local-currency bond auctions by 73% this month to cash in on improved investor sentiment after the government moved closer to concluding a bail-out deal with the International Monetary Fund, Bloomberg News reported. The size of monthly bond tenders will increase to 2.6 billion kwacha , from 1.5 billion kwacha previously, according to the Bank of Zambia. It will offer 2 billion kwacha in fortnightly treasury bill sales, a 43% rise from the previous 1.4 billion kwacha. Zambia became Africa’s first pandemic-era sovereign defaulter in 2020, and the government needs the extra money. It has about 56 billion of kwacha of bonds and treasury bills maturing this year, while the 2022 budget foresees 25 billion kwacha of local financing. President Hakainde Hichilema’s administration, which won power in August, meanwhile plans to restructure as much as $17 billion in dollar debt. Read more.