If India’s Future Group cannot sell assets, $4 billion in bank loans and debentures will be at risk, pushing its retail unit into insolvency, the company said in a court filing on Wednesday against Amazon.com Inc., which wants to block the sale, Reuters reported. A court in New Delhi blocked Future Group’s sale of retail assets to Reliance Industries on Tuesday after Amazon raised objections to the deal. The corporate battle has embroiled sprawling businesses led by two of the world’s richest men: Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani.
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Indian Prime Minister Narendra Modi’s government on Monday proposed a nearly half-a-trillion-dollar budget for the 12 months beginning on April 1 that shows New Delhi is taking a largely conservative tack, the New York Times reported. Infrastructure and health care spending are set to rise significantly, but Mr. Modi’s budget also calls for reducing debt. Over all, spending would rise less than 1 percent at a time when India is suffering from its worst recession in years while battling the coronavirus.
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An Indian court has temporarily restrained Future Group from selling its retail assets to Reliance Industries Ltd., an interim win for Amazon.com Inc. which is opposing the deal with an eye to dominate a large and vital consumer market, Bloomberg News reported. The Delhi High Court on Tuesday ordered the Future Group and Indian authorities to ensure the status of the indebted Indian retailer’s assets are maintained as is, putting on hold any further steps toward completing the $3.4 billion sale to billionaire Mukesh Ambani’s Reliance conglomerate.
India’s economy is experiencing the worst contraction in decades as a result of coronavirus. But even if the threat of the virus fades, India’s medium-term growth prospects will be hindered by two policy reversals that predate the pandemic, the Financial Times reported. The first is a return to high tariffs — an external-facing move that will hit productivity. The second is the undermining of the 2016 bankruptcy code — an internal policy that will lead to inefficient allocation of credit.
The Delhi High Court on Monday issued notice in a petition challenging Section 10A of the Insolvency and Bankruptcy Code 2016 insofar as it allows insolvency proceedings against persons and personal guarantors (Getamber Anand vs UOI), the GoaChronicle reported. A Division Bench of Chief Justice DN Patel and Justice Jyoti Singh sought response from Central government and Insolvency & Bankruptcy Board of India. The petitioner, Getamber Anand, is the Chairman and Managing Director of the ATS Group, a leading real estate group in the Delhi-NCR area.
When India revamped its bankruptcy code in 2016, some foreign investors were hopeful it would rewrite the rules of capitalism in the country. The big US distressed debt specialist Oaktree Capital was among those that saw opportunities to invest in the country following the attempt to turn one of the slowest insolvency regimes of any large economy into one of the fastest.
Shares of Kotak Mahindra Bank Ltd. dropped after investors expressed concerns over the level of bad loans held by India’s third-largest lender by market value, Bloomberg News reported. The bank’s gross bad loan ratio narrowed to 2.26% at the end of December from 2.55% three months earlier, but this ratio would have been 3.27% if India’s court hadn’t barred financiers from marking soured assets, it said in a filing on Monday. A “disproportionate portion” of the additional problem loans, including those that haven’t been marked as bad debt, are in unsecured consumer retail, it said.
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Vijay Mallya, who is due to be extradited to India, has applied for "another route" to be able to stay in the UK, the embattled liquor tycoon's barrister representing him in bankruptcy proceedings in the High Court here confirmed in the court for the first time, the Deccan Herald reported.
India’s Supreme Court upheld laws that protect new owners of insolvent companies from charges filed against the previous management in a verdict that could pave the way for faster resolution of big bankruptcies, Bloomberg News reported. A bankrupt company and its assets cannot face criminal proceedings once it is sold to new owners, the Supreme Court said on Tuesday while dismissing petitions challenging the rules. The former management can still be prosecuted.
India’s troubled shadow banks face mounting challenges to a nascent recovery from the pandemic, with their asset quality set to deteriorate further as flagged recently by the financial regulator, Bloomberg News reported. Non-performing assets already swelled in the most recent data to the highest in at least five years, at 6.3% as of March 2020 even before the worst of the pandemic impact, the Reserve Bank of India said in a report last week. That’s up 100 basis points from the year earlier, and the RBI forecasts it’s headed higher.