India

Five major stressed power producers are preparing to oppose insolvency proceedings on the grounds that lenders filed petitions against them as per a central bank circular on debt resolution that was recently quashed by the apex court, people familiar with the plans said, The Economic Times reported. The five power projects of Lanco Amarkantak, Avantha Power, KSK Mahanadi, Rattan India Power (Amravati project) and Rattan India Nashik Power (formerly Indiabulls) account for over Rs 50,000 crore of unpaid dues.

The government is soon expected to put in place a framework for insolvency resolution in case of personal guarantors to corporate debtors, and take up the issue of debt resolution in case of proprietorship and partnerships in the second phase, the Indian Express reported. As the Insolvency and Bankruptcy Board of India (IBBI) has already finalised the norms for individual bankruptcy resolution in case of personal guarantors, the government is expected to notify these within a month, sources familiar with the matter said.

An entity set up to finance affiliates of Etihad Airways PJSC said Jet Airways India Ltd. has become the third carrier in the group to fall behind on interest payments, Bloomberg News reported. EA Partners I, a vehicle created in 2015 to allow Etihad to provide funds to airlines in which it owned stakes, said in a statement that the Indian carrier failed to make a payment on March 19 on account of "temporary liquidity constraints." Etihad set up two vehicles, EA Partners I and II, which sold $1.2 billion of bonds to raise funds for several airlines.

India’s top-performing local corporate bond fund is making another contrarian bet after its decision to buy notes during last year’s liquidity squeeze in the market paid off, Bloomberg News reported. DSP Investment Managers’ corporate bond fund is adding to holdings of debt from non-banks even as the shock defaults by Infrastructure Leasing & Financial Services Ltd., sometimes called India’s mini-Lehman moment, still hang over the sector’s debt. Those notes offer higher yield premiums than publicly owned companies.

More of India’s smaller banks may become acquisition targets if the regulator gives a nod to the proposed merger of Lakshmi Vilas Bank Ltd. and Indiabulls Housing Finance Ltd., according to Credit Suisse Group AG analysts. If approved, the deal would be the first example of a non-bank financial company like Indiabulls Housing merging with a bank, following the 2016 relaxation of Reserve Bank of India rules, Bloomberg News reported.

Jet Airways’ creditors have launched a last-ditch attempt to find an investor to bail out the beleaguered Indian airline, which is in severe financial crisis after months of negotiations failed to secure fresh funds, the Financial Times reported. In a statement released on Thursday, a group of lenders said that they intended to follow a bank-led rescue plan and invited expressions of interest to buy a stake in the carrier, setting a short window of April 6-9 for submissions. The lenders warn that if no investor comes forward “other options may be considered”.

The Reserve Bank of India will issue new rules for resolving bad debts after the nation’s top court struck down an earlier directive that tightened rules for stressed asset resolution, Bloomberg News reported. The central bank “will take necessary steps including issuance of a revised circular as may be necessary for expeditious resolution of stressed assets,” RBI Governor Shaktikanta Das told reporters in Mumbai on Thursday.

Vijay Mallya, the ex-billionaire known as the “king of good times” in India, may have to prepare for a bout of relative austerity as he fights multiple lawsuits against creditors, Bloomberg News reported. Mallya’s lawyers told State Bank of India, which is among lenders owed 1.142 billion pounds ($1.5 billion) by his defunct Kingfisher Airlines, that their client is willing to cut his spending to 29,500 pounds a month, SBI’s lawyers told a London court Wednesday. He is currently spending about 18,300 pounds a week.

Jet Airways India Ltd., one of the country’s biggest carriers, is on life support. A bailout plan proposed by its lenders is in limbo, more than 80 percent of its fleet is grounded, staff salaries are delayed and it’s missed payments to banks and leasing companies, Bloomberg News reported. The clock is ticking for one of the country’s most visible companies at a sensitive time, with India’s general election just weeks away. The chairman of the debt-ravaged airline has resigned and emergency funding from lenders has yet to materialize.

You don’t adopt a modern insolvency law in the expectation of damaging the credibility of your central bank. But that’s just what has happened in India. The country’s Supreme Court on Tuesday struck down a controversial 2018 directive from the Reserve Bank of India, which gave lenders a 180-day deadline to resolve nonperforming loans before having to refer the defaulting borrowers to a bankruptcy tribunal, a Bloomberg View reported. The verdict is a serious blow to the bank’s officials, who have been trying to tackle one of the world’s worst bad debt problems — with some early success.