India

Jet Airways India Ltd., once India’s second-biggest airline, is flying just about a third of its fleet because its inability to pay lessors is grounding aircraft, Bloomberg News reported. The number may drop further, the nation’s airline regulator said. The company has 41 planes available, according to a statement released by the Directorate General of Civil Aviation after it reviewed Jet Air’s performance in New Delhi Tuesday. The beleaguered airline, which has a fleet of 119 as per its website, has been forced to ground planes as it awaits restructuring of its debt.

Asia’s richest man Mukesh Ambani has helped his younger brother avert a stint in jail, stepping in to make an $80 million payment for his sibling whose telecom-to-infrastructure empire is struggling with debt, Bloomberg News reported. The embattled former billionaire, Anil Ambani, thanked his brother Mukesh and sister-in-law after Anil’s Reliance Communications Ltd. completed the required 5.5 billion rupee ($80 million) payment to a local unit of Ericsson AB for past maintenance services provided to his group.

Jet Airways Ltd said here on Monday it has grounded four more planes and would delay paying interest on maturing debt in a fresh sign of deepening liquidity crisis engulfing the Indian carrier saddled with over $1 billion debt, Reuters reported. India's second-largest carrier has delayed payments to its pilots, suppliers and lessors for months and defaulted on loans, as it battles intensifying competition, a weak rupee and rising fuel costs. The airline said it will delay paying interest to its debenture holder, due March 19, owing to financial constraints.

Some lessors of India’s Jet Airways have begun terminating lease deals over unpaid dues and are preparing to move the leased planes abroad, escalating a crisis for the carrier, five sources with knowledge of the matter told Reuters. Two lessors have applied to the Directorate General of Civil Aviation (DGCA), India’s aviation regulator, to deregister at least five planes leased to cash-strapped Jet, three of the sources said, Reuters reported. Termination of lease agreements normally precedes applications made to the DGCA.

Shashikant Rathi, who has dominated India’s local bond underwriting business for over a decade at Axis Bank, says the industry now faces its biggest challenge since the global financial crisis, Bloomberg News reported. Shock defaults since last year by shadow bank IL&FS group and a new electronic bidding platform have disrupted the $108 billion market where underwriters like Rathi help companies raise money by selling debt securities. Sales of rupee corporate bonds that tend to pay the highest fees have fallen this quarter to a 2016 low.

Standard Chartered Plc may wind up losing less on its biggest bad loan in India. Lenders to bankrupt Essar Steel India Ltd. will consider increasing a payout to Standard Chartered to expedite the sale of the troubled Indian mill to ArcelorMittal, according to people with knowledge of the matter, Bloomberg News reported. That could smooth over a sticking point in months of court battles as the world’s largest steelmaker tries to open shop in the South Asian nation. Standard Chartered has been seeking repayment on about 35.6 billion rupees ($513 million) of loans to Essar Steel.

India’s debt-laden Jet Airways Ltd denied a media report on Monday that it had secured a 20.50 billion rupee ($293 million) loan from state-owned Punjab National Bank (PNB) to help pay overdue plane leasing fees and salaries, Reuters reported. The airline, which has had to ground planes after failing to make payments to leasing companies and is behind on paying pilots’ wages, said in a statement to the stock exchange that it has an existing credit facility of $300 million from PNB and that the bank has not provided any fresh credit.

India’s bankruptcy court on Friday approved global steel giant ArcelorMittal SA’s bid for debt-ridden Essar Steel, potentially ending months of court battles and opening the country’s steel industry to outsiders, Reuters reported. ArcelorMittal confirmed the National Company Law Tribunal (NCLT) had approved the takeover of the 10 million tonne steel plant of Essar Steel by itself and Japan’s Nippon Steel & Sumitomo Metal Corp, paving the way for the first major foreign participation in India’s steel sector.

Market Regulator SEBI on Friday came out with rules for providing exemption from open offer requirements for corporate debt restructuring, which will now be restricted to scheduled commercial banks and all-India financial institutions, Moneylife reported. The decision could help the cash-strapped Jet Airways which is looking for investment from lenders. The market watchdog met in Delhi on Friday and decided that "such exemptions will not be available for acquisition of shares by persons other than lenders by way of allotment by the target company or purchase from lenders".

Market regulator Securities and Exchange Board of India (Sebi) is considering to tighten the takeover rules that are applicable to firms undergoing bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC), Business Standard reported, citing sources. According to the BS report, the sources said that the regulator is planning to do away with the provision that lets a ‘competent authority’ to exempt an acquirer from the open offer requirement, CNBC reported on a Business Standard story.