India

Essar Global Fund’s decision to repay the last tranche of the secured debt at its group entities could have broader ramifications for Essar Steel, the conglomerate’s steel-making business whose future ownership would be decided by the dedicated bankruptcy court, The Economic Times reported. Some in the legal circles believe the move by Essar Group’s holding company could prompt lenders to consider the group’s last-minute offer to repay Rs 54,389 crore and wrest back the control of the debtladen Essar Steel, currently facing insolvency proceedings.

India’s central bank is open to infusing “need-based” liquidity into the financial system, Governor Shaktikanta Das said on Monday ahead of a meeting with the shadow banking sector, which has been hit hard by a funding crunch, Reuters reported. Government officials have pressed the Reserve Bank of India (RBI) over the past few months to ease lending and capital rules for banks and provide more liquidity to shadow banks.

Reliance Communications has deposited $18.6m at India’s supreme court in a “partial payment” to creditor Ericsson, which is pushing to have its chairman Anil Ambani imprisoned for alleged contempt of court, the Financial Times reported. Last week, the Swedish group filed a petition with India’s supreme court, accusing RCom of breaching a court order to pay $79m in unpaid dues. It alleged that the telecom company had “illegally pocketed” the proceeds of asset sales, instead of transferring funds to creditors.

Debt-laden Jet Airways India Ltd. is trying to renegotiate contracts with its vendors as lenders demand a revival plan by month-end from India’s second-largest airline by passengers, according to people with knowledge of the discussions, Bloomberg News reported. The Naresh Goyal-led airline is in talks to defer or reduce payments to vendors including aircraft lessors and those providing engineering, spare parts, credit card and airport services, said one of the people, who asked not to be identified as the discussions aren’t public.

India’s debt-laden Jet Airways is close to reaching a deal with State Bank of India for a fresh loan of 15 billion rupees ($215 million) to meet its working capital needs, two sources aware of the matter told Reuters. The airline has scheduled a meeting on Jan. 8 with its vendors and lessors, many of whom are getting increasingly concerned over non-payment of dues, and officials from State Bank of India (SBI) to discuss the debt restructuring plan, the first source with direct knowledge said, Reuters reported.

Swedish group Ericsson has asked India’s top court to send tycoon Anil Ambani to prison, after his troubled Reliance Communications allegedly breached a court order to pay $79m in unpaid dues, the Financial Times reported. RCom, once India’s most valuable telecom company, has been fighting to stave off bankruptcy for more than a year, after suffering a heavy loss of market share. Ericsson had originally claimed Rs11bn ($158m) in unpaid fees for outsourced management services, and launched insolvency proceedings against RCom last year.

Vijay Mallya, the Indian tycoon fighting multiple cases in the U.K. after defaulting on bank loans, was declared a "fugitive economic offender" by a special Mumbai court under a new law, television channels reported. Mallya is the first to be declared a fugitive under the new law, which gives authorities greater powers to seize and confiscate assets of economic offenders, according to CNN-News18 and India Today TV, Bloomberg News reported. The ruling comes on the back of Mallya losing a bid last month to avoid extradition to India from the U.K., where he is currently based.

India needs to resume subsidies on imported natural gas to help revive power plants that have been stranded for want of fuel and could turn into bad assets for banks, according to a lawmakers’ report, Bloomberg News reported. The federal government should supply the gas at lower than market rates by utilizing funds from the so-called Power System Development Fund or from the environment tax on coal, the Standing Committee on Energy said in its report on Friday. Imported gas for the plants was subsidized for two years through March 2017.

The National Company Law Appellate Tribunal on Thursday asked the Ahmedabad bench of the National Company Law Tribunal to expeditiously decide on the Essar Steel insolvency case, where ArcelorMittal emerged as the highest bidder, BloombergQuint reported. Essar Steel lenders led by the State Bank of India had filed an application with the tribunal seeking early approval of the resolution plan. The case has been running for about 500 days as against a maximum of 270 days allowed for a resolution under the Insolvency and Bankruptcy Code.

All Jet Airways India Ltd. ever needed was 1 rupee, or just 1.4 U.S. cents, for providing hot meals and cold towels. Since even that modest goal has proven elusive, India’s longest-surviving private airline now needs bankers with spine to keep flying. It’s been clear for some time that Jet, falling behind even on pilots’ wages, was going to skip a debt payment soon. Now that a default on bank loans has finally happened, let’s spend a minute on the brutal economics of the missing rupee, a Bloomberg View reported.