Cabinet hikes ethanol prices by over Rs 5/litre to Rs 52.43 | WeForNews | Latest News, Blogs Cabinet hikes ethanol prices by over Rs 5/litre to Rs 52.43 – WeForNews | Latest News, Blogs
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Cabinet hikes ethanol prices by over Rs 5/litre to Rs 52.43

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Dharmendra Pradhan

New Delhi, Sep 12 (IANS) The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a hike in the price for procurement of ethanol by oil marketing companies (OMCs) by over Rs 3 increasing the rate for the clean fuel derived out of ‘B’ heavy molasses from the current Rs 47.13 per litre to Rs 52.43.

Briefing reporters here following a cabinet meeting, Petroleum Minister Dharmendra Pradhan said the CCEA had also decided to increase the ex-mill price of ethanol derived fully from sugarcane juice at Rs 59.13 per litre for those mills who will divert thier total sugarcane juice for ethanol production without producing any sugar.

A Petroleum Ministry release said the cabinet approved prices are valid for the sugarcane season from December 2018 to November 2019.

“The cabinet has given its approval to revise/fix the price of ethanol derived from B heavy molasses/partial sugarcane juice and fix a higher price for 100 per cent sugarcane juice based ethanol for the forthcoming sugar season 2018-19 during ethanol supply year from 1st December 2018 to 30th November 2019 to Rs 52.43 per litre (from prevailing price of Rs.47.13 per litre),” it said.

“The cabinet has also decided to fix the ex-mill price of ethanol derived from 100% sugarcane juice at Rs 59.13 per litre, from prevailing price of Rs 47.13, for those mills which will divert 100 per cent of sugarcane juice for production of ethanol, thereby not producing any sugar,” Pradhan said.

The government said the GST and transportation charges will also be payable, while OMCs have been advised to fix realistic transportation charges so that long distance transportation of ethanol is not disincentivised.

“The decision will serve multiple purposes of reducing excess sugar in the country, increasing liquidity with the sugar mills for settling cane farmers’ dues and making higher ethanol available for the Ethanol Blended Petrol (EBP) programme,” he said.

All distilleries will be able to take benefit of the scheme and a large number of them are expected to supply ethanol for the EBP programme, he added.

The EBP programme, started in 2003, aims to bring down India’s imports of petroleum products, for the country that imports over 80 per cent of its oil requirements.

The statement noted that as compared to ethanol derived from C heavy molasses, diversion of B heavy molasses reduces the sugar content by about 20 per cent and increases ethanol availability by about 100 per cent.

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Air India seeks bidders with net worth of Rs 3,500 cr

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Hardeep Puri

New Delhi, Jan 27 : Bidders for the national carrier, Air India will need to have a minimum net worth of Rs 3,500 crore — whether as sole bidder or a consortium.

The government on Monday kicked off the strategic disinvestment of Air India with Ernst & Young, transaction advisor issuing an expression of interest by the Government of India (GOI) for advising and managing the proposed strategic disinvestment of Air India Limited (AI) by way of transfer of management control and sale of 100 per cent equity share capital of AI held by GOI.

AI inter alia holds 100 per cent equity share capital of Air India Express Limited (“AIXL”) and 50 per cent equity share capital of Air India SATS Airport Services Private Limited (“AISATS”) (together with AI and AIXL referred to as “Companies”).

The Expression Of Interest (EOI) prescribes the financial capability conditions for the interested bidders. For submitting the EOI and for being considered for subsequent qualification for Stage II of the Proposed Transaction, the IB (whether a sole bidder or a Consortium) will have to satisfy the criteria of having a minimum net worth of Rs 35,000 million or Rs 3,500 crore.

Net worth means the aggregate value of the paid-up equity share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet.

The EOI also stipulates a minimum stake requirement in the consortium and company. Each member of the Consortium shall hold at least 10 per cent interest in the Consortium and at least 10 per cent equity share capital of the company (special purpose vehicle) to be promoted by the members of the Consortium for acquiring the GOI stake being disinvested in Air India.

The lead Member shall hold at least 26 per cent interest in the Consortium and at least 26 per cent of equity share capital of the company (special purpose vehicle) to be promoted by the members of the Consortium for acquiring the GOI stake being disinvested in Air India.

The net worth of each participating member (on their own or through its Affiliate) should be equal to or more than 10 per cent of the Net Worth/ACI requirement for the Consortium (i.e. 10 per cent of INR 35,000 million). However, if the member of the Consortium is a Scheduled Airline Operator in India, the condition to meet minimum share of Net Worth requirement shall not apply to such member provided interest (in Consortium) and equity shareholding of such member in the company (special purpose vehicle promoted by the members of the Consortium for acquiring the Company) is restricted to maximum of 51 per cent.

Where a sole bidder or a Consortium has submitted the EOI, it is expected that there shall not be any changes in the members of the Consortium or sole bidder will not form a Consortium except in specific conditions.

Any change prior to the EOI Deadline is permissible by withdrawing the EOI and submitting a fresh EOI before the EOI Deadline. However, no change in composition of Consortium will be permitted after the EOI deadline till the shortlisting of the Interested Bidders (IBs).

If after shortlisting of IBs, a Consortium bidder desires a change in the Consortium or a sole bidder desires to form a Consortium by inducting new members, it shall have to apply for approval for such change to the TA no later than 21 days from the date of issue of the Request For Proposal (RFP). Endeavour shall be made to provide approval or disapproval for such a change no later than 21 days from the date of receipt of such application by the TA.

The EOI has also laid down the lock-in provisions applicable for the proposed transaction. For a period of one year from the date of the closing of the Proposed Transaction, the Confirmed Selected Bidder (and/or the special purpose vehicle in case investment in AI is made through a special purpose vehicle) shall not, directly or indirectly, transfer any equity securities of AI held by it, including the legal or beneficial ownership thereof with or without any of its rights or obligations under the definitive documents, to any person.

The Confirmed Selected Bidder shall not, directly or indirectly, transfer any equity securities of the special purpose vehicle (in case investment in AI is made through a special purpose vehicle) held by them, including the legal or beneficial ownership thereof with or without any of its rights or obligations under the definitive documents, to any person.

AI shall not, directly or indirectly, transfer any equity securities of AIXL and AI-SATS held by it, including the legal or beneficial ownership thereof with or without any of its rights or obligations under the definitive documents, to any person.

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Sensex, Nifty in red; ICICI Bank up 2%

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Sensex equity Nifty

Mumbai: The benchmark Sensex opened 100 points lower on Monday as stock markets globally grew increasingly anxious about the economic impact of China’s spreading virus outbreak which has claimed 80 lives.

ICICI Bank share price rose 2 per cent in the early trade after company registered a healthy 158.4 per cent year-on-year (YoY) growth in Q3FY20 profit.

At 10.28 a.m., the Sensex was down 123.41 points at 41,489.78. It opened at 41,510.68 from its previous close of 41,613.19.

The Nifty was trading lower by 39.50 points at 12,208.75.

Global oil benchmark, the Brent crude index fell over 2 per cent to $59.39 a barrel on Monday as the death toll due to coronavirus rose sharply.

Chinese health authorities on Monday informed that 2,744 confirmed cases of pneumonia caused by coronavirus, including 461 in critical conditions, had been reported in the country.

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DIPAM invites bids for Air India sale with easy debt

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Air India Flight

New Delhi: The disinvestment department or DIPAM has invited an Expression of Interest (EoI) from potential investors for selling 100 percent of Air India and its stake in two subsidiaries with easy bidding norms of debt and eligibility, in its second attempt to privatise the debt-laden state-run airline.

The deadline for submission of EoI for 100 per cent divestment in Air India and the airline’s stake in low-cost unit Air India Express and airport services company AISATS is March 17, according to a preliminary information memorandum issued by DIPAM on Monday.

Since the huge debt had proved unattractive for potential bidders, now, the government has relaxed bidding norms to coax investors to buy the airline. The bidding party will have to bear with only Rs 23,286 crore of the total Rs 60,000 crore debt of Air India.

As for eligibility, the lead member of a consortium can have 26 percent shareholding. The earlier criterion set a holding of 51 percent in a consortium. The minimum shareholding in a consortium has also been eased to 10 percent, potentially enabling more entities to bid as part of a consortium.

The net worth for eligible bidders has been relaxed to Rs 3,500 crore from Rs 5,000 crore.

Air India Express is a wholly-owned subsidiary of Air India. The airline owns 50 percent of AISATS. Individuals and consortia can bid for the airline.

The government has struggled at least twice in the past two years to privatise loss-making Air India due to a lack of interest from bidders.

One reason for the failure was that the government was unwilling to fully exit the airline, looking to sell only 76 percent stake.

The PIM says AI has an aircraft fleet of 121 aircraft (excluding 4 B747-400 aircraft) as on November 1, 2019, mainly comprising Airbus and Boeing aircraft such as A-319, A320, A-321, B-777 and B-787 out of which 65 are owned/on finance lease/bridge loans, 21 are on sale and lease back model and balance 35 are on operating lease.

Consolidated business in the past had a mix of real estate and aviation interests.

Government of India is now carving out real estate assets and other businesses which are not integral to the core airline business into a separate SPV along with part transfer of certain debt and liabilities (modalities have been worked out) thereby resizing the balance sheet, it said.

Earlier this month, the Home Minister Amit Shah-led GoM approved draft for inviting bids.

In 2018, DIPAM did not receive any bid in its EoI for selling 74 per cent stake in Air India.

Prior to the EoI, the stressed airline invited bids for monetizing its land and building assets through MSTC e-auction for sale of its properties across the country including Air India Holiday Home in Lonavala, many residential plots in Mumbai’s upscale areas like Bandra, Khar, Prabhadevi, flats in Asian Games village in delhi, many commercial land, buildings, flats in Bhuj, Bengaluru, Kolkata, Nashik, Pune and Trivandrum.

Cushman & Wakefield is the Property Advisor and the realty consultant of Air India.

The bids closing date is January 31, 2020. Transaction adviser EY is learnt to have advised government that for non-receipt of bids last year included the government’s decision to retain 24 per cent stake and corresponding rights, high amount of allocated debt and profitability track record and all these, sources said have been now taken care of.

Air India’s net loss in 2018-19 is provisionally estimated to be Rs 8,556.35 crore.

The government has been pumping money and hived off some debt to keep the airline aloft and ready for sale.

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