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No bail-out for Jet Airways: Suresh Prabhu

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New Delhi, Nov 19 : The Centre on Monday said it would not bail out cash-strapped Jet Airways, stating that it’s the responsibility of the management to implement policies to ensure financial stability and a smooth functioning of the airline.

According to Civil Aviation Minister Suresh Prabhu, the government looks at sector-specific issues in the current deregulated policy environment.

Prabhu was answering questions on a possible bail-out package for the private airline at the launch event of the upgraded version of “AirSewa 2.0 web portal and mobile app” here.

Civil Aviation Secretary R. N. Choubey said the airline wanted some time to pay charges levied by airport operators.

Choubey said the issue had to be sorted out between the airline and airport operators and that the ministry has no role in such commercial deliberations.

Currently, the airline is facing financial troubles due to an increase in jet fuel prices, a weaker rupee, and low fares.

On November 16, Tata Sons, the holding company of the Tata Group firms, said discussions on acquiring a stake in the financially-troubled airline were at a preliminary stage.

On Air India’s financial woes, Choubey said the airline was being given support from “time to time”.

He further said that the airline’s performance was being monitored.

Last month in Hyderabad, the secretary had said that a revival package for the debt-ridden national carrier had nearly been finalised and that the government was providing all support to Air India to ensure that it remained a viable entity.

On August 7, Parliament had approved the gross additional expenditure of Rs 980 crore for equity infusion into the heavily indebted airline.

(IANS)

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PF funds’ investment in IL&FS bonds have no government guarantee: Finance Ministry

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New Delhi, Feb 19 (IANS) The provident and pension fund trusts that invested in the IL&FS bonds now fear loss of money as the debt-ridden company’s bonds are unsecured debt, and the Finance Ministry says superannuated bonds do not carry any government guarantee and all such instruments have to face all market-related risks.

“Since these are investments in bonds, the government does not ensure any guarantee on them as such and if these are invested in stock markets, they carry the market risks as applicable. It is between the bond issuer and bond holders…,” the Finance Ministry said in response to IANS queries.

Thousands of crores of money of more than 15 lakh employees of both public and private sector companies have exposure to IL&FS bonds.

However, queries sent to the EPFO Commissioner and Labour Minister Santosh Gangwar remained unanswered.

Over 50 funds that manage retirement benefits of over 15 lakh employees have exposure to IL&FS. PF trusts of state electricity boards, public sector undertakings (PSUs) and banks are among them. The provident and pension fund trusts have filed intervening applications in the National Company Law Appellate Tribunal (NCLAT) stating that they stand to lose all the money since the bonds are under unsecured debt.

Usually, retirement funds have a low-risk appetite and invest in “AAA” rated bonds (which IL&FS bonds used to be once upon a time) and get assured returns with low interest rates.

The worries of pension and provident fund trusts come from the classification of IL&FS profiling its companies as to which can meet the dues obligations. Many important trust managing funds of PSUs like MMTC, IOC, Hudco, SBI and IDBI are among those filing petitions. From private sector, HUL and Asian Paints are among the petitioners.

IL&FS is currently under resolution process at the National Company Law Tribunal (NCLT). The process will decide under Section 53 of the IBC the order of priority for distribution of proceeds of the process.

The beleaguered company has informed the NCLT that of the 302 entities in the group, 169 are Indian companies, out of which only 22 are emerging as those which can meet all obligations (green), while 10 firms can pay to only secured creditors (Amber). There are 38 companies of IL&FS (red) which cannot meet any obligations of payment, and 120 entities are still being assessed.

These PF and provident funds trusts are worried that if payment is limited to secured creditors, then only financial creditors like banks will receive the dues while unsecured bond-holders will be get any payments.

IL&FS bonds attracted investments by PF trusts as it had the shareholding of SBI and LIC giving its bonds the comfort factor.

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Sachin Bansal invests Rs 650 crore in Ola

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Bengaluru, Feb 19 (IANS) Internet entrepreneur and Flipkart co-founder Sachin Bansal has invested Rs 650 crore, or about $92 million, in ride-hailing platform Ola in his personal capacity as investor, the company said in a statement on Tuesday.

This investment is part of Ola’s larger Series J funding round. It is also the largest investment by an individual in Ola to date, it said.

“Ola is one of India’s most promising consumer businesses that is creating deep impact and lasting value for the ecosystem. On one hand, they have emerged as a global force in the mobility space and on the other, they continue to build deeper for various needs of a billion Indians through their platform, becoming a trusted household name today,” Bansal said.

He further said he has known Ola founder Bhavish Aggarwal as entrepreneur and friend over the years and that he has great respect for what he and the team at Ola have built in 8 years.

“We are extremely thrilled to have Sachin onboard Ola as an investor. Sachin is an icon of entrepreneurship and his experience of building one of India’s most respected businesses ground up, is unparalleled,” Ola CEO Bhavish Aggarwal said.

Ola integrates city transportation for customers and drivers onto a mobile technology platform ensuring convenient, transparent, safe and quick service fulfilment, the statement added.

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Sensex ends lower for ninth consecutive day; IT finish 2% lower

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Sensex equity Nifty

Mumbai, Feb 19: Major indices Sensex and Nifty fell for the ninth consecutive trade session on Tuesday after heavy selling in the final hour of the trade on account of profit booking.

Initially investor sentiments were upbeat owing to the transfer of interim dividend from the RBI to the government and a possibility of easing trade tension as a new round of trade talks between the US and China are set to begin.

However, other factors like high crude oil prices in the range of $66-67 per barrel, weak rupee and continued tensions between India and Pakistan capped the gains.

“Though the amount is not huge but it is a breather for the government keeping in mind the fiscal deficit. Markets rejoiced as the RBI dividend will make way in the markets through welfare spending which will in turn boost rural consumption,” Saurabh Jain, AVP, SMC Global, told IANS.

Also, a sharp decline in IT stocks, closing over 2 per cent lower, dragged the markets which analysts said was the result of profit booking.

“Market opened on a positive note as transfer of interim dividend from RBI helped the indices to rebound after days of correction. However, the reversal was short-lived due to mixed global market and investor strategy to book profit on every rally,” said Vinod Nair, Head of Research, Geojit Financial Services.

“Albeit, rate sensitive sectors stand positive due to the stimulus measures from RBI and reforms by the government.”

The BSE Sensex closed 145.83 points or 0.41 per cent lower at 35,352.61 from its previous close of 35,498.44 while the Nifty settled at 36.60 points lower at 10,604.35.

Top Sensex gainers was led by Vedanta which jumped over 3 per cent followed by ICICI Bank, ONGC, Mahindra and Mahindra and Larsen and Toubro.

TCS declined by 3.39 per cent, the most on Sensex, followed by NTPC, IndusInd Bank, IndusInd Bank, Infosys and HeroMoto Corp.

IANS

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