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Petrol, diesel see big price hikes on Sunday

Petrol and diesel prices have increased by more than Rs 2 per litre each during January.

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New Delhi, Jan 20 (IANS) Transport fuel rates were hiked sharply on Sunday as global crude oil rates continued to climb handsomely following the implementation of output cuts by global oil producers from January 1.

State-run oil marketing companies increased petrol rates by 23 paise per litre while diesel prices went up by 29-31 paise across the four major metros, making it among the sharpest hikes ever since rates had been rising this month following a prolonged period of fall.

Petrol and diesel prices have increased by more than Rs 2 per litre each during January.

As per data from Indian Oil Corp, petrol price in Delhi was increased to Rs 70.95 per litre on Sunday while in Kolkata, Mumbai and Chennai the fuel cost Rs 73.05, Rs 76.58 and Rs 73.65 respectively.

Similarly, the price of diesel went up on Sunday in the national capital to Rs 65.45 per litre.

In Kolkata, Mumbai and Chennai, diesel sold at Rs 67.23, Rs 68.53 and Rs 69.14 a litre respectively.

With petroleum products being outside the GST regime, prices vary as a result of local taxes.

As per the country’s dynamic pricing mechanism, the domestic fuel prices depend upon international fuel prices on a 15-day average and the value of the rupee.

Following the implementation of production cuts by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers, global crude rates have been hardening and the UK Brent crude closed over the weekend at over $62 a barrel after having fallen below $50 last month.

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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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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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