Union Bank Of India Raises RS. 1,000 Crore Via Bonds

Public sector lender Union Bank of India on Tuesday said it has raised Rs. 1,000 crore by issuing bonds on private placement basis.

Oriental Bank of Commerce (OBC) said it will raise over Rs. 178 crore by selling stake to LIC.

"Union Bank of India has issued 10,000 basel III compliant Tier II bonds of face value of Rs. 10 lakh each aggregating to Rs. 1,000 crore on private placement basis," it said in a filing on BSE.

The bonds, issued for a 10-year tenure, bears 8.61 per cent per annum of coupon rate.

The bonds are rated IND AA by India Rating, the bank said.

OBC, in its Extraordinary General Meeting, held on Tuesday said it will issue and allot 2,15,48,758 equity shares at an issue price of Rs. 82.79 aggregating to Rs. 178.40 crore to LIC on preferential basis.

Tata Steel Says Puts Entire UK Business Up For Sale

Tata Steel, Britain's largest steelmaker, is considering the sale of its entire UK business to stem heavy losses, a move that would draw a line under its almost decade-long foray into Britain.

After a marathon board meeting in Mumbai, the steel giant said in a statement in the early hours of Wednesday that the financial performance of its UK arm had deteriorated substantially in recent months, after years of weak conditions.

Blaming high manufacturing costs, domestic market weakness and increased imports into Europe from countries like China, the company said it saw little change ahead for its UK plants.

Tata said its European arm would now "explore all options for portfolio restructuring, including the potential divestment of Tata Steel UK, in whole or in parts".

"Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe Board will be advised to evaluate and implement the most feasible option in a time-bound manner," it added.

Tata Steel bought Anglo-Dutch steelmaker Corus in 2007 and has since struggled to turn the giant around in the face of a deteriorating market, slashing costs and thousands of jobs.

The company said it remained in talks with the UK government and with investment firm Greybull Capital over the sale of its British long products unit, which makes steel for use in construction. Talks with Greybull were announced last year.

Sun Pharma Acquires 14 Brands From Novartis for Rs 1,940 Crore

Drug major Sun Pharma has forayed into the Japanese prescription market by acquiring 14 brands from Swiss drug firm Novartis for $293 million (over Rs 1,940 crore).

According to the agreements signed by the parties, a wholly-owned subsidiary of Sun Pharma will acquire the portfolio consisting of 14 established prescription brands from Novartis for a cash consideration of $293 million, Sun Pharma said in a statement.

"Japan is a market of strategic interest for us. This acquisition marks Sun Pharma's foray into the Japanese prescription market and provides us an opportunity to build a larger product portfolio in the future," Sun Pharma managing director Dilip Shanghvi said.

Under the terms of the agreements, Novartis will continue to distribute these brands, for a certain period, pending transfer of all marketing authorisations to Sun Pharma's subsidiary, it added.

The acquired brands will be marketed by a reliable and established local marketing partner under the Sun Pharma label. The local marketing partner will also be responsible for distribution of the brands, the company said.

The 14 brands have combined annualised revenues of around $160 million and address medical conditions across several therapeutic areas.

According to December-2015 IMS data, the size of the Japanese pharmaceutical market was estimated at $73 billion, accounting for over 7 per cent of the $1-trillion global pharmaceutical market.

Sell Sahara Real Estate To Repay Lakhs Of Investors, Says Supreme Court

The Supreme Court has asked the Securities and Exchange Board of India (Sebi) to start the process of selling some of embattled conglomerate Sahara's real estate assets in the country to refund millions of investors, lawyers said on Tuesday.

Sahara, a household name in India as the former main sponsor of the national cricket team, has major hotels overseas including the Plaza in New York and the Grosvenor House in London, besides vast real estate assets in India.

Its founder Subrata Roy was arrested in March 2014 after the company failed to comply with a court order to refund money raised from millions of small investors by selling them bonds later ruled to be illegal.

The country's top court in June last year said the group needed to repay the entire Rs 36,000 crore the court says it owes investors in illegal bonds.

Sahara has submitted to officials a list of 86 properties which it claims are worth Rs 40,000 crore. However, the firm claims that it has not been able to find buyers for the properties.  The Supreme Court said that Sebi should not sell the properties for less than 90 per cent of the circle rate - the listed market value. If bids are below 90 per cent of the circle rate, the regulator will have to take the permission of the court.

 The proceeds from the property sale will be used for securing bail of Sahara chief Subrata Roy, the top court said. Mr Roy has been in jail for nearly two years and has been unable to arrange Rs 10,000 crore for his bail, as ordered by judges.

Kapil Sibal, representing Sahara, argued, "Nowhere in the world this type of case has happened. There is no jurisdiction in the world that allows a person to be inside jail for two years without any charge."

Judges retaliated, "Don't lecture us. Nowhere in the world does a man say he has Rs 1.87 lakh crore in properties and still isn't paying (his dues)."

Government Sets Up Panel To Look Into Jewellers' Demand

The government has constituted a panel under former chief economic advisor Ashok Lahri to look into demand of jewellers who are protesting against imposition of 1 per cent excise duty on non-silver jewellery items.

The panel, which has been asked to submit its report in 60 days, will look into issues related to compliance procedure for the excise duty, including records to be maintained, forms to be filled, operating procedures and other relevant issues.

The sub-committee of a high level committee constituted earlier to suggest steps to sort out taxation problems being faced by trade and industry will have three representatives of the trade.

"All associations will be given an opportunity to submit representation before the Sub-Committee in writing and the all India associations to state their case in person," the Finance Ministry said in a statement today.

Even as major associations of the jewellery industry have called off their stir following assurance by the government to look into their concerns, a section of jewellers in the country continue to protest against the budget proposals.

Late Saturday, major associations, including All India Gems and Jewellery Trade Federation (GJF), All India Bullion and Jewellers Association (IBJA) and Gems Jewellery Export Promotion Council (GJEPC) called off strike after government's assurance that there would be no 'Inspector Raj'.

The Finance Ministry further said till the recommendations of the sub-committee are finalised there will be no arrest or criminal prosecution of any jeweller. There will also be no search and seizure of stocks by any central government officials.

Further, the Central Excise Officers will not visit the manufacturing units/ shops/ place of business/residence of the jewellers; and all payments of Central Excise duty will be based on first sale invoice value till committee's recommendations are finalised.

"The Central Excise authorities will not challenge the valuation given in the invoice provided the caratage / purity and weight of the gold/silver with precious stones; and carats of diamond/precious stones are mentioned on the invoice," the Ministry said.

Exporters will be allowed to export on self-declaration and submission of LUT to customs without the need to get LUT ratified by central excise, it said, adding "the prevailing system will continue".

Regarding composition of the sub-committee, the Ministry said there will be three representatives of the trade (to be decided by the Government); one legal expert; and officer concerned from the Ministry of Commerce and Industry. High level officials from the Central Excise Department will also be nominated by Central Board of Excise and Customs (CBEC).

In the Budget, the Central Excise duty at the rate of one per cent (without input tax credit) and 12.5 per cent (with input tax credit) has been imposed on all articles of jewellery (except for silver jewellery, other than those studded with diamond, ruby, emerald or sapphire).

Raghuram Rajan For New Global Pact To Deal With Monetary Policy Issues

RBI Governor Raghuram Rajan on Monday said the world is facing "increasingly dangerous situation" and a new international agreement on the lines of Bretton Woods is needed to prevent central banks from adopting policies that could hurt other economies.

"What I have in mind (is that we) will eventually require a new international agreement along the lines of Bretton Woods, and some reinterpretation of the mandates of internationally influential central banks," he said in a commentary posted on the website of Project Syndicate.

He said that central banks in developed countries find "all sorts of ways" to justify their policies, without acknowledging the unmentionable - that the exchange rate may be the primary channel of transmission.

"If so, what we need are monetary rules that prevent a central bank's domestic mandate from trumping a country's international responsibility," Rajan said.

Setting the rules will take time, he said, adding the international community has a choice.

"We can pretend all is well with the global monetary non-system and hope that nothing goes spectacularly wrong. Or we can start building a system fit for the integrated world of the twenty-first century," Rajan added.

He said the world is facing an increasingly dangerous situation and both advanced and emerging economies need to grow in order to ease domestic political tensions.

"If governments respond by enacting policies that divert growth from other countries, this 'beggar my neighbour' tactic will simply foster instability elsewhere. What we need, therefore, are new rules of the game," Rajan added.

The Bretton Woods conference led to the setting up of IMF, World Bank.

He said to bring growth back to pre-2008 levels, the remedy may be to write down the debt to revive demand.

"It is uncertain whether write-downs are politically feasible or the resulting demand sustainable. Moreover, structural factors like population ageing and low productivity growth - which were previously masked by debt-fuelled demand - may be hampering the recovery," Rajan said.

Politicians, he said, know that structural reforms - to increase competition, foster innovation, and drive institutional change - are the way to tackle structural impediments to growth.

"But they know that, while the pain from reform is immediate, gains are typically delayed and their beneficiaries uncertain," Rajan added.

All monetary policies have external "spillover" effects, Rajan said, adding circumstances today are, however, not normal and domestic demand may not respond to unconventional policy.

"To use a traffic analogy, policies with few adverse spillovers should be rated "green"; those that should be used temporarily could be rated "orange"; and policies that should be avoided at all times would be "red".

He said globally countries are far from having clear agreement on the colour of policies today, even with the best data, models, and empirical work.

"So we must begin a discussion. We could start with background papers from eminent academics and move on to multilateral institutions such as the International Monetary Fund and the G-20.

"There will be a lot of fuzziness initially, but discussion will lead in time to better models and data - and will push policymakers to stay out of the clearly red," he said.

Central bankers face a different problem: inflation that is flirting with the lower bound of their mandate.

"With interest rates already very low, advanced economies' central bankers know that they must go beyond ordinary monetary policy - or lose credibility on inflation. They feel that they cannot claim to be out of tools.

"If all else fails, there is always the 'helicopter drop' whereby the central bank prints money and sprays it on the streets to create inflation," he added.

He admitted that setting such a rule will take time. "But the international community has a choice. We can pretend all is well with the global monetary non-system and hope that nothing goes spectacularly wrong. Or we can start building a system fit for the integrated world of the 21st century".

US oil rises 2%, adding to gains after supplier meeting agreed

US oil futures rose more than 2 percent in early Asian trade on Thursday, adding to strong gains the previous session after the world's biggest suppliers firmed up plans to meet to discuss freezing output.

Oil producers including Gulf OPEC members support holding talks next month on a deal to keep production at current levels even if Iran declines to participate, OPEC sources said on Wednesday, increasing the likelihood of the first global supply deal in 15 years.

US crude was up 76 cents at USD 39.22 a barrel at 0136 GMT and earlier traded as high as USD 39.38.

The contract settled up USD 2.12, or 5.8 percent, at USD 38.46 a barrel on Wednesday, erasing the losses of the previous two trading days.

Brent crude rose 53 cents to USD 40.86.

On Wednesday, it finished up USD 1.59, or 4 percent, at USD 40.33 a barrel.

"A smaller than expected gain in inventories in the US also supported prices," ANZ said in a morning note.

US crude oil stocks rose last week to record highs for a fifth straight week, data from the Energy Information Administration showed on Wednesday.

Crude inventories increased 1.3 million barrels in the week to March 11 to 523.2 million, a much smaller build than the 3.4 million-barrel increase expected by analysts.

Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside the Organization of the Petroleum Exporting Countries will meet in Doha on April 17 to discuss plans for a freeze in output.

Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil production, support the initiative, the minister said.

Since the freeze was first proposed last month, prices have recovered about 50 percent from decade-low levels but been volatile without a firm meeting date. 

Air India may start making net profits from 2019

Air India is expected to start making net profits from 2019 and operational profits from the current fiscal on the back of better passenger yield and load factor, a top Civil Aviation ministry official said today.

"From December onwards, for the first time in about ten years, Air India has been consistently making operational profits. It is still making net loss, primarily because of the interest burden. But operationally, it is EBITDA positive," Rajiv Nayan Choubey, Secretary, Ministry of Civil Aviation, told reporters on the sidelines of India Aviation-2016 event.

He also said the recovery of the beleaguered airlines would be faster if oil prices continue to be low.

"The turnaround plan of Air India envisaged that it will turnaround by 2020. Now, it is likely to turnaround one-and-half years before 2020, which means it will make net profits by 2019 instead of 2020.

"If only the oil prices continue to rule soft, then of course we would be very happy...Air India's recovery would be much faster," Choubey said.

Replying to a query, he said the government has been pumping in about Rs 2,500 crore every year into the national carrier.

Civil Aviation Minister Ashok Gajapathi Raju said the new Civil Aviation Policy is at an advanced stage. The policy has been put up on the website and suggestions are called for.

"We are seeking guidance from some of the senior ministers also. There will be implications. We are hopeful that by April of next accounting year, the policy will be out," the minister said. (MORE) PTI GDK IAS VVK NSK ABM . 

Oil Prices May Drop To $25/Barrel: Moody's

Global oil and gas prices are likely to remain at current lows for several years, with oil dropping to USD 25 per barrel if Iranian production more than offsets supply cuts elsewhere, Moody's Investors Service said on Tuesday.

"Oil prices continue the decline that began in June 2014, reaching lows not seen in more than a decade. We currently expect oil and gas prices to remain close to current lows for several years, as excess supply in the market is slowly absorbed," it said.

Moody's estimated oil prices to be around USD 33 per barrel in 2016, which will rise to USD 38 a barrel in the next and to USD 43 in 2018.

US Henry Hub natural gas will average at USD 2.25 per million British thermal unit in 2016, rising to USD 2.50 next year and to USD 2.75 in 2018.

"Moreover, there are downside risks to these assumptions if an increase in Iranian production more than offsets supply cuts elsewhere," it said, adding that oil prices in that scenario may dip to USD 25 a barrel and gas to USD 1.75 per mmBtu.

The main cause of the low oil prices is an "inverse supply shock" as due to technological changes, excess investment in capacity, and geopolitical factors like OPEC's lack of agreement on curtailing supply, supply has outpaced demand even as demand has continued to grow, it said.

"Increased production now vastly exceeds growth in oil consumption, even with consumption growth by major consumers such as the US, China and India," it said.

Moody's said it expect exposure to low oil prices to shave off 0.8 per cent from real GDP growth on average across oil exporting countries in 2016 and to weigh further on the sluggish global growth prospects.

"For emerging markets overall, the combination of lower commodity prices, continued capital outflows, spillovers from slower Chinese growth, and country-specific domestic structural challenges have pushed down economic growth forecasts, "it said.

For over 40 per cent of emerging markets globally growth forecasts are now lower compared to four months ago. "We currently expect G-20 emerging markets growth of around 3.8 per cent in 2016 (GDP-weighted average), below the 4.0 per cent of 2015 and the 5.0 per cent growth of 2014. We expect growth to accelerate to 4.5 per cent in 2017."

For advanced countries, Moody's maintained its growth forecast broadly stable as the positive effects of lower commodity prices largely mitigate negative effects from trade linkages with emerging markets, negative wealth effects from the fall in equity markets, and negative impact of the financial market volatility on consumer and business confidence.

"We expect 1.8% real GDP growth for the G-20 advanced economies in 2016 - 0.3 per cent below our November 2015 expectation - and 2.0 per cent in 2017. Going forward, growth in advanced economies is similar to the 1.8 per cent of 2015 and the 1.8 per cent of 2014 (GDP-weighted average).

"Downside risks to global growth have increased as second-round effects from the fall in commodity prices, the slowdown in China, the slowdown in emerging markets and the financial markets turbulence are still working their way through the real economy," it said.

Stop Vijay Mallya From Leaving India, Banks Ask Supreme Court

A group of banks has asked the Supreme Court to stop liquor baron Vijay Mallya from leaving India because of the massive debt that his now-defunct airline owes.

The court is expected to take up the matter today on the request of the 17 creditor banks, including State Bank of India.

The businessman had earlier said that he wants to move to Britain to be closer to his children after his resignation as chairman of United Spirits, as part of his $75 million or Rs 515 crore settlement with spirits giant Diageo.

On Monday, the Debt Recovery Tribunal blocked the settlement, ruling in favour of the banks owed money by Mr Mallya's Kingfisher Airlines.

State Bank of India and other banks had demanded "first right" to the Diageo cash, arguing they had been left with massive unpaid debts of $1.4 billion or Rs 9,400 crore as of 2013, when the airline collapsed.

SBI is owed Rs 1,600 crore by Kingfisher.

Once dubbed "King of Good Times" for his extravagant lifestyle, Mr Mallya is also confronting a money-laundering case against him by the Enforcement Directorate for allegedly sending abroad Rs 900 crore that his airline borrowed from a bank.

Kingfisher, once India's second-biggest airline, stopped flying more than three years ago.

Mr Mallya said in a statement on Sunday that he is in talks with the banks for a one-time settlement of Kingfisher's debt.

A household name in India and the face of one of the country's most high profile collapses, Mr Mallya agreed to quitting Diageo-controlled United Spirits with a severance package following months of wrangling.

He was to receive $40 million or Rs 275 crore immediately and the remainder over five years.

Mr Mallya sold most of his stake in United Spirits to Diageo when his Kingfisher Airlines was grounded by debt and safety concerns, with staff left unpaid.

He said on Sunday that he had become a "poster boy" for bad loans when others owed much more than Kingfisher.

Kingfisher's creditor banks are set to auction a company property in India's financial capital Mumbai this month. But it is expected to fetch just a fraction of what they are owed.