RESTRUCTURING
Sri Lanka reaches deal on debt restructuring with bilateral creditors including India, China and France
Sri Lankan President Ranil Wickremesinghe announced a debt restructuring deal with India, France, Japan, and China, a critical step in economic recovery after the 2022 debt default. Under an IMF bailout program, the agreement is expected to revive stalled foreign projects. Sri Lanka declared bankruptcy in 2022 due to economic mismanagement, COVID-19 impacts, and tax cuts. The deal defers loan payments until 2028 and extends repayment until 2043. Supporters celebrated the announcement in Colombo as it promises to restart crucial infrastructure projects.
Yes Bank restructures workforce, lays off 500 employees in cost-cutting move
While the layoffs have happened across several verticals ranging from wholesale to retail, the branch banking segment saw a large impact, one person cited above said. The people sacked have been given severance pay amounting to three months’ salary. “Yes Bank has launched an internal restructuring exercise at the advice of a multinational consultant. So far, around 500 have been asked to go and we can see more sackings in the coming weeks,” a person aware of the development said.
NCLT approves Raymond group entities’ strategic demerger, amalgamation
The National Company Law Tribunal (NCLT) has approved Raymond’s composite scheme of arrangement and restructuring, involving the demerger of its lifestyle business and the amalgamation of its consumer trading arm. The approval paves the way for a focused and streamlined corporate structure, separating Raymond Ltd and Raymond Lifestyle, with the integration of Ray Global Consumer Trading. Shareholders will receive equity shares based on the swap ratio post-restructuring.
IBC helps personal guarantors resolve financial stress: MCA
The Insolvency and Bankruptcy Code (IBC) provides opportunities for defaulting firms and personal guarantors to restructure debts. The Ministry of Corporate Affairs (MCA) emphasized the importance of trust in financial transactions and highlighted the benefits of the IBC for resolving financial difficulties. Data from the Insolvency and Bankruptcy Board of India (IBBI) shows a high number of applications for the insolvency resolution process of personal guarantors to corporate debtors.
Amazon aggregator Thrasio emerges from bankruptcy, appoints CEO
Fox, previously the company's chief operating officer, would succeed Greg Greeley, who would step down from the position after the company completes its global restructuring.
Ford plans further job cuts in Europe, German works council says
Ford Germany did not immediately respond to Reuters' request for comment. Ford has already halfway completed its previous restructuring plan of 2,300 job cuts in Germany, reducing the staff number in the country to 13,000, according to Gruschka.
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Bad loan restructuring emerges to be a better option for ARCs
In FY24, asset reconstruction companies saw a shift towards prioritising loan restructuring over asset sales, focusing on value maximisation and revival potential. This strategic change reflects the evolving role of ARCs in the resolution of bad loans, as they adapt to new credit loss provisioning standards and offer more flexible repayment options.
Startups’ pink slip count falls to 10,000 amid funding blues
Firing in first half of 2024 lesser than H2, H1 of ’23, signalling a slight recovery. Ola Electric is in the final stages of laying off over 600 after sister company Ola Cabs fired around 200 workers in late April. Industry executive told ET, even with the slowdown in layoffs, startups are still not out of the woods.
Paytm shares soar over 8% after laying off employees as part of group restructuring
Paytm has been facing regulatory trouble after the RBI barred Paytm Payments Bank Ltd from accepting more deposits from February 29, owing to non-compliance. After declining 51% in the last one year, Paytm saw some positive action with the shares rising 13% this month.
Paytm lays off employees as part of restructuring, facilitates outplacement support
Paytm's sales employee headcount in March 2024 quarter dropped by about 3,500 to 36,521 personnel on a quarter-on-quarter basis, mainly due the impact of the Reserve Bank of India's ban on services of Paytm Payments Bank.
IMF lauds Sri Lanka for strong progress
Sri Lanka's macroeconomic policy reforms are showing positive results as the IMF anticipates agreements with external commercial creditors soon, signaling progress towards the country's $2.9 billion bailout program. The International Monetary Fund praised Sri Lanka's advancements in debt restructuring, highlighting the nation's strong efforts in addressing its financial challenges.
IDBI Bank seeks ROC help over nominee director dispute with NTADCL
IDBI Bank has raised governance concerns over the exclusion of nominee directors from board meetings of New Tirupur Area Development Corporation Ltd (NTADCL) post-loan repayment. Despite provisions allowing their retention until all dues are settled, the directors were excluded, leading IDBI Bank to write to the Registrar of Companies (ROC). NTADCL, which underwent Corporate Debt Restructuring in 2011, excluded IDBI Bank and SBI's nominee directors, citing vacancy due to loan repayment. IDBI Bank seeks ROC's intervention to assert its right to retain Nominee Directors until all dues are cleared, citing clauses in the MRA, AoA, and Companies Act, 2013.
BNPL startup Simpl undertakes another round of layoffs, rejigs senior leadership
Simpl, a Bengaluru-based consumer credit startup, laid off 30 employees after firing 160 executives. Senior executives Vatsal Jain, Ashwini Ravindranath, and Ramkumar Narayanan resigned. Earlier in April 2023, the BNPL startup let go 25% of its workforce or around 150 employees.
ZEE board approves raising upto Rs 2,000 crore through equity or other modes
ZEE's board approved raising up to Rs 2,000 crore via equity shares or eligible securities in one or more tranches. This move follows the collapse of the $10 billion Sony merger in January. The company aims to bolster finances after announcing cost-cutting measures, including workforce reduction.
ZEE to consider fundraising proposal via equity or other modes on June 6
"A meeting of the Board of Directors is scheduled to be held on June 6 to consider raising of funds by way of issuance of equity shares and/or any other eligible securities through permissible modes, including but not limited to a private placement, a qualified institutions placement, preferential issue, or any other method or combination of methods," the company said in a filing.
Angel One to undertake corporate restructuring, create holding company
Angel One, the country’s third largest stock broker, is set to undertake a major corporate restructuring exercise, according to two people in the know. Angel One is setting up a holding company under which all its different business entities will be held as subsidiaries.
Tata Steel's UK business likely to make operating profit in H2, says CEO T V Narendran
"We don't expect demand in UK to shrink beyond what it is. We will be at least $150 per tonne cheaper in the cost of production. This changes our cost position, and we will not start losing money in the UK every time steel prices drop," Narendran said in an interview with ET.
Local smartphone maker Lava rejigs board
Lava International has restructured its board, elevated leadership members, and added two independent directors. The move follows co-founder Hari Om Rai's resignation from the board following the Vivo money laundering case. The company plans to raise Rs 500-600 crore in the next fiscal, aiming to challenge Chinese domination in the smartphone market.
Non-mortgage security receipts formed 90% of the fresh issuances in 2023: India Ratings
In 2023, non-mortgage security receipts dominated fresh issuances, driven by retail non-mortgage bad loans, per India Ratings. Asset Restructuring Companies (ARCs) must enhance recovery infrastructure to handle this shift. Legal resolutions improved for corporate and SME bad loans, but retail loan recoveries remain crucial. ARCs adapt strategies amid evolving NPL dynamics and anticipate legal reforms to transform the recovery landscape
NCLT rejects JM Financial Asset Reconstruction's plea in Arch Pharmalabs case...
The National Company Law Tribunal dismissed JM Financial Asset Reconstruction's application to intervene in an insolvency resolution application filed by Bank of Baroda against Arch Pharmalabs.
Strong demand tailwinds are for all the players: 5 small and midcap real-estate stocks with upside potential of up to 34%
Four years ago, the real estate industry was defined by excess inventory, over leveraged balance sheets and weak demand. Today, a housing project getting launched is getting sold within a few days. The average prices on a per square ft basis have inched upward very sharply in the last one year and still there is no dearth of demand. Now the question is whether this kind of sharp rise in demand is having an impact only on large players or also on mid-sized companies which are focussed in a region only. The fact is that in the case of sectors like real estate, when the tide of demand changes, it changes for every player, be it large or medium. Yes, when it comes to medium-sized players it would be important to look at the players where they have a track record of implementing projects on time. Delivering the project on time is key metrics which determines whether the company which is mid-sized today will become large or not in years to come. As the large ones have seen a sharp rise in the valuations, the focus of the street is now also on mid-sized by well managed companies.
Homebound startups restructure; offline push by D2C brands
Happy Wednesday! Homegrown startups are stepping on the pedal for their move back home. This and more in today's ETtech Morning Dispatch.
Flipback Tax: Razorpay restructures to cut levy; Groww pegs tax outgo at $70 million
US-registered Razorpay is quickening plans to shift its domicile to India. For the same, it has initiated a restructuring exercise through which half a dozen India units are being brought under one holding company.
Staying with stronger ones is always better option: 5 Midcap stocks from different sectors with upside potential of upto 42%
In its lifetime every midcap company sees some headwinds. There are many examples from history which show the difference between the companies which have been able to survive and grow even after all the trouble is that of the parent company. A company belonging to a strong industrial group which has a track record of handling many economic cycles in the past has a higher probability of surviving a bad phase and coming back on a growth path as compared to a company in the same line of business which does not have the backing of a strong parent. The reasons are simple, when that midcap company of a large group will see a tough time, at a group level there is management bandwidth in terms of both financial and human resources to help it over bad times. Look over the last two decades at how companies like Voltas, Tata chemicals, which at one point if time were mid sized companies because large and stable business. So, if one is looking at investing in mid-cap, surely have a look if it has the back of a large and strong industrial house.
Donald Trump wants to control the Justice Department and FBI. His allies have a plan
Donald Trump's allies aim to reshape the Justice Department to align with conservative causes, potentially compromising its independence and core values in a second Trump presidency.
DXC Technology tumbles 18% as investors fret over latest restructuring plan
Shares of DXC Technology slumped 18% on Friday, after the IT services provider unveiled a new revamp and forecast fiscal 2025 revenue and profit below estimates.
Newly privatised Toshiba to cut 4,000 jobs in restructuring drive
Toshiba announces plans to cut up to 4,000 jobs in Japan as part of restructuring efforts following its takeover by a consortium led by Japan Industrial Partners. The move aims to accelerate the turnaround of the conglomerate, reflecting a broader trend of companies resorting to job cuts amid economic challenges.
IMF urges Pakistan to bring reforms to energy sector
IMF presses Pakistan for energy reforms, debt targets, and subsidy cessation. Ongoing talks with IMF for a new loan program and budget plans to address financial challenges and stabilize the energy sector.
Indian techie gets laid off from Telsa after getting promoted a month ago; Brother shares 'cold email' from Elon Musk
Tesla's recent layoffs, including an Indian techie, have sparked controversy. The techie, who was promoted just a month before, faced unexpected termination due to restructuring. The layoffs are part of Tesla's efforts to reduce its workforce by 10% amid sales challenges. Jatin Saini, the techie's brother, criticized Tesla for its lack of transparency and empathy in the process. Despite the layoffs, Tesla's shares saw a 1.97% gain on 7 May, reaching USD 184.76.
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