Thursday, March 26, 2009
Obama sees signs of progress on economic crisis, urges patience
Obama sees signs of progress on economic crisis, urges patience
The Economic Times, March 26, 2009, Page 9
Insists Dollar Is ‘Extraordinarily Strong’ & There Is No Need For A Single Global Currency
Reuters WASHINGTON
PRESIDENT Barack Obama said on Tuesday he was seeing signs of progress in his drive to lead the United States out of economic crisis as he sought to reassure recession-weary Americans he was on the right track.
"We're moving in the right direction," Obama said at his second prime-time White House news conference since taking office on January 20.
Knocked off stride by public anger over hefty corporate bonuses and facing skepticism about his massive budget plan, Obama moved to regain his political footing and refocus attention on his broader economic agenda. He made his case to the American people the same day he pressed for coordinated action among the world's major economies, and just a day after unveiling a trillion-dollar plan to soak up toxic bank assets at the root of the global financial meltdown.
Obama took the podium after US stocks slid while investors paused to reassess the government's latest effort to clean up bank balance sheets. Initial euphoria over the plan had driven stocks sharply higher on Monday.
Though the economy was in the spotlight, Obama's news conference also gave him a chance to lay some groundwork a week before he makes his debut on the world stage with his first major presidential trip overseas. Brushing aside suggestions the G20 summit of major economies in London on April 2 would find him at odds with European partners, Obama said he expected leaders to share common goals of boosting growth and updating antiquated financial regulations while avoiding trade protectionism.
Focusing on the economy, Obama said, "We've put in place a comprehensive strategy designed to attack this crisis on all fronts. It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."
The administration has recently cited glimmers of improvement in the devastated housing market, but most key economic indicators remain under extreme stress.
Mindful of the challenges he faces, Obama tempered his economic outlook. "There are no quick fixes and there are no silver bullets," he said. He insisted that despite US economic troubles, the dollar was "extraordinarily strong" due to confidence in America's economic prospects and said there was no need for a single global currency — a suggestion recently put forth by China and Russia.
Obama kept a serious demeanor during the back-and-forth with reporters but became testy when pressed on the AIG scandal. Asked why he delayed his own condemnation of the AIG payouts, the president, who has cultivated a ‘No-drama Obama image, said tersely, "It took us a couple of days because I like to know what I'm talking about before I speak."
US economic plans ‘a way to hell’: EU presidency
A TOP European Union politician on Wednesday slammed US plans to spend its way out of recession as "a way to hell". Czech Prime Minister Mirek Topolanek, whose country currently holds the EU presidency, told the European Parliament that President Barack Obama's massive stimulus package and banking bailout "will undermine the stability of the global financial market."
A day after his government collapsed because of a parliamentary vote of noconfidence, Topolanek took the EU presidency on a collision course with Washington over how to deal with the global economic recession.
Most European leaders favour tighter financial regulation, while the US has been pushing for larger economic stimulus plans.
Topolanek's comments are the strongest criticism so far from a European leader as the 27-nation bloc bristles from recent US criticism that it is not spending enough to stimulate demand. Topolanek bluntly said that "the United States did not take the right path".
He slammed the US' widening budget deficit and protectionist trade measures — such as the "Buy America" — and said that "all of these steps, these combinations and permanency is the way to hell."
"Americans will need liquidity to finance all their measures and they will balance this with the sale of their bonds but this will undermine the stability of the global financial market," said Topolanek. — AP/Strasbourg
The Economic Times, March 26, 2009, Page 9
Insists Dollar Is ‘Extraordinarily Strong’ & There Is No Need For A Single Global Currency
Reuters WASHINGTON
PRESIDENT Barack Obama said on Tuesday he was seeing signs of progress in his drive to lead the United States out of economic crisis as he sought to reassure recession-weary Americans he was on the right track.
"We're moving in the right direction," Obama said at his second prime-time White House news conference since taking office on January 20.
Knocked off stride by public anger over hefty corporate bonuses and facing skepticism about his massive budget plan, Obama moved to regain his political footing and refocus attention on his broader economic agenda. He made his case to the American people the same day he pressed for coordinated action among the world's major economies, and just a day after unveiling a trillion-dollar plan to soak up toxic bank assets at the root of the global financial meltdown.
Obama took the podium after US stocks slid while investors paused to reassess the government's latest effort to clean up bank balance sheets. Initial euphoria over the plan had driven stocks sharply higher on Monday.
Though the economy was in the spotlight, Obama's news conference also gave him a chance to lay some groundwork a week before he makes his debut on the world stage with his first major presidential trip overseas. Brushing aside suggestions the G20 summit of major economies in London on April 2 would find him at odds with European partners, Obama said he expected leaders to share common goals of boosting growth and updating antiquated financial regulations while avoiding trade protectionism.
Focusing on the economy, Obama said, "We've put in place a comprehensive strategy designed to attack this crisis on all fronts. It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."
The administration has recently cited glimmers of improvement in the devastated housing market, but most key economic indicators remain under extreme stress.
Mindful of the challenges he faces, Obama tempered his economic outlook. "There are no quick fixes and there are no silver bullets," he said. He insisted that despite US economic troubles, the dollar was "extraordinarily strong" due to confidence in America's economic prospects and said there was no need for a single global currency — a suggestion recently put forth by China and Russia.
Obama kept a serious demeanor during the back-and-forth with reporters but became testy when pressed on the AIG scandal. Asked why he delayed his own condemnation of the AIG payouts, the president, who has cultivated a ‘No-drama Obama image, said tersely, "It took us a couple of days because I like to know what I'm talking about before I speak."
US economic plans ‘a way to hell’: EU presidency
A TOP European Union politician on Wednesday slammed US plans to spend its way out of recession as "a way to hell". Czech Prime Minister Mirek Topolanek, whose country currently holds the EU presidency, told the European Parliament that President Barack Obama's massive stimulus package and banking bailout "will undermine the stability of the global financial market."
A day after his government collapsed because of a parliamentary vote of noconfidence, Topolanek took the EU presidency on a collision course with Washington over how to deal with the global economic recession.
Most European leaders favour tighter financial regulation, while the US has been pushing for larger economic stimulus plans.
Topolanek's comments are the strongest criticism so far from a European leader as the 27-nation bloc bristles from recent US criticism that it is not spending enough to stimulate demand. Topolanek bluntly said that "the United States did not take the right path".
He slammed the US' widening budget deficit and protectionist trade measures — such as the "Buy America" — and said that "all of these steps, these combinations and permanency is the way to hell."
"Americans will need liquidity to finance all their measures and they will balance this with the sale of their bonds but this will undermine the stability of the global financial market," said Topolanek. — AP/Strasbourg
Cut costs to face India, China challenge: Obama
Cut costs to face India, China challenge: Obama
The Financial Express, March 26, 2009, Page 11
WashingtonFaced with over $1 trillion fiscal deficit, US President Barack Obama has said Americans need to reduce expenditure and cut costs, or else India and China will outperform them.
Pointing out that there are no easy solutions for the recession-hit US economy, Obama said at a White House press conference yesterday, “It will take many months and many different solutions to lead us out (of recession)... There are no quick fixes and there are no silver bullets”.
Obama said his administration inherited a whopping fiscal deficit of $1.3 trillion from his predecessor. While it would take a long time to fix the structural deficit, US must bend the curve on these wide fiscal gaps, he added.
Otherwise, Obama warned, “... we will allow China or India or other countries to lap our young people in terms of their performance. We will settle on lower growth rates, and we will continue to contract both as an economy and our ability to provide a better life for our kids”.
On China’s concern over the value of the US dollar as a global currency, he said, “the dollar is extra-ordinarily strong right now... because investors consider the United States the strongest economy in the world, with the most stable political system in the world.
“I don’t believe that there is a need for global currency”. Referring to the bonus payments at the beleaguered insurer AIG, Obama said, “I’m as angry as anybody about those bonuses that went to some of the very same individuals who brought our financial system to its knees, partly because it’s yet another symptom of the culture that led us to this point”.The US President said strict conditions are in place for companies receiving taxpayers’ money, when it comes to executive pay and dividend payment, among others.
“Moving forward, anybody — any bank, for example, that is receiving capital from the taxpayers is going to have some very strict conditions in terms of how it pays out its executives, how it pays out dividend, how it’s reporting its lending practices,” he noted.
Assuring Americans that the economy would recover from the recession, Obama, however, said it would take time. “... But it will take time; it will take patience; and it will take an understanding that when we all work together, when each of us looks beyond our own short-term interest to the wider set of obligations we have towards each other, that’s when we succeed.
“That’s when we prosper. And that’s what is needed right now,” he said.
—PTI
The Financial Express, March 26, 2009, Page 11
WashingtonFaced with over $1 trillion fiscal deficit, US President Barack Obama has said Americans need to reduce expenditure and cut costs, or else India and China will outperform them.
Pointing out that there are no easy solutions for the recession-hit US economy, Obama said at a White House press conference yesterday, “It will take many months and many different solutions to lead us out (of recession)... There are no quick fixes and there are no silver bullets”.
Obama said his administration inherited a whopping fiscal deficit of $1.3 trillion from his predecessor. While it would take a long time to fix the structural deficit, US must bend the curve on these wide fiscal gaps, he added.
Otherwise, Obama warned, “... we will allow China or India or other countries to lap our young people in terms of their performance. We will settle on lower growth rates, and we will continue to contract both as an economy and our ability to provide a better life for our kids”.
On China’s concern over the value of the US dollar as a global currency, he said, “the dollar is extra-ordinarily strong right now... because investors consider the United States the strongest economy in the world, with the most stable political system in the world.
“I don’t believe that there is a need for global currency”. Referring to the bonus payments at the beleaguered insurer AIG, Obama said, “I’m as angry as anybody about those bonuses that went to some of the very same individuals who brought our financial system to its knees, partly because it’s yet another symptom of the culture that led us to this point”.The US President said strict conditions are in place for companies receiving taxpayers’ money, when it comes to executive pay and dividend payment, among others.
“Moving forward, anybody — any bank, for example, that is receiving capital from the taxpayers is going to have some very strict conditions in terms of how it pays out its executives, how it pays out dividend, how it’s reporting its lending practices,” he noted.
Assuring Americans that the economy would recover from the recession, Obama, however, said it would take time. “... But it will take time; it will take patience; and it will take an understanding that when we all work together, when each of us looks beyond our own short-term interest to the wider set of obligations we have towards each other, that’s when we succeed.
“That’s when we prosper. And that’s what is needed right now,” he said.
—PTI
US home sales climb at fastest pace in 10 months
US home sales climb at fastest pace in 10 months
The Economic Times, March 26, 2009, Page 9
Reuters WASHINGTON
SALES of newly built US singlefamily homes unexpectedly rose at their fastest pace in 10 months in February, while prices fell by a record margin from a year ago, a government report showed on Wednesday. The commerce department said sales rose 4.7% to a 337,000 annual pace, the fastest increase since April last year, from an upwardly revised 322,000 in January. Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said.
The median sales price in February fell a record 18.1% to $200,900 from a year earlier, the department said. The median marks the halfway point, with half of all houses sold above that level and half below. The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month's worth.
Durable goods orders rise in Feb
ORDERS to US factories for big-ticket manufactured goods unexpectedly rose in February after a record six straight declines. The Commerce Department said on Wednesday that orders for durable goods — manufactured products expected to last at least three years — increased 3.4% last month. It was the first advance since July and the strongest one-month gain in 14 months. Last month's strength was led by a surge in orders for military aircraft and parts, which shot up 32.4%. Demand for machinery, computers and fabricated metal products also rose. Still, the rebound may be temporary given all the problems facing the economy. — AP/Washington
The Economic Times, March 26, 2009, Page 9
Reuters WASHINGTON
SALES of newly built US singlefamily homes unexpectedly rose at their fastest pace in 10 months in February, while prices fell by a record margin from a year ago, a government report showed on Wednesday. The commerce department said sales rose 4.7% to a 337,000 annual pace, the fastest increase since April last year, from an upwardly revised 322,000 in January. Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said.
The median sales price in February fell a record 18.1% to $200,900 from a year earlier, the department said. The median marks the halfway point, with half of all houses sold above that level and half below. The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month's worth.
Durable goods orders rise in Feb
ORDERS to US factories for big-ticket manufactured goods unexpectedly rose in February after a record six straight declines. The Commerce Department said on Wednesday that orders for durable goods — manufactured products expected to last at least three years — increased 3.4% last month. It was the first advance since July and the strongest one-month gain in 14 months. Last month's strength was led by a surge in orders for military aircraft and parts, which shot up 32.4%. Demand for machinery, computers and fabricated metal products also rose. Still, the rebound may be temporary given all the problems facing the economy. — AP/Washington
US move on toxic assets whets FII appetite for Indian stocks again
US move on toxic assets whets FII appetite for Indian stocks again
The Hindu Business Line, March 26, 2009, Page 1
Our Bureau
Mumbai, March 25 The Obama administration’s recent plan to cleanse toxic assets of up to $1 trillion from the US banks has stoked Foreign Institutional Investors (FII) interest in Indian stocks.
According to the SEBI Web site, FIIs have been net buyers of equities aggregating Rs 2,020 crore in the last six trading sessions. During this period, Sensex has risen by close to eight per cent or 691 points.
On Wednesday alone, according to BSE figures, FIIs bought (net) Rs 348 crore. The benchmark Sensex closed at 9,667.9 points, up 2 per cent over Tuesday’s closing.
Market players said that FIIs are putting their money mainly in those sectors which have been hammered the most in the last few months. Banking, realty, oil and gas are some of the sectors where the FIIs seem to be parking their money at the moment.
“Mr Obama’s $1 trillion package to buy out the toxic assets was instrumental in the large FII inflows in the last one week. FIIs are of the view that the worst is over for the US banks and they have a little bit more breathing space which is why they are now putting their money into risky asset classes”, said Mr Saurabh Mukherjea, Head of Indian Equities at Noble Group.
“Our markets here have been highly co-related with the US markets in the last week, which has led to many fund managers allocating funds to India,” said Mr Alex Mathew, Head of Research at Geojit Financial Services.
“Once a few of these FIIs put their money here, the others will follow suit soon”, he added.
There are 1630 FIIs and 5008 FII sub-accounts registered with SEBI as on March 25.
The Hindu Business Line, March 26, 2009, Page 1
Our Bureau
Mumbai, March 25 The Obama administration’s recent plan to cleanse toxic assets of up to $1 trillion from the US banks has stoked Foreign Institutional Investors (FII) interest in Indian stocks.
According to the SEBI Web site, FIIs have been net buyers of equities aggregating Rs 2,020 crore in the last six trading sessions. During this period, Sensex has risen by close to eight per cent or 691 points.
On Wednesday alone, according to BSE figures, FIIs bought (net) Rs 348 crore. The benchmark Sensex closed at 9,667.9 points, up 2 per cent over Tuesday’s closing.
Market players said that FIIs are putting their money mainly in those sectors which have been hammered the most in the last few months. Banking, realty, oil and gas are some of the sectors where the FIIs seem to be parking their money at the moment.
“Mr Obama’s $1 trillion package to buy out the toxic assets was instrumental in the large FII inflows in the last one week. FIIs are of the view that the worst is over for the US banks and they have a little bit more breathing space which is why they are now putting their money into risky asset classes”, said Mr Saurabh Mukherjea, Head of Indian Equities at Noble Group.
“Our markets here have been highly co-related with the US markets in the last week, which has led to many fund managers allocating funds to India,” said Mr Alex Mathew, Head of Research at Geojit Financial Services.
“Once a few of these FIIs put their money here, the others will follow suit soon”, he added.
There are 1630 FIIs and 5008 FII sub-accounts registered with SEBI as on March 25.
Realty slump hits Trikona Capital, to be wound up
Realty slump hits Trikona Capital, to be wound up
Business Standard, March 26, 2009, Page 4
Vandana & Shivani Shinde / Mumbai
The slump in the real estate market has caused investors in the £250 million Trikona Capital, the India real estate fund of Trikona Trinity Capital, to demand that its fund managers “dispose of all its assets in an orderly fashion”. Trikona Trinity Capital is listed on the Alternative Investment Market (AIM) on the London Stock Exchange.
This is the first time foreign hedge fund investors have asked managers of a real estate fund to exit Indian investments. A couple of months ago, KSK Emerging Indian Energy Fund had to be wound up after shareholders, which included large hedge funds, demanded that the company be liquidated and the money invested by them returned.
Sources close to the Trikona Capital development said some of its limited partners, including hedge funds QVT financial and Carrousel Capital, with 27 per cent and 14.3 stakes, respectively, proposed a resolution for “an accelerated disposal of all assets”.
The company passed this resolution in an extraordinary general meeting (EGM) on Tuesday. The resolution also authorised the board to buy up to 70 per cent shares through a buyback or a tender offer.
Some projects in which Trikona invested were stalled for lack of sanctions and approvals, which delayed returns to the cash-strapped investors.
“Some shareholders had liquidity problems. As managers, we had to agree to their demands. However, any haste in disposing of these investments will mean a breach of the government of India’s rules,” said Ashish Kalra, chief executive officer, Trikona Capital.
According to a recent Foreign Investment Promotion Board notification, foreign investors in Indian real estate cannot sell their stake to another foreign investor for three years.
Trikona Capital fully invested the £250 million in India within 12 months of raising it. The group has made 17 investments in India. Some of these include Tech Oasis, Greater Noida (around 215.5 crore), Rustomjee Township in Mumbai (around Rs 79 crore) and Fortis Healthcare (around Rs 100 crore)
“Apart from demanding disposal of all assets, these limited partners sought the removal of some fund managers,” said the source. After the EGM, two directors — Rak Chugh, founder and managing director, and Andrzej Sobczak, non-executive director and chief operating officer of Carrousel Capital — stepped down.
The EGM also approved resolutions to change the investment policy and the distribution of capital. One resolution said that if the company’s ordinary shares traded below the net asset value (NAV), the shareholders would be returned the capital through cash. Trikona Trinity Capital is currently trading at £31.25.
Business Standard, March 26, 2009, Page 4
Vandana & Shivani Shinde / Mumbai
The slump in the real estate market has caused investors in the £250 million Trikona Capital, the India real estate fund of Trikona Trinity Capital, to demand that its fund managers “dispose of all its assets in an orderly fashion”. Trikona Trinity Capital is listed on the Alternative Investment Market (AIM) on the London Stock Exchange.
This is the first time foreign hedge fund investors have asked managers of a real estate fund to exit Indian investments. A couple of months ago, KSK Emerging Indian Energy Fund had to be wound up after shareholders, which included large hedge funds, demanded that the company be liquidated and the money invested by them returned.
Sources close to the Trikona Capital development said some of its limited partners, including hedge funds QVT financial and Carrousel Capital, with 27 per cent and 14.3 stakes, respectively, proposed a resolution for “an accelerated disposal of all assets”.
The company passed this resolution in an extraordinary general meeting (EGM) on Tuesday. The resolution also authorised the board to buy up to 70 per cent shares through a buyback or a tender offer.
Some projects in which Trikona invested were stalled for lack of sanctions and approvals, which delayed returns to the cash-strapped investors.
“Some shareholders had liquidity problems. As managers, we had to agree to their demands. However, any haste in disposing of these investments will mean a breach of the government of India’s rules,” said Ashish Kalra, chief executive officer, Trikona Capital.
According to a recent Foreign Investment Promotion Board notification, foreign investors in Indian real estate cannot sell their stake to another foreign investor for three years.
Trikona Capital fully invested the £250 million in India within 12 months of raising it. The group has made 17 investments in India. Some of these include Tech Oasis, Greater Noida (around 215.5 crore), Rustomjee Township in Mumbai (around Rs 79 crore) and Fortis Healthcare (around Rs 100 crore)
“Apart from demanding disposal of all assets, these limited partners sought the removal of some fund managers,” said the source. After the EGM, two directors — Rak Chugh, founder and managing director, and Andrzej Sobczak, non-executive director and chief operating officer of Carrousel Capital — stepped down.
The EGM also approved resolutions to change the investment policy and the distribution of capital. One resolution said that if the company’s ordinary shares traded below the net asset value (NAV), the shareholders would be returned the capital through cash. Trikona Trinity Capital is currently trading at £31.25.
Sobha Developers in talks with banks for debt revamp
Sobha Developers in talks with banks for debt revamp
The Hindu Business Line, March 26, 2009, Page 2
Our Bureau
Bangalore, March 25 Sobha Developers is in talks with banks, financial institutions and private funds to restructure over Rs 1,000 crore of its total debt of about Rs 1,800 crore.
“We feel that banks, financial institutions and funds have agreed to support us. A clearer picture will emerge in the next 2-3 weeks,” said Mr J.C. Sharma, Managing Director, Sobha Developers.
He added that the company had no overdue in principal payment, nor were there any interest delays. “We are confident that we could bring down the debt-equity ratio to less than 1:1,” said Mr Sharma.
The current debt equity ratio is 1.56:1. The company is open to “even 49 per cent participation from private equity players at a special purpose vehicle (SPV) level,” he added.
“There is no further bad news; so we should do better in the coming financial year,” said Mr Sharma, adding that the company’s contractual income would be significantly higher at Rs 400 crore in the next year.
Though the cash flows, at Rs 50-60 crore a month, are still not normal, he said, the company is hopeful that cash flows would be at Rs 100-a-month level, which it enjoyed till July-August last year. “In two-three quarters from now, cash flows will go to Rs 100 crore a month,” he said.
The company, which has about 1,400 units under various stages of construction over 18 projects in Bangalore, is hopeful of getting bulk deals from institutions in the days to come. The dependence on the IT sector for apartment sales has come down to 20 per cent now from about 40-45 per cent three years ago, said Mr Sharma.
Sobha Developers hopes to launch two projects – one each in the luxury and affordable segments – soon.
The real estate company, which had about 3,000 staff in September 2007, has about 2,200 staff on its rolls now, due to “lay-offs and high attrition,” said a company executive.
The Hindu Business Line, March 26, 2009, Page 2
Our Bureau
Bangalore, March 25 Sobha Developers is in talks with banks, financial institutions and private funds to restructure over Rs 1,000 crore of its total debt of about Rs 1,800 crore.
“We feel that banks, financial institutions and funds have agreed to support us. A clearer picture will emerge in the next 2-3 weeks,” said Mr J.C. Sharma, Managing Director, Sobha Developers.
He added that the company had no overdue in principal payment, nor were there any interest delays. “We are confident that we could bring down the debt-equity ratio to less than 1:1,” said Mr Sharma.
The current debt equity ratio is 1.56:1. The company is open to “even 49 per cent participation from private equity players at a special purpose vehicle (SPV) level,” he added.
“There is no further bad news; so we should do better in the coming financial year,” said Mr Sharma, adding that the company’s contractual income would be significantly higher at Rs 400 crore in the next year.
Though the cash flows, at Rs 50-60 crore a month, are still not normal, he said, the company is hopeful that cash flows would be at Rs 100-a-month level, which it enjoyed till July-August last year. “In two-three quarters from now, cash flows will go to Rs 100 crore a month,” he said.
The company, which has about 1,400 units under various stages of construction over 18 projects in Bangalore, is hopeful of getting bulk deals from institutions in the days to come. The dependence on the IT sector for apartment sales has come down to 20 per cent now from about 40-45 per cent three years ago, said Mr Sharma.
Sobha Developers hopes to launch two projects – one each in the luxury and affordable segments – soon.
The real estate company, which had about 3,000 staff in September 2007, has about 2,200 staff on its rolls now, due to “lay-offs and high attrition,” said a company executive.
Sobha gets nod from MFs to roll over Rs 350 cr
Sobha gets nod from MFs to roll over Rs 350 cr
Business Standard, March 26, 2009, page 4
Raghuvir Badrinath & Ravi Menon / Bangalore March 26, 2009, 0:12 IST
Sobha Developers, the Bangalore-based Rs 1,500 crore real estate developer, is understood to have got a nod from three mutual funds to roll over debt of around Rs 350 crore. The payback is expected to start after 12 months, starting April 2010. Sobha Developers is leveraged 1.6 times and is aggressively looking to restructure nearly Rs 900 crore debt out of a total of Rs 1,900 crore.
This move by three mutual funds comes on the heels of around 12 banks and financial institutions starting work to restructure another Rs 600 crore debt to Sobha Developers. Sources indicate the company has been able to get approval for revamping around Rs 100 crore of debt so far and the rest is expected to sewn up by mid-2009.
Company officials said this debts were for projects that were either underway or nearing completion or against the inventory backlog. The average rate of interest is around 13.72 per cent. Sobha Developers is understood to be aiming to restructure Rs 900 crore debt by around September. Nearly Rs 400 crore is due to be paid in the current calendar year.
The company is also looking to rope in a financial investor to the extent of 20-25 per cent through preferential allotment. This will fetch an additional Rs 300 crore, which can be used to settle a part of the debt. The promoters hold close to 87 per cent in the company.
Business Standard, March 26, 2009, page 4
Raghuvir Badrinath & Ravi Menon / Bangalore March 26, 2009, 0:12 IST
Sobha Developers, the Bangalore-based Rs 1,500 crore real estate developer, is understood to have got a nod from three mutual funds to roll over debt of around Rs 350 crore. The payback is expected to start after 12 months, starting April 2010. Sobha Developers is leveraged 1.6 times and is aggressively looking to restructure nearly Rs 900 crore debt out of a total of Rs 1,900 crore.
This move by three mutual funds comes on the heels of around 12 banks and financial institutions starting work to restructure another Rs 600 crore debt to Sobha Developers. Sources indicate the company has been able to get approval for revamping around Rs 100 crore of debt so far and the rest is expected to sewn up by mid-2009.
Company officials said this debts were for projects that were either underway or nearing completion or against the inventory backlog. The average rate of interest is around 13.72 per cent. Sobha Developers is understood to be aiming to restructure Rs 900 crore debt by around September. Nearly Rs 400 crore is due to be paid in the current calendar year.
The company is also looking to rope in a financial investor to the extent of 20-25 per cent through preferential allotment. This will fetch an additional Rs 300 crore, which can be used to settle a part of the debt. The promoters hold close to 87 per cent in the company.
Cement prices rise despite duty cut
Cement prices rise despite duty cut
The Hindu Business Line, March 2009, page 2
Supply constraints, transportation problems.
--------------------------------------------------------------------------------
Outlook
The all-India cement price is likely to reach Rs 245-248 by the month-end
Further hikes have been ruled out as the demand is decelerating compared to January-February period
--------------------------------------------------------------------------------
Suresh P. Iyengar
Mumbai, March 25 Cement prices have gone up by about Rs 10 a 50-kg bag in March owing to an increase in demand and transportation constraints. However, dealers expect demand to plateau at the current level, indicating that there will not be any further price increase for some time in major markets. The Centre cut excise duty by four percentage points to eight per cent in February.
Prices were hiked by Rs 3-5 a bag in the first week of March and again by Rs 5 a bag between March 16 and 20, said a city-based dealer. Together with the hike in March, cement prices in the last 6-8 weeks have gone up by Rs 12-15 a bag.
On an average, the all-India cement price, which touched Rs 239 a bag in last week of February, may reach Rs 245-248 by the month-end.
Though there was a marginal uptake in demand across regions, supply constraints and transportation problems have paved the way for the rise in prices.
Demand decelerating
In western regions including Mumbai, prices were increased twice by Rs 5 each in March to Rs 256-260 a bag. However, further hikes have been ruled out as the demand is decelerating compared to January-February period.
“Government-sponsored projects contributed for the major cement demand which is not stable. Many real estate companies have announced new projects, but we do not see any further rise in prices,” said a dealer.
Many projects, which were put on hold due to high cement prices, are being revived in the eastern region. In fact, in north-eastern region prices ruled firm at Rs 285 a bag after it was revised twice in March due to shortage in supply on the back of increase in demand.
Mr Vinod Juneja, Managing Director, Binani Cement, said, “Many railway wagons which were used for transporting cement have been diverted for food grain procurement. Of late, the problem has eased a bit.” Binani Cement had recently entered the Eastern markets.
Power cuts in South
Except for Bangalore, prices remained strong in the southern region including Tamil Nadu and Andhra Pradesh. Power cuts (one day a week) in Andhra Pradesh and Tamil Nadu has led to disruption in production schedules, said Mr Ajit Motwani, Research Analyst, Emkay Global Financial Services.
In the northern region, prices have gone up by Rs 5-15 a bag to Rs 235-Rs 240 in last two months with the pick up in demand from infrastructure projects such as Delhi Airport, Delhi Metro, besides preparation for the Commonwealth Games.
Prices are expected to remain stable at the current level despite softening of demand in the North (excluding Delhi and adjoining regions) and few parts of western region. It may go up marginally in the eastern and central region on the back of strong demand, said a dealer.
Mainline cement company shares showed a mixed trend on the BSE on Wednesday. While ACC and India Cement were up 2 per cent and 6.85 per cent at Rs 562 and Rs 103, Ultratech Cement and Grasim Industries closed almost flat at Rs 513 and Rs 1,552. Shree Cement and Ambuja Cement lost 4 per cent and 0.36 per cent to Rs 611 and Rs 70.
The Hindu Business Line, March 2009, page 2
Supply constraints, transportation problems.
--------------------------------------------------------------------------------
Outlook
The all-India cement price is likely to reach Rs 245-248 by the month-end
Further hikes have been ruled out as the demand is decelerating compared to January-February period
--------------------------------------------------------------------------------
Suresh P. Iyengar
Mumbai, March 25 Cement prices have gone up by about Rs 10 a 50-kg bag in March owing to an increase in demand and transportation constraints. However, dealers expect demand to plateau at the current level, indicating that there will not be any further price increase for some time in major markets. The Centre cut excise duty by four percentage points to eight per cent in February.
Prices were hiked by Rs 3-5 a bag in the first week of March and again by Rs 5 a bag between March 16 and 20, said a city-based dealer. Together with the hike in March, cement prices in the last 6-8 weeks have gone up by Rs 12-15 a bag.
On an average, the all-India cement price, which touched Rs 239 a bag in last week of February, may reach Rs 245-248 by the month-end.
Though there was a marginal uptake in demand across regions, supply constraints and transportation problems have paved the way for the rise in prices.
Demand decelerating
In western regions including Mumbai, prices were increased twice by Rs 5 each in March to Rs 256-260 a bag. However, further hikes have been ruled out as the demand is decelerating compared to January-February period.
“Government-sponsored projects contributed for the major cement demand which is not stable. Many real estate companies have announced new projects, but we do not see any further rise in prices,” said a dealer.
Many projects, which were put on hold due to high cement prices, are being revived in the eastern region. In fact, in north-eastern region prices ruled firm at Rs 285 a bag after it was revised twice in March due to shortage in supply on the back of increase in demand.
Mr Vinod Juneja, Managing Director, Binani Cement, said, “Many railway wagons which were used for transporting cement have been diverted for food grain procurement. Of late, the problem has eased a bit.” Binani Cement had recently entered the Eastern markets.
Power cuts in South
Except for Bangalore, prices remained strong in the southern region including Tamil Nadu and Andhra Pradesh. Power cuts (one day a week) in Andhra Pradesh and Tamil Nadu has led to disruption in production schedules, said Mr Ajit Motwani, Research Analyst, Emkay Global Financial Services.
In the northern region, prices have gone up by Rs 5-15 a bag to Rs 235-Rs 240 in last two months with the pick up in demand from infrastructure projects such as Delhi Airport, Delhi Metro, besides preparation for the Commonwealth Games.
Prices are expected to remain stable at the current level despite softening of demand in the North (excluding Delhi and adjoining regions) and few parts of western region. It may go up marginally in the eastern and central region on the back of strong demand, said a dealer.
Mainline cement company shares showed a mixed trend on the BSE on Wednesday. While ACC and India Cement were up 2 per cent and 6.85 per cent at Rs 562 and Rs 103, Ultratech Cement and Grasim Industries closed almost flat at Rs 513 and Rs 1,552. Shree Cement and Ambuja Cement lost 4 per cent and 0.36 per cent to Rs 611 and Rs 70.
Subscribe to:
Posts (Atom)
Posts
