Business
Adani halts ₹34,900 cr Mundra project amid Hindenburg row
Adani Group has suspended work on a ₹34,900 crore petrochemical project at Mundra in Gujarat as it focuses on resources to consolidate operations and address investor concerns following a damning report by a US-based short seller, sources said.
The group’s flagship Adani Enterprises Ltd (AEL) had in 2021 incorporated a wholly-owned subsidiary, Mundra Petrochem Ltd for setting up a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in Kutch district of Gujarat.
But after Hindenburg Research’s January 24 report alleging accounting fraud, stock manipulations and other corporate governance lapses chopped off about USD 140 billion from the market value of Gautam Adani’s empire, the apples-to-airport group is hoping to claw back and calm jittery investors and lenders through a comeback strategy.
Also read: Adani group prepays $2.15 billion share-backed loans
The comeback strategy is based on addressing investor concerns around debt by repaying some loans, consolidating operations, and fighting off allegations.
The group has denied all allegations levelled by Hindenburg. As part of this, projects are being re-evaluated based on cashflow and finance available.
And of the projects the group has decided not to pursue for the time being is the 1 million tonne per annum Green PVC project, two sources with knowledge of the matter said.
The group has shot off mails to vendors and suppliers to “suspend all activities” on immediate basis.
In the mails, seen by PTI, the group has asked them to “suspend all activities of the scope of work and performance of all obligations” for Mundra Petrochem Ltd’s Green PVC project “till further notice.”
This is the following “unforeseen scenario”. The management, it said, was “re-evaluating various project/s being implemented at group level in different business verticals. Based on future cashflow and finance, some of the project/s are being re-evaluated for its continuation and revision in timeline.”
Reached for comments, a group spokesperson said AEL will be evaluating the status of growth projects in primary industry vertical over the coming months.
“The balance sheet of each of our independent portfolio companies is very strong. We have industry-leading project development and execution capabilities, strong corporate governance, secure assets, strong cashflows, and our business plan is fully funded. We remain focused on executing our previously outlined strategy to create value for our stakeholders,” the spokesperson said.
“AEL will be evaluating the status of growth projects in the primary industry vertical over the coming months”.
The unit was to have a poly-vinyl-chloride (PVC) production capacity of 2,000 KTPA (kilo tonne per annum) requiring 3.1 million tonne per annum (MTPA) of coal that was to be imported from Australia, Russia and other countries.
PVC is the world’s third-most widely produced synthetic polymer of plastic. It finds wide applications – from flooring, to making sewage pipes and other pipe applications, in insulation on electrical wires, packaging and manufacture of aprons etc.
Adani Group had planned the project as PVC demand in India at around 3.5 MTPA was growing at the rate of 7 per cent year-on-year. With near stagnant domestic production of PVC at 1.4 million tonne, India is dependent on imports to keep pace with the demand.
Also read: On Adani-Hindenburg row, Centre says no significant impact at systemic level
The Hindenburg report had alleged “brazen stock manipulation and accounting fraud” and use of offshore shell companies to inflate stock prices. The group has denied all Hindenburg allegations, calling them “malicious”, “baseless” and a “calculated attack on India”.
As part of the comeback strategy, the group has cancelled a ₹7,000 crore coal plant purchase as well as shelved plans to bid for stake in power trader PTC to conserve expenses. It has repaid some debt and pre-paid some of the finances raised by pledging promoter stake in group companies.
NEW DELHI: Air India subsidiaries, Air India Express and AirAsia India, on Tuesday moved to a unified websit, reservation system and customer support channels. The move will enable passengers to manage bookings and check-in to AirAsia India and Air India Express domestic and international flights on the integrated website, Airindiaexpress.com, according to a statement by the group.
Air India chief executive officer Campbell Wilson said the integration of the core reservation and passenger-facing systems of Air India Express and AirAsia India “marks a significant milestone in the Air India Group’s transformation journey”.
“This new Air India Express, operating both domestically and internationally using systems optimised for low-cost airlines, gives the Group a much stronger LCC platform. Together with the Group’s recent, benchmark-setting aircraft order, this sets the scene for us to realise many new opportunities for customers, employees and Indian aviation,” he said, according to the statement.
This system merger comes five months after AirAsia India was fully acquired and subsidiarised under Air India, and three months after both AirAsia India and Air India Express were placed under a single CEO. The airlines will continue integrating other internal systems and, eventually, their air operating permits and regulatory posts.
AirAsia India flies to 19 destinations across the country while Air India Express operates to 14 international destinations from 19 Indian cities
Wilson said integration of Air India Express and Air India will bring revenue, cost, and operational benefits through broader adoption of each airlines’ best practices, systems, and routes, and confer greater economies of scale.
The new Air India Express will focus on leisure-oriented and price sensitive markets while improving connectivity between key domestic cities and Air India’s fast expanding international network. This migration, which largely involved Air India Express migrating to the systems used by AirAsia India, confers significant capability and efficiency benefits for the airline and passengers.
To give taxpayers more time, Centre has prolonged the deadline for linking Permanent Account Number (PAN) and Aadhaar by three months to June 30. Previously, the ministry of finance’s department of revenue issued a notification requiring people to link their Aadhaar card to their PAN online for a fee of Rs. 1000 by March 31, or their PAN will become inoperative.
“Under the provisions of the Income-tax Act, 1961(the ‘Act’) every person who has been allotted a PAN as on 1st July, 2017 and is eligible to obtain Aadhaar Number, is required to intimate his Aadhaar to the prescribed authority on or before 31st March, 2023, on payment of a prescribed fee. Failure to do so shall attract certain repercussions under the Act w.e.f. 1st April, 2023. The date for intimating Aadhaar to the prescribed authority for the purpose of linking PAN and Aadhaar has now been extended to 30th June, 2023,” a statement from finance ministry read.
ALSO READ: How to link PAN and Aadhaar card?
What happens if you fail to meet PAN-Aadhaar linking deadline?
The PAN of taxpayers who have failed to link their Aadhaar as required will become inoperative on July 1, 2023. When the PAN card is inoperative:
1) No refunds will be issued against such PANs.
2) No interest shall be payable on such refund during the time in which the PAN is inoperative; and
3) TDS and TCS shall be deducted/collected at a higher rate, as specified in the Act.
The PAN can be made operational again in 30 days following paying a fee of Rs.1,000.
Nestle will examine its banking relationships following the planned takeover of Credit Suisse by UBS, the food group’s Chief Executive Mark Schneider said on Tuesday.
The world’s largest food group was a client of Credit Suisse, Schneider told broadcaster TeleZueri in an interview to be shown on Tuesday evening, and had been following the collapse of Switzerland’s second-biggest bank.
“We have worked closely with Credit Suisse for many decades in a spirit of trust,” Schneider told the broadcaster.
“You can see from such an example that Switzerland as a business location and a financial centre are very closely linked. We now have to see how to reorganise our banking relationships, both with Swiss and international providers.”
Schneider said the intervention by the Swiss government, the central bank and financial market regulator to engineer a merger with UBS had stabilised the situation and restored confidence.
Speaking about Nestle, Schneider said the company had made a good start to 2023, although further price rises by the company were likely, Schneider said, to offset inflation of raw material costs.
The maker of Nescafe instant coffee and KitKat chocolate bars raised prices by 8.2% last year, but that did not fully offset the impact of increased ingredient costs on margins.
Price increases had so far only had a “very limited” impact on consumer spending, Schneider said.
“As inflation continues, and then also affects our own profitability, we will have to adjust prices,” Schneider said.
“We will continue to do this in a responsible way, we don’t want to be a price driver. We respond to inflation, we don’t fuel it,” he said.
The food maker was also working on savings to reach its goal for a full-year underlying trading operating profit margin target of between 17% and 17.5% , Schneider added.
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