RCOM completes full repayment of two Syndicated ECB Loan facilities aggregating US$ 1 Billion

RCOM completes full repayment of two Syndicated ECB Loan facilities aggregating US$ 1 Billion:    
         
Reliance Communications today announced it has completed full repayment of two Syndicated ECB loan facilities of US$ 500 Million each, aggregating US$ 1 billion, during the quarter ended 30th June 2013. These loans were availed in the year 2007 from a group of international banks.


RCOM makes scheduled repayments of another US$ 207 million against other foreign currency loans :
            In addition, RCOM has made scheduled repayments of another US$ 207 million (Rs. 1,200 crore) in respect of other foreign currency loans, on the respective due dates during the quarter ended 30th June, 2013. The repayments have been from RCOM’s rupee resources.

           RCOM’s foreign currency debt is steadily declining every year, and the interest outgo on such debt is fully covered by US$ denominated earnings from the Reliance Globalcom business. 

Hero Moto to buy 49% stake in Erik Buell Racing for $25m

India's largest two-wheeler maker Hero MotoCorp is investing USD 25 million in US-based motorcycle maker Erik Buell Racing to buy a 49.2 percent stake.

Hero has  incorporated a wholly owned subsidiary HMCL (NA), Inc in United States, which is investing in EBR.

The first tranche of USD 15 million has been invested by HMCL (NA) on June 28, and the second tranche of USD 10 million is proposed to be invested within the next 9 months, it said.

Hero and Japan's Honda had ended a long-standing joint venture in India in 2010, post which Hero started scouting for technology to power its motorcycles.

It signed a technology sharing deal with EBR in February 2012. The East Troy, Wisconsin-based company makes customised superbikes and Hero had said the two companies were working together to develop sports bikes.

Hero is also developing the concept hybrid scooter Leap, which was showcased at the Delhi Auto Expo last year, in collaboration with EBR, the compay had said.

Hero MotoCorp shares is up by 0.90 % at Rs 1,679.10 on NSE.

Petrol gets dearer again; prices hiked by Rs1.82 per litre

Sharp depreciation of rupee have forced the state run fuel retailers to hike petrol prices for the third time this month by Rs 1.82 a litre, excluding local sales tax or VAT, on Friday midnight.  Oil firms had on June 1 first raised petrol prices by 75 paise, excluding VAT and then followed with steep Rs 2 per litre hike on June 16. Thus, with this latest hike, petrol price, in Mumbai, have been increased by Rs 2.30 to Rs 76.90 while in Kolkata rates is up from Rs 73.79 to Rs 76.10 per litre. In Chennai, prices are hiked by Rs 2.32 to Rs 71.72. Most importantly, latest increase negated the four reductions this year till May.

However, this is not the only factor which would burn a hole in one’s pocket, diesel prices too are set to be raised by 40-50 paise per litre by this week in accordance with the government's January decision to gradually move to market pricing with gradual hikes.

The depreciating rupee has prompted widening of losses on diesel and cooking fuel. Oil firms are now losing Rs 8.60 per litre on diesel compared to Rs 6.31 previously. Diesel prices, uptill now, have been hiked on five occasions since January when the government authorized state-owned oil firms to increase prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out. Besides, Oil firms are losing Rs 30.53 per litre on kerosene sold through public distribution system and Rs 368.50 per 14.2-kg cooking gas cylinder.

Reliance Infra to exit Delhi Airport Metro on June 30

Anil Ambani Group company Reliance Infra has stated that it will stop operating the Delhi Airport Metro from midnight on June 30. The metro line links Delhi’s international airport with central Delhi.

The public private partnership project is operated by Delhi Airport Metro Express Pvt Ltd (DAMEPL), a special purpose vehicle promoted by Ambani’s Reliance Infra. The company has been battling mounting losses, which are nearing the Rs 300-crore-mark.

LONG-RUNNING SAGA

This is not the first time that the operator has issued such a termination notice to the Delhi Metro Rail Corporation (DMRC). The DMRC Board, which met on Friday to consider the issue, rejected the termination notice, stating that it was
against the contract.

DMRC also added that it would operate the project if Reliance stepped out.

After a meeting of the Delhi Metro Board, Sudhir Krishna, Secretary, Urban Development Ministry, stated: “The notice (by Reliance Infra) is in violation of the concession agreement and the ongoing arbitration proceedings. The Board decided to reject the notice and call upon them to continue operations. If, however, they do not do so, DMRC shall step in and operate the line in the larger public interest.”

Meanwhile, arbitration proceedings, over who was responsible for the metro link’s closure for almost six months last year, continue. Insiders say that the operator is maintaining that the reason for the termination notice is not financial but breach of contract by Delhi Metro.

After getting the termination notice, Delhi Metro had pointed out there are three options: First, the line remains closed; second, lenders, led by Axis Bank, bring back DAMEPL or substitute the developer; and third, Delhi Metro starts operations and maintenance of the project, including absorbing the staff of DAMEPL for the time being.

DEBT REPAYMENT

However, in case the concession agreement is terminated, and DMRC has to manage the entire debt of about Rs 2,000 crore, then DMRC wants the Central Government and Delhi Government to arrange the money.

The stance of the Centre and Delhi Government on this issue is not yet clear. One view is that Delhi Metro should itself arrange for funds to operate the line and also come up with a viable plan for the line.

While Delhi Metro had projected that the line would have a daily ridership of 40,000 people, actual ridership is about a fourth of that, at around 10,000, said an official source.