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Saturday,08-May-2021

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Adani Group to acquire controlling interest in Mumbai airport

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Adani Gas tanks 14 per cent on PNGRB notice.

Adani Airport Holdings Ltd (AAHL) has entered into an agreement to acquire the debt of GVK Airport Developers Ltd, and in turn, will acquire controlling interest in the Mumbai airport.

In a regulatory filing on Monday, Adani Enterprises said as per the agreement, Adani Airport will acquire the debt of GVKADL from its lenders. The lenders include a Goldman Sachs-led consortium and HDFC.

The GVK Group and AAHL have agreed that AAHL will offer a stand-still pact to GVK, in addition, to release of the guarantee given by GVK Power and Infrastructure Ltd with respect to the debt acquired by it.

“The Adani Group will also take steps to complete the acquisition of a 23.5 per cent equity stake from ACSA and Bidvest in MIAL for which it has obtained the CCI’s approval. Upon the acquisition of the debt of GVKADL, Adani Group will take steps to obtain necessary customary and regulatory approvals, as may be required, to acquire controlling interest in MIAL,” the filing said.

GVKADL is the holding company through which GVK Group holds 50.50 per cent equity stake in the Mumbai International Airport Ltd (MIAL), which in turn holds 74 per cent equity stake in the Navi Mumbai International Airport Ltd.

It said that AAHL intends to infuse funds into MIAL to ensure that it receives much needed liquidity and also achieves financial closure of the Navi Mumbai International Airport to be able to commence construction.

In a statement, GVK said that the terms of cooperation also include releasing of the company of various obligations, securities and corporate guarantees given in respect of debt to be acquired by Adani.

“The ability for Adani to convert the acquired debt to equity of GVKADL on mutually agreed terms, subject to obtaining necessary regulatory approvals,” it said.

Noting that the aviation industry has been severely impacted by Covid-19 and it has impacted the financials of Mumbai International Airport Ltd, G.V.K. Reddy, Founder & Chairman, GVK, said: “It was, therefore, important that we bring in a financially strong investor in the shortest possible time to improve the financial position of MIAL, as well as to help achieve Financial Closure of the Navi Mumbai International Airport project, which is a project of national importance.”

He added that it is under these circumstances that GVK agreed to cooperate with Adani so as to achieve these twin objectives.

Further, when the transaction is consummated, which is subject to customary approvals, GVK would be reducing a significant portion of liabilities to its lenders, which is of utmost importance to the group, Reddy added.

Business

OMCs go on pause mode as petrol, diesel prices remain unchanged

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Petrol

Petrol and diesel prices in the country remained unchanged on Saturday as oil marketing companies (OMCs) decided to pause the daily revision process and closely study global oil price movement before effecting any change in the domestic market.

Accordingly, petrol price remained at previous days level of Rs 91.27 a litre and diesel Rs 81.73 a litre in the national capital.

Across the country as well, the petrol and diesel price remained static on Saturday but its price levels varied depending on the level of local levies in respective states.

Petrol prices in some states have breached the Rs 100 per litre mark, while premium petrol has been hovering above that level for some time now.

Prior to holding back auto fuel prices, its pump rates had increased sharply on previous four days.

Petrol and diesel prices rose by 15 paisa and 18 paisa per litre respectively on Tuesday, by 19 paisa and 21 paisa per litre respectively on Wednesday, by 25 and 30 paisa respectively on Thursday and by 28 paisa and 31 paisa per litre respectively on Friday after an 18-day break.

IANS had reported earlier that OMCs may begin increasing the retail price of petrol and diesel post state elections as they were incurring losses to the tune of Rs 2-3 per litre by holding the price line despite higher global crude and product prices.

The oil companies had already increased the ATF prices by 6.7 per cent effective this month.

OMCs benchmark retail fuel prices to a 15-day rolling average of global refined products’ prices and dollar exchange rate.

In the last fortnight, global oil prices have hovered in $66-67 a barrel range higher than the levels when petrol and diesel prices were last revised.

Crude prices have jumped around $69 a barrel now.

The price of the two auto fuels had fallen by 16 paisa and 14 paisa per litre respectively on April 15 after a 15 day break when OMCs kept its prices static.

Thereafter revision of fuel prices have been halted.

The OMCs went on price cut for the first time this year on two consecutive days, March 24 and 25, after keeping oil prices steady for past 24 days.

It again reduced the price on March 30.

Thereafter, fuel prices have remained unchanged for past 15 days before falling again on April 15.

In all, petrol prices have fallen by 77 paisa per litre while diesel by 74 paisa per litre in 2021 so far.

Earlier, petrol and diesel prices increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre, respectively, so far this year.

With global crude prices at around $ 69 a barrel mark, OMCs may have revise fuel prices upwards again if there is any further firming up.

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Business

Tesla admits Elon Musk’s ‘full self-driving’ claim not feasible yet

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Tesla

Despite tall claims made by Elon Musk over Twitter about the full self-driving technology, electric car-maker Tesla has privately admitted that such claims do not match up with the engineering reality.

Tesla vehicles are far from reaching a level of autonomy often described by Musk on social media, according to an internal memo obtained by transparency portal Plainsite.

“Elon’s tweet does not match engineering reality per CJ. Tesla is at Level 2 currently,” Tesla’s director of Autopilot software CJ Moore told the California Department of Motor Vehicles (DMV)

Level 2 technology refers to a semi-automated driving system, which requires supervision by a human driver.

The memo shows that “Musk has inflated the capabilities of the Autopilot advanced driver assistance system in Tesla vehicles, as well the company’s ability to deliver fully autonomous features by the end of the year,” reports TechCrunch.

Tesla vehicles come with a driver assistance system called ‘Autopilot’ that enhances safety and convenience behind the wheel. When used properly, Autopilot reduces your overall workload as a driver.

For an additional $10,000, people can buy “full self-driving” or FSD, that Musk promises will deliver full autonomous driving capabilities.

Full Self-Driving capabilities include navigate on Autopilot, Auto Lane Change, Summon (moves your car in and out of a tight space using the mobile app or key),

Smart Summon (your car will navigate more complex environments and parking spaces); Traffic and Stop Sign Control (Beta) and Autosteer on city streets (upcoming).

However, Tesla vehicles are still not driving on their own and “are far from reaching that level of autonomy”.

In an earnings call in January, Musk told investors that he was “highly confident the car will be able to drive itself with reliability in excess of human this year”.

Tesla, however, is unlikely to achieve Level 5 (L5) autonomy, in which its cars can drive themselves anywhere without any human supervision by the end of 2021.

“The ratio of driver interaction would need to be in the magnitude of 1 or 2 million miles per driver interaction to move into higher levels of automation. Tesla indicated that Elon is extrapolating on the rates of improvement when speaking about L5 capabilities. Tesla couldn’t say if the rate of improvement would make it to L5 by end of calendar year,” the DMV memo read.

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‘Government should incentivise use of clean fuels’

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Petrol

With the government imposing a green tax on old polluting vehicles, Indian Auto LPG Coalition (IAC) is advocating the need for this deterrent to be accompanied by incentives to people shifting to cleaner alternative fuels such as auto LPG.

The Union Ministry for Road Transport and Highways recently approved a proposal to levy a ‘green tax’ on old vehicles in a bid to curtail pollution and push consumers to switch to environmental-friendly alternatives.

Notably, hybrid vehicles and vehicles running on clean alternative fuels such as LPG, CNG and ethanol will be exempt from this tax. The initiative aims to make polluters pay for environmental pollution in India’s choking cities.

While welcoming the move as a step in the right direction, Indian Auto LPG Coalition has suggested that penalising polluters should be accompanied by reward for users of clean fuels.

“India’s choking cities need to shift a large number of their private vehicles to clean alternative fuels immediately and pushing consumers to switch their existing vehicles to clean alternatives is the quickest way to achieve this. This is why a penalty for polluters must also be accompanied by reward or incentives for citizens switching to clean fuels to make it more impactful,” said Suyash Gupta, Director General, Indian Auto LPG Coalition.

Petrol and diesel vehicles including cars, two-wheelers and three wheelers can easily be converted to Auto LPG or CNG by installing conversion kits. Conversion kits that currently cost up to Rs 25,000 can be made significantly more affordable with GST cuts and subsidy support, said that the nodal body for the promotion of Auto LPG in India.

These conversion kits are taxed at a prohibitive GST rate of 28 per cent, a policy that is dichotomous to the government’s commitment to clean energy.

“Rationalising this prohibitive GST rate on conversion kits to 5 per cent has been a long-pending plea of the Auto LPG sector. Reducing this GST rate will make conversion kits more affordable for mass usage,” Gupta said.

He further said that the government must also consider subsidising conversion kits for consumers as a move towards incentivizing personal vehicle users to shift to clean gaseous fuels at a mass level. The green tax on polluting vehicles together with incentives for consumers shifting to clean fuels can have a quick and remarkable effect on India’s urban air quality, Gupta added.

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