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The Great Indian Suck-Cess Fire-Sale….

May 17, 2017


People like me, who consider themselves brutal truth speakers (for the most part, we are all coloured by our perceptions), have long been pooh-poohed by all and sundry in India as party-pooping nay-sayers when we said things like this:

@India’s so called Suck-Cess stories, from the largest conglomerates to the booming and now busting IT sector we simply driven by cheap loans given to them by vested interests from outside India, aka the Bankster mafia.

Whether it was the crazy spread of the mobile phone/smart phone, consumer goods, consumer electronics, cheap holidays, home loans for all and sundry…. all of it was driven by banksters looking to get India into a debt trap it could never escape.

I have blog posts from 3/4/5 years ago where I have pointed out and bemoaned this.

Now, the chicken, headless of course, is coming home to roost and not-so-Shy Lock wants his pound of flesh… meaning, India’s servitude and colonization, 70 years ago by the gun, sword and cannon, is now by debt. Crushing debt burdens, as obvious from the now crumbling western suck-cess story in general and the great American debt-splurge induced now static and fast declining economy in particular, is a big tell.

Usury is a disease, and it’s heartless practitioners are a diseased set of humans. Until we do something about this usurious cancer on the world body, nothing will change. Money is the god, the thing that makes it all go round. Or so they, of vested interests and their serf/implementors currently in “power” will have us believe.

Usury is a parasite that always kills it’s host, history is replete with examples….

Well, what articles such as the one linked below tell us, the usurious  bankster squeeze on India has well and truly begun, at the behest of the banker mafia led by it’s chief mafioso’s in Basel via the Bank of International Settlements via it’s Indian Poodle, the Reserve Bank of India……

Is there a way out? Good question and one that each of us needs to ask of ourselves, deeply…..

But you can take this to the bank, India’s new chapter of serfdom tot he west via debt bondage is now coming out into the open…. the gloves are off and so is the velvet…. it’s all brass knuckled recovery from here on out….

The biggest ever fire sale of Indian corporate assets has begun, to tide over bad loans crisis

The Anil Ambani-led Reliance Group alone owes Rs 1,21,000 crore of loans to the banks. File Photo

‘For sale’ tags on airports, roads, ports, steel plants, cement units, refineries, corporate park, among others, are visible.

We are seeing what is effectively India Inc.’s biggest ever fire sale. It’s even bigger than the government’s planned divestment target.

The Reserve Bank of India’s (RBI) has decided to clean up the balance sheets of Indian banks, which are collectively saddled with Rs five lakh crore of bad loans, by the end of this fiscal. So, the banks have started cracking the whip on Indian companies for repayment of loans. For most affected firms and groups, this will mean they will be forced to sell prized assets to repay their ballooning debts.

We are seeing ‘for sale’ tags on airports, roads, ports, steel plants, cement units, refineries, malls, corporate parks, land banks, coal mines, oil blocks, express highways, airwaves, Formula One teams, hotels, private jets, and even status symbol corporate HQs. Substantial stakes in firms, and in some cases entire companies, are on the block.

The Hindu reviewed leading corporate houses with billion-dollar loans riding on them, and the results are startling. The top 10 business house debtors alone owe Rs 5,00,000 crore to the banks. They will be forced to sell assets worth over Rs 2,00,000 crore.

Reliance Group (Anil Ambani)

The Anil Ambani-led Reliance Group alone owes Rs 1,21,000 crore of loans to the banks and had an annual interest liability of Rs 8,299 crore against earnings before income tax of Rs 9,848 crore. Some of the group’s firms, like Reliance Infrastructure and Reliance Defence, don’t earn enough to service the interest outgo.

Assets put on sale by the Reliance Group include about 44,000 telecommunications towers (valued at Rs 22,000 crore) and optic fibre and related infrastructure (Rs 8,000 crore) from Reliance Communications (RCom), its flagship firm. Weighed down by about Rs 40,000 crore of debt, RCom has posted a loss of Rs 154 crore in FY14-15, and has continued to post losses in the first three quarters of FY 15-16, accumulating losses of over Rs 2000 crore until December 31, 2015; it is likely to end that fiscal with a net loss too. The company is valued at Rs 13,440 crore, less than a third of its total debts. However, RCom plans to reduce its debts to Rs 10,000 by selling Rs 30,000 crore of telecom assets.

Reliance Infrastructure (R-Infra) is sitting on a pile of debt of Rs 25,000 crore as of February. In November 2015, it agreed to sell a 49 per cent stake in its electricity generation, transmission and distribution business in Mumbai and adjoining areas to Canadian pension fund Public Sector Pension Investment Board (PSP Investments). The transaction is expected to reduce debt of Rs.7,000 crore attached to the distribution business. It agreed to sell its cement business to Birla Corporation for Rs 4,800 crore in February, and is looking to sell its entire roads portfolio, valued at Rs 9,000 crore, for which three international bidders have been short-listed. R-Infra’s EBIT stands at Rs 1,686 crore, against interest liability of Rs 1,974 crore. Its market capitalisation at Rs 14,476 crore is Rs 10,000 crore lower than its debt. By sale, of cement, road and the Mumbai power distribution businesses, the company expects to be debt free on standalone basis by the end of this fiscal.

Reliance Capital, with debt of Rs 24,000 crore has sold stakes, in phases, in its mutual fund and life insurance businesses to Nippon Life Insurance for Rs 3,461 crore to allow the latter to increase its stake to 49 per cent in each of the businesses. It further plans to raise another Rs 4,000 crore by the end of 2016-17 by selling non-core assets, including proprietary investment book and by inducting a partner in its general insurance business. Reliance Capital’s debt includes its lending portfolio – commercial lending and housing finance- of about Rs 18,000 crore and claims to have a debt-equity ratio of 1.77, the lowest in the industry, as of December 31, 2015.

Mr Ambani is also looking to exit the media and entertainment businesses, under Reliance Broadcast Network Ltd (RBNL), for Rs 1,500 –Rs 2,000 crore.

His foray into defence — the recently-acquired Pipavav Defence & Offshore Engineering, rechristened Reliance Defence — is sitting on debt of Rs 6,800 crore against its current market capitalisation of Rs 4,895 crore. The loss-making company with negative EBIT of Rs 306 crore has an interest liability of Rs 347 crore a year.

Ruia’s Essar group (Shashi and Ravi Ruia)

Shashi and Ravi Ruia’s Essar group has gross debt of Rs 1,01,461 crore. The group is looking to sell about 50 per cent stake of its family silver, i.e., Essar Oil’s 20mtpa (million tonnes per annum) Vadinar refinery, for Rs 25,000 crore. It also plans to bring in a financial partner for its 10mtpa steel business that currently has a debt of Rs 40,000 crore; a 49 per cent stake in the steel facility will be valued at about Rs 25,000 crore. The debt-laden group is also looking to sell stake in its ports business. Essar Steel and Essar Oil each account for one-third of the group debt, and Essar Power, one-fifth.

Read on: Article is slightly dated, but this process is only going to accelerate….

2 Comments leave one →
  1. Jamie permalink
    May 17, 2017 8:48 pm

    The only way to collapse their usury system is to get out of their social constructs.. Stop paying the Usurers fee. Make them work for a living rather than allowing them to surreptitiously sink their tiny fangs into the mind of their naïve and gullible hosts.
    As the mind goes, so goes the heart and then soul of the “chosen One’s” host.
    They are a goddamned blight on this planet and I hope Enlil takes them home very soon.
    If not, then we had better do something before the world ends or else carry this filthy system forward into the next life.

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