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COMPANIES 3

MUMBAI | WEDNESDAY, 21 DECEMBER 2016

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Note ban puts brakes


on scooters sales

After several months, Honda logs first decline in sales volume in November

AJAY MODI

New Delhi, 20 December

emonetisation appears to be
taking the fizz out of the fastgrowing scooter segment. Sales
of Hondas Activa declined for the first
time in several months.
This has also upset Activas position as the countrys most sold twowheeler for two consecutive
months, October and November.
Rival and former partner Heros
motorcycle Splendor has sold more
than the Activa in these months.
Domestic scooter sales had grown
by over 23 per cent in the first seven
months (April-October) of the financial year to a record 3.61 million. In
November, however, sales declined by
2 per cent.
The government had withdrawn
high-denomination currencies from circulation from November 9, impacting
cash transactions across sectors, including automobiles where down payments
are made by many buyers in cash. In
rural markets several transactions happen entirely in cash.
Scooters, unlike motorcycles, are an
urban phenomenon and there sales
were not impacted in the last two years
when the country had deficit rainfall.
They could not escape the brunt of
demonetisation, however.
For Honda Motorcycle and Scooter
India (HMSI), the largest scooter maker
in the country, sales of scooters to dealers declined in November, the first time
in many years. Its scooter sales slipped
2.2 per cent to 203,076, year on year. The
month on month decline in November
was much steeper at 28 per cent.
Honda Motorcycle and Scooter India,
the biggest two-wheeler player in the
country after Hero, gets 67 per cent of its
volumes from scooters.
In February this year, HMSI inaugurated its first dedicated scooter plant in
India in Gujarat. With expanded capacity, the company was hoping to post 20
per cent growth in 2016-17. Between
April and October, its domestic sales
grew by 20.8 per cent. This has slowed

DOMESTIC SALES

THE ENTIRE INDUSTRY


WILL FACE THE IMPACT
OF DEMONETISATION
BUT WE STILL REMAIN
CAUTIOUSLY OPTIMISTIC
ABOUT DOUBLE-DIGIT
GROWTH
Y S GULERIA
Senior vice-president
(sales and marketing), HMSI

Source: Siam

down to 18 per cent now.


The entire industry will face the
impact of demonetisation but we still
remain cautiously optimistic about double-digit growth, said YS Guleria, senior
vice-president, sales and marketing,
HMSI.
Activa held the tag of the countrys
most sold two-wheeler for nine consecutive months of this calendar year.
Splendor, the countrys most sold
motorcycle, reclaimed its position as
the most sold two-wheeler in both
October and November.
Considering the strong festive

demand in October, many of the companys dealers entered November with


zero stock of the Activa, the company
said. Two-wheeler dealers were
expected to replenish stocks in
November.
The company said it rationalised
capacity and dispatched two-wheeler
units according to market demand. It
increased exports by 81 per cent to
26,066 units to offset the decline in
domestic demand. This led to Hondas
sales remaining steady while taking care
of the financial health of our dealers,
said Guleria.

Air India to get ~80-cr


additional budget
support in FY17
ARINDAM MAJUMDER

New Delhi, 20 December

State-owned airline Air India will get only ~80


crore as additional budget support in the current financial year from the government way
below its demand of ~2,200 crore.
This is despite the fact Air Indias chairman
andmanagingdirectorAshwaniLohanihadwritten to the government that lack of funds might
derail the turnaround process of the airline. The
finance ministry accepted the civil aviation ministrys argument that additional fund was necessary for the airline but expressed its inabilitytoacceptthefulldemand,saidasenior
civil aviation ministry official.
According to AI officials, though,
the ~80 crore being offered is too negligible an amount to be invested in an
airline. While the government has said it
is ready support the airline, for that to happen the airline also needs to improve its performance.
The money comes from the Consolidated
Fund of India. Every company has to show some
performance to get more funding, said an official in the civil aviation ministry.
Lohani had written to the civil aviation ministry last month saying that because of the airlines huge debt burden, a reduced equity infusion would put the airlines expansion plan in
jeopardy.
He added that the airline would be forced to
raise temporary loans from the banks to bridge
the liquidity gap, thus endangering the liquidity

and survival of the company.


Air India has debt of ~46,000 crore and has
annual interest outgo of around ~4,000 crore.
The challenge before the Air India management is reducing debt. High interest and maintenance expenses have resulted in the airline
posting a net loss of ~3,837 crore in FY16. Air India
received ~1,713 crore in equity in the Union
Budget in February against its requirement of
~3,900 crore. The airline was expecting that the
remainder ~2,200 crore would be released in the
supplementary budget, but the finance ministry
has turned down the airlines request.
Lower equity infusion could result in
increased finance costs and impact the
turnaroundplan,theairlinetoldthegovernment. Air India is on a ~30,000-crore
government bailout package and has
till now received ~23,993 crore in equity
including~1,713croreinvestmentthisyear.
The infusion is meant to take care of cash
deficitandtobeusedforloanrepayment.Theairlinewashopingtoretiredebtwithequityinfusion
in 2016.
The airline was also looking at ways to reduce
the debt and was discussing restructuring debt
worth ~10,000 crore under the scheme for sustainable restructuring of bad assets floated by
the Reserve Bank of India. Simultaneously,
sources said the airline was in talks with the Life
Insurance Corporation for a loan of ~10,000 crore
for acquisition of aircraft.
Air India posted an operating profit of ~105
crore in FY16 but has succumbed to losses in the
first two quarters of the current financial year.

Airtel to acquire
Orascoms stake
in MENA
PRESS TRUST OF INDIA

New Delhi, 20 December

Bharti Airtel on Tuesday said


its subsidiary Network i2i
has entered into a definitive
agreement with Egyptian
firm Orascom to acquire the
latters entire equity stake in
Middle East North Africa
Submarine Cable Systems
(MENA-SCS) for an undisclosed amount.
The agreement has been
signedwithOrascomTelecom
Media and Technology
Holding.
With the explosion of
data usage in emerging markets, including India and
Africa, this (MENA) asset will
provide us a scalable and
diverse high capacity highway to serve our customers.
In particular, it will provide
impetus to Indias emergence
as a major regional internet
hub serving customers across
SAARC region, with seamless
global connectivity, Ajay
Chitkara, director and CEO,
Global Voice & Data Business
of Bharti Airtel said in a statement.
MENA-SCS is a 100 per
cent subsidiary of Orascom.
It is live and operational,
connecting Mumbai, Oman,
Saudi Arabia, Egypt and
Italy.

Vedanta Resources slapped with


$100-mn settlement in UK court
PRESS TRUST OF INDIA

London, 20 December

Indian mining giant Vedanta


Resources has been ordered
by the London High Court to
pay over $100 million to a
Zambian investment company related to a 2013 copper
price agreement, the stateowned firm claimed on
Tuesday.
Vedantas Konkola Copper
Mines (KCM) based in Zambia
has been ordered to pay
approximately $103 million to
Zambia Consolidated Copper
Mines Investments Holdings
(ZCCM-IH), the state-owned
mining investment firm
claimed.

ZCCM-IH has been successful in its application for


default judgement. KCM has
been ordered (on 16 December
2016) to pay all sums owed to

ZCCM-IH pursuant to the


Settlement Agreement (plus
associated contractual interest) within 30 days, a ZCCMIH statement said.

KCM has also been


ordered to reimburse ZCCMIH 80 per cent of the costs it
has incurred in pursuing its
claim.
Further directions have
been given to determine
whether KCM made payments
to Vedanta in breach of the
prohibition on doing so under
the Settlement Agreement,
the statement said.
If and to the extent it is
determined that such payments were made, ZCCM-IH
will be entitled to recover
additional sums from KCM,
it added.
London-listed Vedanta
Group is yet to comment on
the judgement.

Available on Leave and Licence


7200 sq ft, fully furnished, office space at
Paragon Centre, Worli.
Office is centrally located at P. B. Marg, close to
Doordarshan Tower and Bandra Worli Sea Link.
Interested
parties
please
write
to
nisarhanif@paragonproperty.in or call Mr. Nisar on
9819018104 or Mr Satose on 9819018103.
Web: www.paragonproperty.in

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To,
Date: 21.11.2016
1.
5/6, Poonam Heights, S.V.Road, Goregaon (West), Mumbai - 400 062
2.
1201, Interface Heights A, Link Road, Malad (West), Mumbai - 400 064
3.
1201, Interface Heights A, Link Road, Malad (West), Mumbai - 400 064
4.
Gala No. 7 & 8, Poonam Heights, Opp. MTNL, Goregaon (West), Mumbai - 400 062
1 We, duly registered with the Reserve Bank of India and incorporated under the provisions of the Companies

) are availed by You Nos. 1 to 4


6001647
Channel
Rs.
7,00,00,000/(Rupees Seven
Crores Only)

28.12.2011
29.12.2011
29.12.2011
29.12.2011
29.12.2011
29.12.2011
30.12.2011
30.12.2011
20.04.2012
20.04.2012
20.04.2012
31.07.2012
23.10.2012
28.12.2012
28.12.2012
28.03.2013
03.04.2013
30.05.2013
30.05.2013
30.09.2013
28.06.2014

Demand Promissory Note

TOTAL

6,40,25,115.11/-(Six


One hundred and



hereto.






in accordance with law and/or other Acts, whichever applicable please note.

tenancy or license or any other rights whatsoever, in or over the secured asset, or otherwise dealing with the secured assets in any manner whatsoever to




the limits of the P-South Ward of the Brihanmumbai Mahanagarpalika.