Four laning of Hospet-Bellary section of National Highway – 63 in Karnataka



Four laning of Hospet-Bellary section of National Highway – 63 in Karnataka
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for development of the four laning of the Hospet-Bellary-Karnataka/Andhra Pradesh Border section of National Highway – 63 in Karnataka. 

This work will be under the National Highways Development Project (NHDP) Phase-IV. The approval is on Engineering, Procurement and Construction (EPC) basis.

The cost is estimated to be Rs.1621.96 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road will be approximately 95.37 kms. It is estimated that 4,076 mandays are required for construction of one kilometre of highways. As such, employment potential of 3,88,728 (approx.) mandays will be generated locally during the construction period.

The main object of the project is to expedite the improvement of infrastructure in Karnataka and also in reducing the time and cost of travel for traffic, particularly heavy traffic, plying on the Hospet-Bellary-Karnataka/Andhra Pradesh Border sector of NH-63. The development of this stretch will also help in uplifting the socio-economic condition of the concerned regions of the State and would also increase employment potential for local labourers for project activities. 

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Issue of equity shares of Andrew Yule & Co. Ltd. as preferential issues to Bank of Baroda as Qualified Institutional Buyer
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for conversion of Working Capital Term Loan (WCTL) amounting to Rs.29.91 crore from Bank of Baroda (BoB) into equity by issuing requisite number of equity shares of Andrew Yule & Co. Ltd. (AYCL) as preferential issues to BoB as Qualified Institutional Buyer. The price will be based on market price determined as per Securities and Exchange Board of India (SEBI) Guidelines on the date of acquiring of shares by BoB with face value of Rs.2/- per share.

Conversion of WCTL into equity will:

(i) Bring down the cost of debt servicing by AYCL by Rs.2.86 crore per annum, resulting in improved profitability and liquidity of AYCL in coming years and thereby providing an opportunity to finance working capital needs of existing and new businesses.

(ii) Result in improved Debt Equity ratio for AYCL. This along with substantial amount of Securities Premium will form part of net worth of Company and will enhance the strength of its balance sheet.

This is expected to increase growth and profitability of AYCL and in turn is likely to translate into better share price of AYCL at the time of further disinvestment of GoI shares of AYCL as per SEBI Guidelines. This will be implemented within a period of three months.

Background: 

AYCL, established in 1863, became a Public Sector Enterprise in 1979 and is presently engaged in manufacturing of Industrial Fans, Ventilation Equipment, Air Pollution Control Equipment & Systems, Effluent Treatment Plants, Power & Distribution Transformers, High Tension and Low Tension, Switchgears and Circuit Breakers, Auto Voltage Regulators and allied equipment and production of Bulk Tea. Paid up capital of the Company is Rs.66.73 crore in which GoI holding is 87.98%. AYCL shares (Face value of Rs.2/- each) are listed in Mumbai Stock Exchange.

AYCL was referred to Board of Industrial and Financial Reconstruction (BIFR) in September, 2004. Subsequently, the Board for Reconstruction of Public Sector Enterprises (BRPSE) recommended a Restructuring Scheme for AYCL which was approved by Cabinet in February, 2007 and by BIFR in October, 2007. With implementation of Restructuring Scheme, AYCL has been continuously earning from 2007-08 onwards. AYCL has come out of purview of BIFR on 8.7.2015.

As a part of implementation of Financial Restructuring Scheme, Bank of Baroda extended a loan of Rs.52.49 crore to AYCL in 2009, out of which Rs.29.91 crore was Working Capital Term Loan. With the approval of its Board of Company, AYCL has proposed for conversion of WCTL of Rs.29.91 crore it has taken from BoB into Equity. The conversion should take place at the price determined by SEBI guidelines on the date of acquiring of shares by BoB. This proposition has been agreed to by BoB. 

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Acquisition of 51% shareholding by M/s. ATC Asia Pacific Pte. Ltd., Singapore in M/s. Viom Networks Ltd.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval to the proposal of M/s. ATC Asia Pacific Pte. Ltd. Singapore for acquisition of 51% of shareholding in M/s. Viom Networks Limited by way of transfer from existing shareholders.

The approval would result in a total foreign direct investment inflow of Rs.5,856.51 crore into the telecom infrastructure of the country which will spur economic growth, besides fostering inclusiveness and equity. 

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