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Foxconn hit as Chinese imports held up

U.S. lobby groups complain to govt. as Apple supplier impacted; officials say situation to ease soon

India’s additional scrutiny of imports from China has disrupted operations at plants owned by Apple supplier Foxconn in India, three sources told Reuters, and other foreign firms are also facing delays amid tensions between the two countries.

Customs officers at Indian ports have held back shipments from China and sought additional clearances after deadly clashes at the disputed Himalayan border last month. The checks have been imposed without any formal order.

While several companies such as Apple and Dell have been battling to free stuck shipments, hundreds of employees at Taiwanese contract manufacturer Foxconn’s two plants in the south had no major work to do this week as shipments were delayed, sources said.

More than 150 Foxconn shipments — containing smartphone and electronic parts — were stuck at Chennai port, though some are being cleared slowly now, the first source said. The total number of parts in the shipments was not clear.

T.N., Andhra plants

Foxconn’s two plants in Tamil Nadu and Andhra Pradesh mainly assemble Apple and Xiaomi smartphones and employ thousands of workers, many of whom stay in company-provided accommodation.

“Foxconn was in a very bad state … lots of workers stayed at the dormitory because there was no work,” said the first source.

Foxconn, Apple and Xiaomi did not respond to Reuters queries.

The Finance Ministry also did not respond. Two officials at the Ministry, which oversees the customs department, said the inspection measures were temporary and will ease soon.

“We cannot keep checking 100% of shipments forever … Shipments of non-Chinese companies being impacted will be cleared on priority,” said one official.

The delays come when companies in India had already been battling disrupted supply chains due to shutdowns. Business activity has only just begun to pick up.

Prominent U.S.-India lobby groups and local industry bodies have urged the Indian government to intervene.

While some delayed Dell shipments have been cleared since last week, the company had roughly 130 shipments stuck this week at Indian ports, the second source said. This included around six shipping containers with parts for servers and desktop computers, the person added. Dell did not respond to a request for comment.

Separately, MG Motor, owned by China’s SAIC, also has some shipments stuck at a port, a source close to the company told Reuters. MG started selling cars in India last year and has committed $650 million in investments.

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Voda-Idea FY20 loss at ₹73,878 cr.

‘AGR liability casts doubt on firm continuing as going concern’

Vodafone Idea, the country’s third-largest telecom operator, reported a staggering ₹73,878 crore net loss for the fiscal ended March 2020, likely the highest ever by any Indian firm, after it provisioned for Supreme Court-mandated statutory dues.

The firm, which has to pay ₹51,400 crore in adjusted gross revenue dues (AGR) after the apex court ordered the non-telecom revenue be included in calculating statutory dues, said the liability has ‘cast significant doubt on the company’s ability to continue as a going concern.’

Vodafone Idea‘s quarterly losses widened to ₹11,643.5 crore for the fourth quarter ended March 31, 2020 compared with the ₹4,882 crore loss in the year-earlier period. Gross revenue declined to ₹11,754 crore (₹11,775 crore).

For the quarter, the underlying operating expenses, excluding licence fee, spectrum usage charges and roaming and access charges stood at ₹2,100 crore lower compared with the year-earlier period.to Q1FY19.

As on March 31, 2020, the company’s gross debt stood at ₹1,15,000 crore, including deferred spectrum payment obligations of ₹87,650 crore.

Due to network issues the company lost a large number of subscribers. The subscriber base in Q4FY20 declined to 291 million from the 304 million in Q3FY20.

Ravinder Takkar, managing director & CEO, Vodafone Idea Ltd., said, “We continue to actively engage with the government seeking a comprehensive relief package for the industry, which faces critical challenges.”

The company said the spead of COVID-19 will have no material impact on its overall performance.

(With PTI inputs)

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Banks sanction ₹1 lakh-cr. loans to 30 lakh MSMEs

‘₹45,860 crore disbursed till June 26’

The Finance Ministry on Tuesday said banks have sanctioned more than ₹1 lakh-crore loans under the ₹3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under COVID-19-induced economic slowdown.

As much as ₹45,860 crore was disbursed under the 100% ECLGS for the micro, small and medium enterprises (MSMEs) till June 26, it said.

The scheme is the biggest fiscal component of the ₹20-lakh crore ‘Aatmanirbhar Bharat Abhiyan’ package announced by Finance Minister Nirmala Sitharaman last month.

The latest number on ECLGS, as released by the Finance Ministry, comprises all the 12 public sector banks (PSBs), 20 private sector banks and eight NBFCs.

“Under the 100 per cent ECLGS backed by a government guarantee, banks from public and private sectors have sanctioned loans worth over Rs 1 lakh crore as of June 26, 2020, of which more than Rs 45,000 crore has already been disbursed,” the finance ministry said in a statement.

This would help more than 30 lakh MSME units and other businesses as they restart operations post the lockdown, it said.

PSBs have sanctioned loans worth ₹57,525.47 crore whereas the private sector lenders have sanctioned ₹44,335.52 crore under the ECLGS, which started on June 1, it said.

As on June 26, the PSBs have disbursed ₹29,232 crore and private sector peers ₹16,628 crore.

The top lenders under the scheme are State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank and HDFC Bank, it added. Market leader SBI had sanctioned ₹19,593 crore and disbursed ₹12,026 crore as on June 26. It is followed by Bank of Baroda with sanctions at ₹7,273 crore and disbursement at ₹2,695 crore.

State-wise, business units of Maharashtra have got the highest cumulative sanction of ₹6,179 crore from banks, while disbursement was to the tune of ₹2,774 crore at the end of June 26.

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‘Govt. must allow airlines commercial freedom’

India risks survival of carriers if curbs remain, says CAPA

The government must cease to control commercial decisions of India’s airlines to ensure their survival following the financial setbacks caused by the air travel restrictions necessitated by the COVID-19 pandemic, aviation consultancy CAPA India warned on Monday.

“Allowing complete commercial freedom is a must for the revival of airlines in India. No other major aviation market in the world imposes such barriers on their own carriers,” the firm said.

The removal of curbs would enable airlines to tap into sources of ancillary revenue such as extending zero-baggage fares — which would allow passengers with no baggage to benefit from lower fares, while those with baggage would pay an extra fee thus providing airlines a new source of income.

CAPA estimates that Indian carriers could generate $400 million more a year if they were able to offer zero baggage fares. Indian carriers have struggled to tap ancillary revenues because of curbs by the government, which is sensitive to any increase in fares. In 2015, DGCA allowed airlines to offer zero baggage fares but later rescinded the decision.

Airlines have over the years been able to unbundle many services and earn ancillary revenue, such as extra fee for seats with leg room and meals onboard.

CAPA also reiterated the need to mandate that airlines have a minimum cash reserve to be able to renew their operator’s permit.

“CAPA has repeatedly recommended this since 2010. Most airlines today are technically bankrupt and are starved of cash to be able to operate. This is what drives them to discount fares, locking them in a cycle of instability. Unfortunately, this is not recognised at a policy level,” the consultancy added.

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Government allows export of COVID-19 PPE medical coveralls

All other items that are part of PPE kits continue to remain prohibited, it said.

Partially relaxing export norms, the government on Monday permitted shipments of Personal Protection Equipment (PPE) medical coveralls for COVID-19 with a monthly export quota of 50 lakh units.

The product was banned for export earlier, but it has now been moved to the restricted category.

Also read: Coronavirus | PPE given to all healthcare workers, State tells HC

In a notification, the Directorate General of Foreign Trade (DGFT) said: “A monthly quota of 50 lakh PPE medical coverall for COVID-19 units has been fixed for issuance of export licence to the eligible applicants to export PPE medical coveralls for COVID-19 as per the criteria to be separately issued in a trade notice“.

All other items that are part of PPE kits continue to remain prohibited, it said.

Commerce and Industry Minister Piyush Goyal tweeted: “Boosting Make in India exports, PPE medical coveralls for COVID-19 have been allowed with a monthly export quota of 50 lakh.”

 

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Miffed? You can change your insurer

Portability offers a choice but before taking the leap, here are some points to note

Recently, Gaurav Gupta, a 36-year-old professional thought of porting his 4-year-old health insurance plan as he was not happy with the services offered by his current insurer.

The dissatisfaction began a few months back with his wife Prerna (34) being hospitalised for a minor gallstone surgery and the insurer refused to pay the full claim amount as there were co-pay and sub-limits attached to the policy, which he was unaware of. His policy had a sub-limit on room rent with the maximum limit of ₹5,000/day. However, unaware of the room-rent sub-limit he chose to get his wife admitted in a private suite of the plush hospital that cost him ₹12,000/day.

Know your co-pay terms

As per policy wordings, he had to pay the remaining ₹7,000/day from his own pocket. Also, his policy had a mandatory co-pay clause of 10% — meaning Gaurav would have to pay 10% of the total claim from his own pocket. Soon after this experience, Gaurav wanted to change his insurer. However, all porting requests will be subject to underwriting guidelines and every insurer has the complete right to accept or reject a consumer’s port-in request.

It has also often been observed that most health insurers are only keen on insuring young and healthy individuals as apparently the chances of their falling ill and filing a claim are quite low. Many insurers, at times, do not accept policy portability requests from those who are old and have poor health conditions.

Or at times, they attach numerous clauses and restrictions; as a result, people get discouraged and drop the entire idea of porting their health insurer. There are many things that must be kept in mind before filing for a porting request.

As a customer, it is quite important for you to know that when you request for porting, the application undergoes several underwriting procedures and based on findings of these procedures, the insurer approves or rejects your request.

You can even port your cover during the ongoing crisis if you are not satisfied with the services of the insurer.

The entire process can be done through the digital services offered by the insurer.

Enhance sum insured

While applying for portability, you must think of enhancing the total sum insured (SI) provided you have a family floater plan with limited sum insured.

However, you must know that the increase in SI is totally subject to acceptance by the insurer’s underwriter.

While most insurers do not reject the request if the increase is justified i.e. up to 50-70%, requests demanding 100-200% increase in the SI may be rejected by the insurer. It also depends upon the claims made in the past.

If the request is made for a claim-free policy, the chances of your request getting approved are quite high.

Every health insurance policy comes with a pre-defined waiting period. Usually there are three types of waiting period in a health insurance policy. First, a 30-day waiting period for fresh claims; second, up to two years for some specified ailments and procedures; and third, up to four years for pre-existing illnesses.

If you are planning to port, make sure you give due consideration to the new insurer’s waiting period. In most cases, if you have already served the waiting period with the previous insurer, you do not have to again serve the period for the new insurer. If the SI is same as the previous policy, there is no waiting period but if the SI in the new policy is more than in the previous policy, the waiting period applies.

Features offered

Always choose a policy that offers both hospitalisation and all day-care procedures without any sub-limits and has no mandatory co-pay feature which means the insurer will pay the entire claim amount up to the sum insured. Always look for a policy that offers the maximum possible benefits such as providing cover for pre and post-hospitalisation expenses.

(The author is health business head, Policybazaar.com)

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Ahok Leyland to focus on exports, electric buses

Firm to unveil next generation light truck platform Phoenix in September

Ashok Leyland Ltd. (ALL), the flagship company of the Hinduja Group, will be giving more thrust to exports and electric buses, expanding its light commercial vehicle (LCV) portfolio and introducing its next generation light truck platform Phoenix in September, a top official said.

“We have an unshakable vision of being one among the top global commercial vehicle players through differentiated products and solutions,” said Vipin Sondhi, MD and CEO. “That vision remains unchanged. Therefore, we have to expand beyond the geographies of the country. We have a presence in the Middle East and some parts of Africa. We are going to intensify it,” he added..

“Over a five-year period, international operations will be a focus area. This, we will enable through left-hand drive (LHD) and right-hand drive (RHD). Phoenix is both. The AVTR, a modular truck platform, is also design-protected to do LHD as well. We are preparing ourselves to gear up for an emphatic assessment of international operations. We had virtual meetings with major dealerships in SAARC, Middle East and African countries. We will strengthen our operations as we go,” Mr. Sondhi said.

ALL, which has been working on Phoenix — a 5-7 tonne LCV, had timed the launch for March but COVID-19 came into play. “We are ready with Phoenix. Perhaps in the next three months, it would be rolled out,” the CEO said.

On the electric bus, he said it was plying in Ahmedabad and Chennai. ALL would keep the e-bus programme alive by working on technologies. Over a five-year period, it would step up its expansion into international markets.

While expecting that each forthcoming quarter would augur well for ALL, he said: “We have the right products and an engaged and motivated dealership network with a strong supplier base. What we have to ensure is that we come out strongly in quarter four so that we spring forward in FY22”.

Mr. Sondhi expects demand for trucks to rise once the government relaxes lockdown restrictions.

To a question regarding the litigation between the Hinduja brothers and its potential impact on ALL’s operations, he said: “As far as businesses are concerned, these are managed professionally. At Ashok Leyland, we have seven independent directors on our board. The matter is a private family matter, which is being addressed by the family.”

Asked about import of components or spares from China, he said ALL was not really dependent upon China.

Gopal Mahadevan, chief financial officer, said that while the company had planned a capital expenditure of ₹1,317 crore last year, actual spending was scaled down to ₹1,227 crore.

During the current fiscal, ALL had almost completed its major capital expenditure, which included the Phoenix and BS VI initiatives. Some amount would be invested in residual capacity this year. The exact numbers would be divulged in the second quarter, Mr. Mahadevan said.

ALL also expects more defence business. he added.

Mr. Mahadevan said that ALL had net debt of ₹2,050 crore as of March 31, 2020, adding that there were no plans for raising fresh capital.

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Hindustan Unilever to drop ‘fair’ from ‘Fair and Lovely’product line

The brand name change is subject to regulatory approvals, the company said

The Indian unit of Unilever said on Thursday it will drop the word “fair” from its “Fair & Lovely” range of products, which have long been criticised for promoting negative stereotypes against people with darker skin.

The move comes as cosmetics companies have seen an increasing amount of backlash on social media in the wake of the Black Lives Matter movement.

Also read: Black lives and the experiment called America

“We are making our skin care portfolio more inclusive … a more diverse portrayal of beauty,” Hindustan Unilever Chairman Sanjiv Mehta said in a statement. The company also sells the popular Dove and Knorr range of products.

Sources had told Reuters earlier that the company was considering such changes.

Products marketed as skin lightening have a huge market in South Asia due to a societal obsession with fairer skin tones, but those notions are being questioned more frequently.

“We recognise that the use of the words fair, white and light suggest a singular ideal of beauty that we dont think is right, and we want to address this,” Sunny Jain, Unilever’s president of its beauty and personal care division, said in a separate statement.

Unilever’s ‘Fair & Lovely’ brand dominates the market in South Asia. Similar products are also sold by L’Oréal and Procter & Gamble.

The ‘Fair & Lovely’ brand name change is subject to regulatory approvals, Hindustan Unilever said. The company did not say what the new brand name would be.

Separately, a source within L’Orşal in India said the company was also having discussions in view of the backlash.

Also read: HUL steps up effort in its war against COVID-19 in India

“Words such as skin brightening, whitening, lightening could soon become a thing of the past on all labels and product sales pitches,” the source said.

L’Orşal India declined to comment. An email to L’Oréal in France did not elicit an immediate response.

Johnson & Johnson said this month it would stop selling skin-whitening creams.

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Gilead Sciences To Acquire 49.9% Stake In Pionyr Immunotherapeutics For $275 Mln – Quick Facts

Gilead Sciences, Inc. (GILD) announced Tuesday that it will acquire a 49.9 percent equity interest in Pionyr Immunotherapeutics Inc., a privately held company developing first-in-class cancer immunotherapies, for $275 million. It also has an exclusive option to purchase the remainder of Pionyr.

Under the agreement, Pionyr’s shareholders may receive up to an additional $1.47 billion in option exercise fees and future milestone payments.

Pionyr is pursuing promising, novel biology in the field of immuno-oncology. Its Myeloid Tuning therapies have the potential to treat patients who currently do not benefit from checkpoint inhibitor therapies. PY314 and PY159 have demonstrated preclinical efficacy, suggesting potential in solid tumors in combination with established anti-PD(L)-1 agents.

Pionyr plans to file investigational new drug (IND) applications with the U.S. Food and Drug Administration for both PY314 and PY159 in the third quarter of this year.

Pending Phase 1b results from either candidate or sooner if Gilead chooses, Gilead can exercise its exclusive option to acquire the remainder of Pionyr for a $315 million option exercise fee and up to $1.15 billion in potential future milestone payments.

In addition, Gilead will provide Pionyr with additional funding for the PY314 and PY159 clinical programs, as well as ongoing research and development programs.

The transaction is subject to customary closing conditions and is expected to close shortly. Gilead will have the right to nominate one individual to Pionyr’s Board of Directors upon closing of the transaction.

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AES Corp. To Sell Stake In Indian Coal-fired Power Plants; Backs FY20 Adj. EPS Outlook

AES Corp. (AES) said Tuesday that it has agreed to sell its entire equity interest in the 1,740 MW OPGC 1&2 coal-fired power plants in Odisha, India to Adani Power Limited. Through this sale, AES’ generation in MWh from coal will be reduced to 35 percent of total generation, from 45 percent.

“Today’s announcement is a very significant step toward achieving our ambitious short- and longer-term decarbonization goals. By continuing to sell and decommission coal plants, while building 2-3 GW of renewables per year, and creating and implementing new technologies, we are fulfilling AES’ mission to accelerate the transformation to a greener and more sustainable world,” said Andrés Gluski, AES President and Chief Executive Officer.

AES had previously said it plans to reduce its generation from coal to below 30 percent by the end of this year, and to less than 10 percent by the end of 2030.

AES owns a 49 percent equity interest in OPGC 1&2, while the Government of the State of Odisha owns the remaining 51 percent stake. This transaction is subject to customary approvals and the consent of the Government of the State of Odisha.

AES said it had previously assumed the sale of these power plants in its 2020 guidance and longer-term expectations.

Accordingly, the company reaffirmed its outlook for 2020 adjusted earnings per share of $1.32 to $1.42, its 2020 Parent Free Cash Flow expectation of $725 million to $775 million, and its expectation for average annual growth of 7 percent to 9 percent in adjusted earnings per share and Parent Free Cash Flow through 2022.

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