Uber said it will lay off 3,700 employees, affecting 17 per cent of its workforce, as the coronavirus pandemic decimates its business. India’s leading automakers resumed production as the government allowed some businesses to open in the lockdown. Reliance Industries Ltd said private equity firm Silver Lake will invest nearly $750 million in its digital arm. Banks contacted top retailers to evaluate a possible merger with Future Retail after the company’s promoter Kishore Biyani defaulted on loans. Here is more on what made news this week.
- Maruti Suzuki said it would resume production at its plant in Haryana’s Manesar on May 12, joining a clutch of other auto companies that are returning to business as a national lockdown is eased. Hero MotoCorp, Mercedes Benz India, Eicher Motors, TVS Motor, and Isuzu Motors India too said they have permission from state governments to resume operations.
- Uber Technologies will cut about 3,700 full-time jobs, affecting 17 per cent of its workforce, as the coronavirus pandemic decimates its ride-hailing business. The company said the layoffs included its customer support and recruiting teams, and expects to incur about $20 million in costs for severance and related charges. CEO Dara Khosrowshahi will forgo his base salary for the remainder of the year.
- India’s services activity suffered a shock collapse in April as the coronavirus lockdown crippled global demand, a private survey showed. The IHS Markit Services Purchasing Managers' Index plunged to 5.4 in April from March's 49.3, an unprecedented contraction since the survey first began over 14 years ago.
- State Bank of India is working on 25 proposals, totalling at least Rs 5,000 crore, for credit to non-banking financial companies (NBFCs) while taking up requests for loan moratoriums on a case-by-case basis. The bank is also evaluating proposals for giving loans up to three years to finance companies that are facing cash flow problems, its executives said.
- Banks, which have significant exposure to Future Retail (FRL) and its promoters, are nudging the company to go for an all-stock merger with a retail company. Lenders tapped India’s top retailers to evaluate a possible merger after FRL promoter Kishore Biyani defaulted on loans in March and his company’s share price collapsed.
- Reliance Industries Ltd said private equity firm Silver Lake will invest nearly $750 million in its digital arm, days after securing a $5.7 billion investment from Facebook Inc, boosting its efforts to cut debt. Silver Lake’s investment, at a 12.5 per cent premium to the equity valuation of the Facebook deal, gives it slightly more than a 1 per cent stake in Jio Platforms.
- A proxy advisory and governance firm accused Subhash Chandra-led Essel group firm Zee Learn of mismanagement, cautioning investors that they "may need to wrestle the company out of the promoters’ control and influence.” Institutional Investor Advisory Services (IIAS) said, "Zee Learn’s board and management have not provided the requisite leadership resulting in poor capital allocation decisions, including a botched-up acquisition.”
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A few links for further reading
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