Business activities across borders are done through letter of credit. Letter of credit is an instrument issued in the favor of the seller by the buyer bank assuring that payment will be made after certain timer frame depending upon the terms and conditions agreed, it could be either at sight, 30 days from the Bill of Lading or 120 days from the date of bill of lading. Now when the seller receives the letter of credit through bank, seller prepares documents and presents the same to the bank.
The most important element in the same is the bill of exchange which is used to negotiate a letter of credit. Seller discounts that bill of exchange with the bank and gets money. Discounting bill terminology is used for this purpose. Now it is seller’s bank responsibility to send documents and bill of exchange to buyer’s bank for onward forwarding to the buyer for the acceptance and the buyer finally, accepts bill of exchange drawn by the seller on buyer’s bank because he has opened that LC. Buyers bank than get that signed bill of exchange from the buyer as guarantee and release payment to the sellers bank and waits for the time span will buyer will pay the bank against that bill of exchange.
Friday, November 7, 2008
Tuesday, September 9, 2008
Restructuring to unlock value for all shareholders: Vedanta
Vedanta Resources will create three commodity focus groups. The company will demerge alumina, energy business of Sterlite Industries. The company has announced USD 9.8 billion aluminium capex programme and aims to raise aluminium smelting capacity by 2.6 million tonnes per annum by 2012.
Vedanta will also transfer 79.4% stake in Konkola Copper Mines to Sterlite, he added. Sterlite shareholders will get seven shares of Malco for four shares held in Sterlite. On the other hand, Malco shareholders will get one Sterlite share for every 51 held. The scheme will be effective from April 1 2009, he said.
Anil Agarwal, Chairman said that Asarco buy will be closed by year-end. He said, "We are looking to invest Rs 115,000 crore for which we have already invested Rs 40,000 crore. We have Rs 30,000 crore in cash and we are going to invest Rs 75,000 crore further in three years’ time. We will have 1 million tonne of copper, 1 million tonne of zinc and 26 lakh tonne of aluminium. We have also kept a provision to acquire Asarco for USD 2.6 billion.”
Tarun Jain, CFO, Vedanta Resources has said that some part of Bharat Aluminium Company Limited (BALCO) option has been considered by valuers and there are no plans for raising equity in Sterlite Aluminium
Vedanta will also transfer 79.4% stake in Konkola Copper Mines to Sterlite, he added. Sterlite shareholders will get seven shares of Malco for four shares held in Sterlite. On the other hand, Malco shareholders will get one Sterlite share for every 51 held. The scheme will be effective from April 1 2009, he said.
Anil Agarwal, Chairman said that Asarco buy will be closed by year-end. He said, "We are looking to invest Rs 115,000 crore for which we have already invested Rs 40,000 crore. We have Rs 30,000 crore in cash and we are going to invest Rs 75,000 crore further in three years’ time. We will have 1 million tonne of copper, 1 million tonne of zinc and 26 lakh tonne of aluminium. We have also kept a provision to acquire Asarco for USD 2.6 billion.”
Tarun Jain, CFO, Vedanta Resources has said that some part of Bharat Aluminium Company Limited (BALCO) option has been considered by valuers and there are no plans for raising equity in Sterlite Aluminium
Monday, September 8, 2008
Lotus India AMC does not expect mkt rally to last long
Ajay Bagga, CEO, Lotus India AMC, said the underlying economics or fundamentals are still quite rocky. “I don’t expect this rally to last too long. It is a relief rally globally, and could take us higher. The fundamentals need to be worked out and that will take time. The credit and liquidity contraction that is happening can’t be whished away and that will take time to go away.”
Sanjeev Agarwal, Head-Equity, Globe Capital Markets, said this market is working as per technical levels. "We may see little sideways action in coming weeks before the markets actually forms newer lows. We will retain our bearish stance unless the market crosses 4,650. Currently, the market is seeing a bounceback from 3,800. So, one leg down is still left. In the last 10-15 days, there has been a lot of selling by FIIs. After a strong lull, we are seeing renewed vigour coming into selling. The markets are completely in favour of a bearish set up. Right now, one should be very careful about any longs. Safer players may look at buying puts and the more adventurous ones can go for selling Nifty shorts."
Sanjeev Agarwal, Head-Equity, Globe Capital Markets, said this market is working as per technical levels. "We may see little sideways action in coming weeks before the markets actually forms newer lows. We will retain our bearish stance unless the market crosses 4,650. Currently, the market is seeing a bounceback from 3,800. So, one leg down is still left. In the last 10-15 days, there has been a lot of selling by FIIs. After a strong lull, we are seeing renewed vigour coming into selling. The markets are completely in favour of a bearish set up. Right now, one should be very careful about any longs. Safer players may look at buying puts and the more adventurous ones can go for selling Nifty shorts."
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