By Aditi Shah and Tim Hepher

NEW DELHI (Reuters) -India dampened foreign airline hopes for more access to its airports on Tuesday, with its aviation minister urging domestic carriers to fly long-haul and help establish new hubs as it seeks to recapture control of Indian travel from foreign rivals.

It is also asking aerospace companies to step-up local production and will soon finalise rules to safeguard rights of lessors on repossession of jets, in a bid to level up with major global aviation markets, Jyotiraditya Scindia told Reuters.

“India is now at that inflection point,” Scindia said during an interview at his office in New Delhi.

“We are going to see an explosion of air traffic in India in the years to come,” he said, adding he wanted domestic carriers to look at international expansion with greater focus.

The South Asian nation is one of the fastest-growing aviation markets in the world where demand for air travel is outstripping the supply of planes, but the bulk of international traffic is captured by global carriers with efficient hubs.

Now, India wants to harness these economic gains for itself by boosting growth of its airlines and airports.

Air India last month placed a record order for 470 jets and is making an aggressive push in the international market. Domestic rival IndiGo is also in talks for a new order of more than 500 planes, Reuters reported earlier this month, even as it waits to take delivery of the same number from an older order.

Scindia said India was not looking at increasing air traffic quotas with Gulf states and instead wanted Indian carriers to offer non-stop long haul flights on larger planes. He said Air India’s widebody plane order and IndiGo’s twin-aisles to some destinations were signs that “transition” had begun.

India is also mobilising to handle the transportation needs of its population of 1.3 billion by building new airports in the country’s remotest parts and expanding capacity at major ones.

Domestic and international passenger traffic through six major metro airports is expected to more than double to 420 million over the next five years and India’s fleet is set to grow to over 2,000 planes from 700 today, Scindia said.

He is working with some airlines and Delhi airport to create a hub and spoke model in the capital that will allow seamless transition of passengers hopping off domestic flights and on to their international connections and vice versa.

“Today my hubs are in either the eastern border of my country or the western border of my country. With the scale that I have, I must create a hub within India,” said Scindia.

But even with hundreds of new planes on order, and India’s history of airline failures such as Kingfisher and Jet Airways, Scindia said he was not concerned this would lead to any oversupply because the country’s economy, rapid urbanisation and underpenetrated air travel market would support growth.

“Earlier, airports and airplanes would only go to those cities that presented a great economic growth story to make the rationale for that investment. Today, it is airports and airlines that are determining economic growth,” said the 52-year-old minister.

“That whole paradigm has changed.”

(Reporting by Aditi Shah, Tim Hepher; Editing by Andrew Heavens and Mark Potter)

By Nell Mackenzie, Xie Yu and Scott Murdoch

LONDON (Reuters) – Distressed debt investors and large hedge funds are buying up Credit Suisse additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank’s rescue by cross-town rival UBS.

Under the UBS deal, the Swiss regulator determined that Credit Suisse’s AT1 bonds with a notional value of 16 billion Swiss francs ($17.35 billion) would be wiped out, a decision that stunned global credit markets and angered many holders of the debt, who believed they would be better protected than shareholders.

AT1 bonds, which can convert to equity, rank higher than shares in the capital structure of a bank. If a bank runs into trouble, bondholders will usually come before shareholders in terms of getting their money back.

AT1 bonds issued by other European banks tumbled on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of this type of debt.

The bonds, now trading at about 0.03 cents on the dollar, have become an opportunity for hedge funds, which are taking punts that the merger of UBS/Credit Suisse might not proceed or that the Swiss regulator might even reverse its decision, six traders and dealmakers said.

GRAPHIC: A trip from above par to pennies https://www.reuters.com/graphics/GLOBAL-HEDGEFUNDS/jnpwyjaoxpw/chart.png

Robert Southey, a broker at Southey Capital in London, said bonds worth several hundred millions dollars in face value had traded since Sunday afternoon, mainly between large U.S. investors, (referring to the nominal value of the bonds).

As the bonds are publicly traded, opportunistic buyers can hoover them up from funds and private banks looking to offload, said Southey.

Buyers have included a mixture of hedge funds and deep distressed debt funds, which Southey expected would need to hold the bonds for an extended period before they paid off.

Some of those buyers intend to join groups that would litigate to improve odds on cashing in on the bonds, Southey said. Law firm Quinn Emanuel is talking to AT1 holders about possibly recouping some of their losses via the courts.

“We’ve heard of other law firms receiving many inbound calls from holders and potential buyers,” he added.

Louis Gargour, the chief investment officer and managing partner of $550 million hedge fund LNG Capital, said that legal action could increase the spoils for investors swooping on Credit Suisse AT1s, but taking advantage of the sell-off in similar bonds issued by other banks was the wiser trade.

“The most compelling trade is other large independent well-capitalised European institutions such as Deutsche Bank, Societe Generale, and Intesa where you can achieve significant long-term yields by taking the view that AT1s will not be converted into equity,” said Gargour.

European regulators, including the European Central Bank, said on Monday they would continue to impose losses on shareholders before bondholders.

“Regulators have an interest in ensuring that the AT1 market continues to function, as these instruments are used by banks to maintain healthy capitalization levels,” said Shannon Kirwin, associate director at Morningstar.

“It’s quite possible that we will see demand from buyers of subordinated bank debt to have more explicit protections written into these bond prospectuses in the future.”

($1 = 0.9223 Swiss francs)

(Reporting by Nell Mackenzie; Additional reporting Karin Strohecker, Scott Murdoch in Sydney, Xie Yu and Summer Zhen in Hong Kong and Davide Barbuscia in New York; Editing by Sinead Cruise, Jane Merriman and Bradley Perrett)

By Stephen Nellis and Jane Lanhee Lee

SAN FRANCISCO (Reuters) -Nvidia Corp, the U.S. semiconductor designer that dominates the market for artificial intelligence (AI) chips, said it has modified its flagship product into a version that is legal to export to China.

U.S. regulators last year put into place rules that stopped Nvidia from selling its two most advanced chips, the A100 and newer H100, to Chinese customers citing national security concerns. Such chips are crucial to developing generative AI technologies like OpenAI’s ChatGPT and similar products.

Reuters in November reported that Nvidia had designed a chip called the A800 that reduced some capabilities of the A100 to make the A800 legal for export to China.

On Tuesday, the company said it has similarly developed a China-export version of its H100 chip. The new chip, called the H800, is being used by the cloud computing units of Chinese technology firms such as Alibaba Group Holding Ltd, Baidu Inc and Tencent Holdings Ltd, a company spokesperson said.

“For the young startups, many of them who are building large language models now, and many of them jumping onto the generative AI revolution, they can look forward to Alibaba, Tencent and Baidu to have excellent cloud capabilities with Nvidia’s AI,” Nvidia Chief Executive Jensen Huang told reporters on Wednesday morning Asia time.

U.S. regulators last fall imposed rules to slow China’s development in key technology sectors such as semiconductors and artificial intelligence, aiming to hobble the country’s efforts to modernize its military.

The rules around AI chips imposed a test that bans those with both powerful computing capabilities and high chip-to-chip data transfer rates. Transfer speed is important when training artificial intelligence models on huge amounts of data because slower transfer rates mean more training time.

A chip industry source in China told Reuters the H800 mainly reduced the chip-to-chip data transfer rate to about half the rate of the flagship H100.

The Nvidia spokesperson declined to say how the China-focused H800 differs from the H100, except that “our 800 series products are fully compliant with export control regulations.”

(Reporting by Stephen Nellis and Jane Lanhee Lee; Editing by Richard Chang and Christopher Cushing)

HOUSTON (Reuters) – A former Citgo Petroleum Corp executive jailed in Venezuela for nearly five years is seeking $100 million in damages against his former employer alleging it helped set him up to be arrested and failed to defend him from spurious charges.

Tomeu Vadell and family filed the lawsuit on Tuesday in a Texas state court claiming Citgo sent him to Caracas when it knew “there was an extremely high risk” of harm. He was tortured in jail and he and his family were abandoned by the company, the lawsuit claims.

Five of the original seven executives seized in 2017 were freed last October in a deal involving the release of U.S. jailed relatives of Venezuelan President Nicolas Maduro. One Citgo detainee was released earlier and the seventh died in a Venezuelan jail.

“We greatly sympathize with Mr. Vadell for everything he and his family have been through,” a Citgo spokesperson said in a statement. “We disagree with this lawsuit, which irresponsibly equates CITGO, an American company based in Houston, with an authoritarian regime in Venezuela.”

Company officials “supported Mr. Vadell and his family in significant financial and other ways,” the spokesperson said.

Vadell and the other executives were summoned to a meeting at Venezuelan state-oil firm Petroleos de Venezuela , Citgo’s parent. They were held and later charged over a refinancing deal for Citgo that never went through. A Venezuelan court sentenced the executives in 2020 to prison terms ranging from eight to 13 years.

The case is Tomeu Vadell et al V. Citgo Petroleum Corp., Harris County District Court, No. 2023-17486

(Reporting by Gary McWilliams; Editing by Richard Chang)