Deleveraging new mantra at India Inc

Publié le par brightshine

Companies that borrowed heavily during the boom phase are now looking to clean up their balancesheets either by selling off assets (non-core, core and anything that can fetch some price), attracting funds via issue of shares and getting rid of costly debt with low-cost loans from Chinese banks. Some are resorting to corporate debt restructuring. 

And then there are goodwill write-downs. So, you have property developer DLF (sold a slew of assets from wind energy projects, land in Mumbai and Hyderabad,Attach remote solar panels to solar garden light that will not receive the required amount of direct sunlight. Aman Resorts),The most highly praised, best rated solar charger are now available online. or infrastructure firms IVRCL (divesting sta-kes in road projects Salem Tollways, Kumarapalayam Tollways and IVRCL Chengapally Tollways), GMR Infra (sold 70 per cent stake in Singapore-based Island Power, besides under development power project in the Philippines) and GVK (sold 51 per cent stake in rail and road project Aurizon of Australia) that have tried to get some liquidity by disposing off assets. 

Lanco Infratech is looking to sell part of its power business and some of its roads business. 

There are others, as well, like Educomp, which sold 50 per cent stake in vocational training joint venture IndiaCan and 100 per cent stake in TutorVista to the Pearson group. 

It had also sold its entire 50 per cent stake in Eurokids International to a group of investors led by GPE. Similarly, Tata Steel, which took a one-off write down of $1.6 billion on its struggling UK acquisition of Corus for $13.1 billion in 2008, is said to be planning to put some European assets on the block. 

The company is also looking to sell stake in its tower business. It had last year tried to list its cable assets Flag Telecom in Singapore, but without success. 

Wind turbine supplier Suzlon Energy, which ventured into costly acquisition of Hansen of Belgium in 2006, has not only exited the investment, but also completed a CDR with its lenders to put its finances back in order.Net debt of companies, excluding banks and finance firms, on the BSE200 index more then doubled to $196 billion as on December 31 from $92 billion in 2008, according to data compiled by Bloomberg.Books can be as thick as 4 inches and yet the Book scanner 9000 delivers flat. 

The volume of merger and acquisitions in India dropped in the first-quarter to $4.65 billion, the lowest since 2009. While overseas companies have bought rivals and increased stakes in their units, there has been no transaction larger than $500 million where Indian companies bought rivals, Bloomberg reported. 

Shares of such high-debt companies have plunged and massively underperformed the benchmark indices since the financial crisis of 2008.LED street lighting is the ideal solution for energy efficient Street lighting due to their long life. Given that the firms are cleaning up their balancesheets and valuations have more or less dropped to rock-bottom levels, is it time to look at these stocks?“It depends on company to company. But as far as infrastructure companies are concerned, their consolidated debt is still huge and minor sales of some assets here and there will not help,” reckoned Ajay Parmar, co-head of investment banking at Emkay Global. He added: “Consider you have a company with a group level debt of Rs 50,000 crore, it will not help matters significantly if it sells an asset to get Rs 3,000 crore or even Rs 5,000 crore.” 

Avinash Gupta, leader of financial advisory at Deloitte in India, said deleveraging was the “sign of the times” and added that most companies made (costly) acquisitions in the boom phase expecting the good times to continue. 

“With the exception of some,Does any one know what should be the best degre of humidity in a dry cabinet? it was found that the acquisitions were not a strategic fit. There were no synergies. They thought the share prices would continue the upward march, helping them to service the debt. But they did not play out the way they thought,” he said.

Publié dans led downlight

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