Sunday, December 2, 2012

Save ‘their’ souls?

Ratan Tata seeks a special contingency fund to be created by banks to rescue Indian companies who have taken dollar and euro loans. A script not so hard to decipher!

Unlike what B&E’s successive critical analyses of various big ticket acquisitions of the Tata Group would suggest, we actually admire Mr. Ratan Tata. Yes indeed Sir! Your quest for global conquests has been the stuff of legends. We are truly enamoured by the visionary aggression with which you have led the Tata group.

So our mental state was understandable when we read a few days back that he is seeking special funds in banks. Our first impression was that Tata is perhaps planning to now buy out a bank or two! But then we found out that it was a proposal for ‘select’ Indian banks to create a special contingency fund to rescue ‘credit-worthy’ Indian companies from despair, if the dollar & euro loans they’ve taken are recalled or have to be repaid in a hurry. That’s because the global crisis might compel many foreign banks & institutions to refuse to extend or roll over loans after December 2008. Hmm... surely no company could be more credit worthy than the Tata Group, right?

Two years ago, B&E had the temerity to suggest that the double whammy of a falling rupee and falling demand and profitability for steel could make the Corus acquisition unmanageable and saddle Tata Steel with unprecedented debt.


Source : IIPM Editorial, 2012.An Initiative of IIPM, Malay Chaudhuri

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