Companies that borrowed heavily during the boom are now seeking to clean their balancesheets or by the sale of assets (non-core, core and everything that can fetch a few price), to attract funds through the issuance of shares and get rid of costly debt with loans at low cost from Chinese banks. Some rely on corporate debt restructuring.
And then there are impairment losses of goodwill. So you have the real estate developer DLF (sold a slew of assets of the projects wind energy, land in Mumbai and Hyderabad, Aman Resorts) or infrastructure firms IVRCL (divest sta - kes in road projects Tollways Salem, Kumarapalayam Tollways, and IVRCL Chengapally Tollways), GMR Infra (sold 70 percent participation in the power of the island based in Singapore, also under the draft power development in the Philippines) and GVK (sold the stake of 51 percent in the railway project and) Road the Australia Aurizon) who tried to get cash by removing assets.
Lanco Infratech looking to sell part of its power and some of its roads.
There are others, as well as Educomp, who sold the participation of 50 per cent in training professional joint-venture IndiaCan and participation of 100 per cent in TutorVista in the Pearson group.
She had also sold its 50 per cent while Eurokids International to a group of investors led by MCP. Similarly, Tata Steel, which won a unique writing of 1.6 billion $ on the acquisition of UK struggling Corus to 13.1 billion $ in 2008, is expected to have the intention of some European assets on the block.
The company also seeks to divest activities in the tower. He had tried the year last to the list of its assets of cable telecom flag to Singapore, but without success.
Wind of the turbine supplier Suzlon Energy, which has ventured into the expensive acquisition of Hansen of Belgium in 2006, has not only left the investment, but also completed a CDR with its lenders to reset its finances in order.Net debt of the companies, excluding banks and finance companies, on more then double BSE200 index, to 196 billion $ December 31 of 92 billion $ in 2008According to data compiled by Bloomberg.
The volume of mergers and acquisitions in India has fallen in the first quarter to 4.65 billion $, the lowest since 2009. While foreign companies have purchased rivals and increased issues in their units, it has no more than 500 million transactions $, where Indian companies bought rival, Bloomberg reported.
Shares of these heavily indebted companies have plunged and massively underperformed the indices reference since the financial crisis of 2008. Given that companies clean up their balancesheets and evaluations are more or less fallen to extremely low levels, is it time to look at these stocks?"It depends on the company to the 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, "counted Ajay Parmar, co-head of investment banking at Global race. He added: "' considers that you have a company with a debt level of group Rs 50 trillion rupees, it help matters significantly if it sells an asset for Rs 3,000 crore or even Rs 5 trillion rupiah. '"
Avinash Gupta, leader of the financial services at Deloitte in India, said debt reduction was the "sign of the times" and added that most of the companies made (expensive) acquisitions in the boom phase expects the good times to continue.
"With the exception of some, it was found that the acquisitions were not a strategic fit. There are no synergies. They believed that the price of the shares would continue walking upwards, helping them to debt service. "" But they did not play the way they thought, he said.
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