| |
| Revival & Restructuring of Sick Companies |
| |
 |
| |
| Why Revival of Sick Companies is important? |
| It is necessary to make all attempts to revive the company rather than close it. Revival should be undertaken as winding up of a company would result in: |
- Closing down of unit which provided some goods or services
- It would throw out of employment numerous persons resulting in grave hardship
- Loss of revenue to the state
- Scarcity of goods and diminishing employment opportunities
|
| Major causes of sickness of industrial companies |
- Inability of management to
- keep a constant vigil over competitive forces
- focus on continued viability of the industrial unit
- introduce dynamic changes to suit the development taking place in the industry
- Mismanagement by directors
- Diversion and misapplication of funds
- Reckless investments in other businesses
- Disproportionate investments
- Lack of serious efforts to combat sickness at the initial stage and to take efforts to revive it
- Lack of funds required for meeting replenishment and much needed modernization and up gradation program
- Lack of adequate and quality manpower
- Technological obsolescence
- Political and economic factors
- Change in consumer behaviour
- Lack of timely government support
|
| Reasons for Industrial Sickness |
- Internal Causes
- Project related - under estimation of project cost, non availability of critical information having a vital bearing on the project, delayed project implementation and resultant cost escalation
- Human resource related - poor quality management, excessive commitment to non appropriate policies, poor financial/marketing/management control, management succession problems, poor inter-personal and inter-departmental coordination
- Performance related - faulty choice of product/technology, under utilization of available resources, inadequacy of working capital, diversion of funds, inadequate market forecast
- External Causes
- Non cooperative government policies
- Recession/adverse economic conditions
- Powerful competitors in market
- Non availability and shortage of inputs
- Regional and industry-wise phenomena
- Technological advancement
- Delayed financial assistance
|
|
Our Services under Revival & Restructuring of an entity |
- Analysis the organizational and financial structure of the company in order to find out the real cause of sickness of an entity.
- Finding and analyzing various options for the revival of entity
- Drafting of Revival & Restructuring Scheme
- Liaison with Banks/BIFR/DRT & other concerned authorities for the revival of the company
- Dealing with ARC (Assets Reconstruction Companies)
- Post Revival Advisory
|
| |