CAPABILITY STATEMENT

Transcription

1 CAPABILITY STATEMENT CORPORATE RESTRUCTURING ICRA Management Consulting Services Limited 1

2 IMaCS - an introduction ICRA Management Consulting Services Limited (IMaCS) is a multi-line management/development consulting firm headquartered in India. We have an established track record of 14 years in consulting and a diversified client base across various sectors and countries. IMaCS has completed over 700 consulting assignments and has worked in over 25 countries across the globe. ICRA Management Consulting GROUP ICRA Services Limited (IMaCS) is a fullyowned subsidiary of ICRA Limited (ICRA), one of India s leading credit rating agencies. IMaCS operated as a Credit Rating Management Consulting IT (Software) BPO division of ICRA till March 2005, when it was de-merged from ICRA and became a standalone company. Our clientele includes multilateral and ICRA Limited ICRA Management Consulting Services Limited ICRA Techno Analytics Ltd. ICRA Online Ltd. bilateral agencies, banks & financial institutions, manufacturing and service organisations, Governments, ICRA Techno Analytics Inc. Government-owned organisations, investors, and regulators. About Group ICRA Launched in 1991 in India, ICRA has been set up by a number of prominent Indian financial institutions, banks, and insurance companies. In September 2001, Moody s Investment Company India (Private) Limited, a 100% subsidiary of Moody s Investors Service, USA, became the single largest shareholder in ICRA. Group ICRA comprises three businesses: Credit Rating, Management Consulting and IT/BPO services, offered by four different companies comprising ICRA and its three subsidiaries, namely, IMaCS, ICRA Techno Analytics Ltd. (ICTEAS) and ICRA Online Limited. ICRA is listed on the National Stock Exchange and the Bombay Stock Exchange in Mumbai, India. 1

3 Our clientele includes banks, financial institutions, non-banking financial companies, manufacturing and services organizations, governments, government-owned organizations, debt and equity investors, regulators, and multilateral agencies. We have executed assignments for multilateral agencies such as The World Bank, World Bank Institute (WBI), Commonwealth Development Corporation (CDC), United Nations Development Programme (UNDP), United States Agency for International Development (USAID), Department for International Development (DfID), African Development Bank (AfDB), Asian Development Bank (ADB) and International Finance Corporation (IFC). Our Business Groups and Practice Areas The different business groups and practice areas within IMaCS form our matrix of service offerings. Multidisciplinary teams are used on most assignments. The diversity of experience in IMaCS teams helps it to adopt a creative and cross-functional approach to problem solving, which has not only been very successful in practice, but has also been well appreciated by all our clients. Practice Areas IMaCS - We focus on six practice areas Strategy Enhancing Competitiveness/Market Assessment/Improving Effectiveness Risk Credit Risk/Market Risk/Operational Risk/EWRM/Risk Analytics/Software Process Consulting Cost Reduction/Process Re-engineering/Organisation Design Transaction Advisory M&A/Due Diligence/Project Advisory/Bid Advisory/Financial Restructuring Policy & Regulation Regulatory Economics/PPP Models/Governance Development Consulting Investment Climate/Institutional Strengthening/Capacity Building /Poverty Alleviation/Sustainable Development Business groups Energy Banking & Insurance Infrastructure Corporate Government/ Multilaterals Most consultants at IMaCS have advanced academic degree in various disciplines and many have gained experience in reputed firms prior to coming to IMaCS. Both freshers and experienced consultants undergo formal and informal training in IMaCS to deliver high quality and implementable solutions to clients. IMaCS clients also have the benefit of the considerable organisational expertise that IMaCS has built up over the past ten years. 2

4 IMaCS Consulting Services in the Corporate Advisory Group Our Corporate Advisory practice focuses on enhancing client competitiveness in all areas of operation. We focus on how to improve a firm's competitiveness across its value chain for different industry sectors such as manufacturing, and services, as well as capacity building initiatives for the government and government-owned organisations. Our service offerings are grouped across the following broad functions of Strategy & Operations and Corporate Finance. Strategy & Operations Business strategy formulation Competitiveness studies Market / demand analysis Entry strategies and product positioning Business process design and improvement Ogranisation design and restructuring Enterprise-wide Risk Management Corporate Finance Financial restructuring Enhancing shareholder value Assessing investment risks Evaluating acquisition or divestiture plans Undertaking valuation, due diligence and structuring of deals Conducting partner search and evaluation of joint venture partners Our clients include large and medium-size corporates, family-run businesses, SME, Central and State Government as well as Government undertakings and national as well as state-level industry associations. We have executed assignments across different functional areas across multiple sectors for our wide repertoire of clients. While our work has spanned multiple sectors of the economy, we have built up expertise and are more active in certain sectors such as metals, engineering, automotive, commodities, consumer goods, ICE, healthcare, tourism and hospitality. An indicative list of our offerings in the select sectors is appended below: 1 Automotive, Engineering & Construction 2 Commodities (metal, paper, cement, petrochemicals, plastics and polymers) Market studies, Competitiveness assessment (at country, industry and corporate level), Assistance in identifying opportunities in the context of emerging liberalised trade environment, Location selection studies, Business plan preparation, Policy and environment related assessment, Process improvement and cost reduction, Valuation, Mergers & Acquisitions, Tariff formulation. 3

5 3 Tourism, Hospitality & Healthcare Demand assessment for new offerings, Market entry and positioning strategies, Feasibility studies, Operations and performance assessment (including service quality audit), Infrastructure assessment, Preparation of Master Plan, Preparation of tourism policies and incentives, Bid process management, Valuation, Mergers & Acquisitions. 4 Consumer goods Market feasibility of introduction of new products and entry into new markets, Business plan preparation, Distribution network strategies (including Counter Party Risk Assessment), Valuation, Mergers & Acquisitions. 5 ICE Business plan preparation, Process improvement, Improving efficiency of outsourced activities, Valuation, Mergers & Acquisitions. IMaCS experience in disinvestment cases IMaCS has worked extensively with the Disinvestment Commission of Government of India, in assisting the commission in deciding on the companies to be divested and the strategy to be followed for disinvestment. Our work spanned a number of sectors which included aluminium, steel, telecom, petroleum, chemicals and fertilisers, construction, textile and financial services. The list companies with which we have worked. No. Name of PSU 1. Bharat Electronics Limited 2. Bongaigaon Refineries Limited 3. Bharat Aluminium Company Limited 4. Container Corporation of India Limited 5. Hindustan Steel Works Construction Limited 6. Hindustan Teleprinters Limited 7. Hindustan Vegetable Oil Corporation Limited 8. Hotel Corporation of India Limited 9. National Fertilisers Limited 10. Oil India Limited 11. Pawan Hans Limited 12. Pyrites, Phosphates & Chemicals Limited 13. Rail India Technical and Economic Services Limited 14. Rashtriya Chemicals and Fertilisers Limited 15. Rehabilitation Industries Corporation Limited 16. Sponge Iron India Limited 4

6 17. State Trading Corporation of India Limited 18. National Project Construction Company Limited 19. Bharat Sanchar Nigam Limited 20. National Semi-conductor Complex Limited 21. Telecom Consultants India Limited 22. Cotton Corporation of India Limited 23. Jute Corporation of India Limited 24. National Small Industries Corporation Limited 25. Central Cottage Industries Corporation Limited 26. Handloom and Handicrafts Corporation Limited 27. National Film Development Corporation Limited 28. National Handloom Development Corporation Limited 29. Andrew Yule Limited 30. Numaligarh Refinery Limited 31. North Eastern Handicrafts Development Corporation Limited 32. HUDCO Limited IMaCS experience and expertise in Corporate Restructuring IMaCS has worked with multiple clients across several sectors on restructuring initiatives of corporates across multiple sectors, and has thus gathered a wide range of experience and functional expertise. Some of the assignments that have been executed / being executed by IMaCS in this area are as follows: Title of the Project Name of the Client 1. Preparation of a rehabilitation plan for a large A large pharma PSU pharmaceutical company 2. Due diligence and valuation and recommendations on restructuring for a large steel company A large PSU in the steel sector which had proposed to merge with another PSU 3. Due diligence and valuation of a state PSU and A state PSU in the steel sector recommending restructuring options 4. Restructuring of a multi-divisional organisation A leading MNC 5. Capital restructuring for a fertiliser company A leading fertiliser company 6. Business restructuring of a multi-product food A leading business group in Eastern processing firm India 7. Valuation and restructuring of public sector Disinvestment Commission undertakings 8. Business and financial restructuring for a Retail Savings A large non-banking financial 5

7 Organisation institution 9. Enhancing manpower productivity and improving HR systems A leading PSU player in the Indian telecom industry 10. Restructuring of a multi-disciplinary hospital A leading hospital in Eastern India 11. Capital restructuring of a dairy company A state industrial development corporation 12. Financial restructuring of a tinplate manufacturing One of the largest tinplate company manufacturing companies 13. Restructuring of a state-owned enterprise in the food processing sector State Government of a leading industrial state 14. Evaluation of strategic options for corporate A large engineering conglomerate restructuring A short description of some consulting assignments undertaken by IMaCS in the domain of corporate restructuring and related areas is appended in the following pages. Select vignettes of Corporate Restructuring 1. Preparation of a rehabilitation plan for a Pharma PSU (IDPL) 2. Due diligence and valuation and recommendations on restructuring for a steel company (BHPV) 3. Due diligence and valuation of a state PSU and recommending restructuring options (RITES) 4. Restructuring of a multi-divisional organisation The client, an Indian subsidiary of a multinational corporation, with interests in consumer and industrial electronics / electrical products desired an independent assessment of the prospects of its various business groups. on the financial performance was assessed which involved an analysis of profitability, liquidity, capital structure and cash flow. IMaCS identified the key drivers of the operations of the principal business groups of the Indian operations, developed financial models for projecting their performance, and identified the key parameters needed to track performance. IMaCS formulated its key findings on the Indian subsidiaries' future performance, based on interpretation of the integrated financial statements of different business groups, under different input conditions arising from strategic decisions and / or environmental changes. 5. Capital restructuring of a large fertiliser company The client, one of the largest urea manufacturers in India, was posting a low return on equity. GoI, the principal shareholder, was contemplating divestment of its stake in the company, as part of its overall disinvestment programme. However, it felt that the present returns were insufficient to attract the 6

8 investor interest. The management of the company therefore decided to examine whether restructuring its capital could boost return on equity. The management also wanted to study the impact of any capital restructuring on the value of the Government's shareholding. IMaCS analysed the various options for restructuring the capital under the present policy regime, including conversion of equity, issue of preference shares, and provided the impact of implementing the various options on shareholder value. 6. Business restructuring of a multi-product food processing firm The client, a leading business group in Eastern India, was facing intensive competitive pressure in all its product markets of bottled water, milk, ice cream, non-carbonated drinks, etc and was also facing financial constraints on account of its non-earning investments in its subsidiary company. The mandate was to assess the business risks facing the firm, suggest appropriate risk mitigation strategies, draw up the future business portfolio and do a valuation of the company. 7. Valuation and restructuring of public sector undertakings Disinvestment Commission appointed IMaCS as an advisor to conduct valuation studies of 31 PSU, in diverse sectors including oil and gas, fertiliser, transportation, food processing, aluminium, electronics and hotels. IMaCS was required to estimate the value of Government's shareholding in these PSU, and also recommend a divestment strategy under different business scenarios. For each PSU, IMaCS recommended the modalities of disinvestment and appropriate restructuring strategies, including the phasing of disinvestment, the extent of dilution of government's shareholding, and a range of values for the government's equity using different approaches to valuation. 8. Business and financial restructuring for a Retail Savings Organisation The client, a large retail savings company in the private sector, had a deeply eroded net worth, arising from poor asset management and excessive operating expenses. The supervising regulatory authority had stipulated a fixed time frame within which the client had to rebuild its operations to a state of viability, and report a positive net worth. IMaCS was given the mandate to draw up a strategic revival plan for the company, and set specific targets for various operational areas. IMaCS identified several areas of internal improvement, which included tightening the asset management function, overhauling the channel management (for raising funds), a rationalisation plan for human resources, redesigning the organisation structure, improving information systems, and tightening internal controls. In addition, the client was advised to enter into a dialogue with the regulator for restructuring its liabilities that could ease the repayment burden and potential cash flow problems. 9. Enhancing manpower productivity and improving HR systems The client, a leading PSU player in the telecom industry, The client was desirous of attaining productivity standards that were comparable with international telecom industry bench-marks and concurrently making necessary organisational improvements to facilitate its implementation. 7

9 10. Restructuring of a multi-disciplinary hospital IMaCS association with a leading multi-disciplinary private sector hospital in Eastern India to formulate a turn-around strategy involved our analysis into the business, operational, financial and organizational aspects of the hospital. An analysis was done on operational parameters like the average length of stay of a patient, average billing per patient day from the different disciplines, occupancy rates and equipment profile. This was followed by an evaluation of its catchment area, patient profile, pricing strategies and share of doctors income. The operational and marketing analysis was complemented with a financial analysis of current and future revenue streams as well as cost heads, which culminated in the construction of future income projections. Quality of personnel and the employee strength was benchmarked with comparable hospitals and an appropriate organisation design and HR practices were recommended 11. Capital restructuring of a dairy company The client, an SIDC, had jointly promoted a dairy company in eastern India with an entrepreneur and had financed the project both in terms of equity and debt. The envisaged project had some technical weaknesses and also needed strong marketing set-up. In order to overcome these weaknesses, an agreement was entered into with an existing player, strong in distribution of dairy products along with certain changes in the plant design. The additional fund inflow required from the promoter and marketing partner had a bearing on the capital structure of the project, viability of the project and interests of the shareholders. In this context, the SIDC wanted IMaCS opinion on the possible options for capital structuring and its implications on the viability of the project and interests of the shareholders. 12. Financial restructuring of a tinplate manufacturing company The client, belonging to one of the leading steel producers in India, was one of the largest tinplate manufacturers in India. Despite being the largest producer and belonging to a strong group, the company was suffering from serious financial problems due to cost overrun of expansion-cum-modernisation project and operational inefficiencies. The company wanted IMaCS to explore various options to make the company profitable, suggest a suitable option satisfying interests of shareholders and lenders, and build an appropriate case for getting necessary approvals from the stakeholders. 13. Restructuring of a state-owned enterprise in the food processing sector The company is involved in the manufacture and sale of processed frozen fruits & vegetables and meat. IMaCS mandate was to conduct a diagnostic analysis of the company to analyse the operations of the company vis-à-vis industry and identify the strengths and weaknesses. In order to enhance value prior to disinvestment, IMaCS suggested suitable restructuring measures to leverage the opportunities available and mitigate threats. Subsequently, IMaCS advised the State Disinvestment Commission on the disinvestment strategy including valuation of the company, and assist them in the process of disinvestment. 8

10 14. Evaluation of strategic options for corporate restructuring The client, a large engineering conglomerate, with business interests in sectors such as Engineering and Construction (E&C) and cement, contemplated de-merger of the cement division with the aim of enhancing shareholder value. It received proposals from financial investor as well as an existing shareholder of the company. IMaCS was mandated to evaluate the two proposals from the point of view of selecting the proposal that would maximise shareholder value. IMaCS analysed the E&C business, the cement business and other areas of operation of the company with a view to evaluate current and likely demand-supply conditions, assess regulations and other drivers impacting the businesses and highlight key competitive attributes and critical success factors. This was followed by an enterprise level analysis to evaluate the key drivers of profitability and understand the company s positioning vis-à-vis its key competitors. This was followed by an evaluation of the two proposals, principally with respect to the impact of the two proposals on the structure of and prospects for the company and implications of each proposal on the shareholder value of the client company and / or its successor entities due to changes in the competitive abilities of the E&C and cement businesses under the two options. 9

11 ICRA Management Consulting Services Limited I M a C S Corporate Office: Building No. 8, 2nd Floor, Tower-A DLF Cyber City, Phase-II Gurgaon T: +(91 124) F: +(91 124) Registered Office: 1105, Kailash Building, 11th Floor 26 Kasturba Gandhi Marg New Delhi Phone: +(91 11) Fax: +(91 11) Contact: Mr. V. Sriram General Manager & Head Corporate Advisory IMaCS 5 th Floor, Karumuttu Centre 634 Anna Salai, Nandanam Chennai Tel: / Fax: sriram.v@imacs.in Mr. B V Rajesh Head & Assistant General Manager Retail IMaCS Vayudooth Chambers, 2nd Floor, Trinity Circle 15 16, MG Road Bangalore Tel: / 4049 Fax: rajesh.bv@imacs.in Arati Sood (Gurgaon) Manager Phone: +(91 124) Fax: +(91 124) arati.sood@imacs.in 10 Shaleen Agarwal IMaCS 4th Floor, Electric Mansion Appasaheb Marathe Marg Prabhadevi Mumbai Tel : Fax: shaleen.agarwal@imacs.in