This is due to significant investment getting stranded and we believe that a turnaround is possible to create value for all stakeholders, says R Venkataraman, Senior Director - Performance Improvement & Turnaround Management, Alvarez and Marsal.
What kind of business opportunities do you see in the Indian power sector?
A&M has established a world class professional services practice in India including turnaround and performance improvement services to private equity firms and their portfolio companies and to lenders on their stressed asset portfolio.
A&M has worked on multiple projects covering various sectors and businesses. A large number of infrastructure projects in India of which a large part belongs to the power generation space are stranded or stalled for various reasons. We see opportunities of working with lenders, investors and corporates in helping them turnaround these assets by leveraging A&M´s experience.
What are your strategies for India?
A&M has also built a strong Transactions Advisory Group in India with focus on key sectors including consumer, retail, transportation and logistics, healthcare, business services, automotive, industrials, infrastructure and allied services. Our global forensic and disputes group brings deep expertise in fraud prevention, fraud detection, market intelligence, compliance and dispute resolution services. Going forward, the focus for next year is to diversify turnaround and performance improvement services to the infrastructure sector, especially power generation and roads. We are in constant discussion with banks and private equity investors to explore opportunities in this space.
Are you also eyeing the State Electricity Boards, which are financially weak?
Our current focus in the power sector is in the private sector generation space where we see significant investment getting stranded and we believe that a turnaround is possible to create value for all stakeholders and support national growth agenda. However, in the future, we would be looking at state owned businesses as well.
How has A&M helped companies tackle complex performance improvement challenges?
Success of any performance improvement effort depends on understanding the key drivers of the business which needs to be addressed. Majority of senior resources in A&M´s performance improvement group have significant operating experience and have held leadership positions in various businesses. This is a key differentiator for A&M and helps bring in a very hands-on approach to the work we undertake.
Are you eyeing companies undergoing the corporate debt restructuring programme?
Yes, we have already done work for some and have also been approached for support in a few other cases.
Do you feel that the current Indian scenario necessitates turnaround specialists across domains?
Yes. While there are regulatory and policy challenges, some of the major reasons for assets getting stranded or stalled in the infra¡struc¡ture sector are lack of plan¡n¡ing and project manage¡ment capa¡bility, inadequate cash flow management and poor control and governance. A&M has proven capabilities in managing these and are well placed to handle the situation.
After an infra player avails your service, what is your timeframe for turnaround in that particular corporate?
It is difficult to estimate time frame as it is on case-to-case basis, ranging from 3-12 months. However A&M´s objective will be to remain engaged only as long as the situa¡tion warrants and issues are fixed.
Can we have an understanding about the growth of this particular segment in India?
The Indian banking sector has been facing a large degree of stress over the last few years.
It is our objective to assist lenders with these stressed assets. We expect that there will be growth in this segment as more lenders become more activist in addressing these assets earlier.
- Rahul Kamat