Different strokes

Is it mere tough talking?While IDBI chairman has announced plans to change managements if companies continue to be mismanaged, take a loo...

Is it mere tough talking?

While IDBI chairman has announced plans to change managements if companies continue to be mismanaged, take a look at an Essar proposal which was planned to be pushed through only a week ago at the Heads of Institutions meeting. Its pelletisation plant, which was once valued at Rs 250 crore in its own books, was proposed to be spun off to Essar Minerals, this time valued at a massive Rs 800 crore, with additional funds being coughed up by institutions. When the proposal was made to FIs last fortnight, they turned it down. But that does not mean that the Ruias have given up. It is probably up for consideration again. Does this constitute mismanagement? It would be interesting to watch how things turn out. If the institutions are serious about financial discipline and effective management, they would insist on forcing some changes before providing fresh funding. It could well be that the tough talking by institutional chiefs is merely a cover to lend more money. Otherwise,Essar at least is due to be written as an NPA and everybody knows how much the FIs would like to avoid that.

Shocked by a tender

An invitation for bids by theKSEB to set up a 60 MW diesel engine power plant at Kasargod created a stir among those in the infrastructure sector. The beleaguered RPG group had won the contract to build this power plant a long time ago, but nothing happened because the group could not tieup to raise funds. The KSEB decided that it was tired of waiting and simply re-invited bids. Nobody was as surprised at the move as the RPG group itself. It has rushed a team of its people down to Kerala to pacify the electricity board and salvage the project. Those into infrastructure building are watching with curiosity to see if KSEB’s attitude is going to be a bold new way of dealing with bidders who cannot deliver, or whether the RPG group will be given one more chance.

Tricky state ratings

Story continues below this ad

Several states who had began to look upon state-guaranteed bonds as an easy way toraise several thousand crores for infrastructure projects have hit upon a road block: Credit rating. It is such a touchy issue with states that only five of the 10 states that chose to be rated by Crisil have accepted the rating. Of these five Maharashtra, Orissa, Gujarat, Karnataka and Andhra Pradesh the first two have already been downgraded. Maharashtra is down from AA minus to A plus and is now on a par with Gujarat. Karnataka and Andhra are a notch lower at A while Orissa which was downgraded last year is BBB minus. The touchiness about rating is sometimes a problem for the rating agencies. In Maharashtra for instance, sources say that the rating agency spent endless amounts of time going back and forth over the rating, worried at the ruling party’s propensity to show its displeasure through rampaging violence. It is probably lucky that economic issues in the state have not drawn much Fire as yet.

Unlikely winner

Until the last day it seemed that Pepsi had once again won the cricket audiencewar having actually managed to stage the controversy ridden Indo-Pak series. Endless publicity courtesy, Bal Thackeray and the Sena goons. Then the BJP government’s even more publicised show of support complete with reception of the teams by the PM and, of course, Sonia Gandhi’s royal appearance with the Delhi CM at the second match. But then the Cricket God decided to play a trick on the sponsors. Suddenly, Anil Kumble astounded everybody with a 10 wickets haul and he happens to be a Coca-Cola man. Did anyone miss the strategically placed Coke bottles as he signed autographs? Next on the cards is clearly a big Coke blitzkrieg to milk the record for all it is worth. Would you say then that Pepsi was bowled out by Coke’s Kumble?

The author’s email address is suchetadalalyahoo.com