Friends
When an account is high rated and
well performing, there are many options and opportunities to the unit and the
promoters. The money flows in and there is always a que of investors. New
Bankers source various ways and means to take exposure in the account and
existing bankers not only try to resist the entry of new lenders but also use
every ways and means to increase the exposure.
Even the existing consultants use every trick to oust the new
consultants and create a mystery curtain around the promoter to safeguard their existence. The money is sourced easily and that is one
of the key factor for turning account into stress at a later stage. Promoters
start adventuring beyond their capacity and without much analysis. A single
wrong business decision spoils the party. This golden situation gradually fades
away and the account enters into stress zone. Soon it turns into NPA and then
new journey starts.
The consultants and advisors who
served such clients in good time are generally not very supportive at this
stage. I wish to share my views on the Role of Finance Consultants in case of
stressed accounts. The expertise and
experience of handling stressed accounts is not very common. Very few Finance
consultants enter into such advisory services. The consultant has to associate
with such accounts for quite long time as it takes 12-24 months time to resolve
such accounts. There are legal, financial and technical issues which hound the
units badly. Hence strategy to handle situation is key of the game. Most of the
events go unnoticed and the performance of the consultants can not be
visualized due to long drawn process. Other side the fee realization is also
quite challenging due to stress in the unit. Thus it needs lot of patience to
handle such accounts. Unlike the consultancy in sourcing of finance , this
advisory of handling stress cases does not bring substantial funding. Only
achievement is handling the lenders, working out of strategy to survive and move forward .
The general perception is that
consultant is needed to raise finance whereas the fact is that the advisory
services are of utmost importance during the crises or stress for that matter.
Any step without proper advice may be disastrous for the unit. It is just like
we need better doctor or even surgeon when the disease is more crucial. I fail
to understand why the promoters of stress units do not think in this direction.
To worse the matter, it is noticed that the management of such units become
more knowledgeable in the matters of handling
legal and financials.
CP
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