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July 28, 2009

Halcyon Group launches forum to assist cos. facing difficult times

Investment management firm Halcyon Resources & Management has catalysed the launch of the Halcyon Forum comprising of eminent individuals from banking, manufacturing, capital markets and services sectors, to provide advice to businesses on dealing with the economic downturn.

Members of the Halcyon Forum include M. G. Bhide (former CMD of Bank of India and MD of SBI), Raghunathan Sankaran (Founder and Chairman of IndGlobal Finance), Nabankur Gupta (Chairman of Blue Ocean Capital and board member of Raymond), Urjit R. Patel (an Economist currently with Reliance Industries and formerly a Consultant to the Ministry of Finance) and Narayan K. Seshadri (Chairman & CEO of Halcyon Group).

How the Forum works

Companies that apply to the Forum would provide information on their businesses to enable appropriate diagnostics. The results of the diagnostic along with broad options will be presented to the Promoters/Management who will be invited for interaction with the Forum. If necessary, the Forum will also make recommendations to the lender banks, investors, creditors and other stake holders in respect of their continued participation to enable the business to tide over its difficulties. The Forum will take up only businesses with annual revenues in excess of Rs. 50 crores.

Extracts from a note from Halcyon on the need for such a forum:

The economic slowdown has affected all facets of businesses. Revenues and resultant profits have declined, expenses remain static or have increased, due to interest costs and other factors, liabilities have ballooned whereas asset values have gone down. Also, in many cases new investments have been postponed.

Most business managers have had no experience in dealing with such a confluence of severe adverse changes. We increasingly encounter situations where managers and promoters see it as a temporary financing problem. Consequently only the symptoms are addressed, rather than the root cause. Additionally, due to managers’ inexperience in anticipating, identifying, and dealing with problems, many such businesses are at a high risk of erosion. Needless to say the resulting impact on the Banks’ NPA portfolios and the wider economy could be significant.

For more information about the Forum, email diya@halcyongrp.com