Thursday, December 20, 2007

IFCI Snafu

It's all badly fucked up at IFCI.
If I were the FM, I would say this to IFCI management -- "Get that sand out of your cracks, guys. This stuff is hard work, now don't botch this up".... You should see the muck that gets raked over by our guys at IFCI that screwed up the Sterlite-Morgan deal. Let me put it this way. Some of its Board members aren't going to see such cushy jobs ever again. Too many perks for running a company aground. Then the government steps in with some concessions. As if by godsend, the real estate market too turned hot and suddenly the textile mills and other companies owning large swathes of land or belonging to sectors in the limelight (a la steel and cement) in IFCI's long NPA list became highly valued - by default. Now the jokers in IFCI board want to claim credit for turning it around when in fact, all they did was to try and turn it upside down – something that they almost accomplished. Someone in IFCI told me these guys pop a Viagra a day even to get up and walk straight....

Now they also want private investors to buy 26% but can’t let go off management control. If you add in the additional 20% public offer the investor will have to make, the new investor will end up holding 46% stake in the company for just 25% of management control (just two out of eight board seats) and no rights to appoint CEO. Now who will agree to that?

IFCI stock had lost 23% in the markets on Thursday. What if it were a Private sector management that announced the deal, named the bidder the day before and screws it up the next morning…? SEBI will be all over them for misleading investors for talking up and spooking the market intentionally.

Next time IFCI has a suitor, I suggest go put shock collars around its management. If they try to act up, they get through the invisible fence -- boom. Unconscious. They wake up in some casualty ward, never to be back at their desks again.

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