That’s (Alu)minimum value!

But optimism seeps in when considered that while cultural synergy has been one of the primary reasons why many mergers have bombed, the Rio Tinto & Alcan Canadian combination seems much more ‘culturally fi t’ than the American Alcoa’s combination with Canadian Alcan, thus giving the merger a much better chance of survival. Also the fact that the target Alcan controls 20% of global aluminium market & that the merger with Rio Tinto is expected to boost the combination’s pro-forma gearing (debt to capital ratio) in the region of 60%, the deal appears refreshing as a Rio Tinto spokeswoman revealed exclusively to B&E, “We intend to retain our ‘A’ rating & will reduce gearing, partly through cash flows, currently running at more than $1 billion a month & rest through divestments of non-core business.”

However, go by Credit Suisse’s 2007 review which states that ‘Aluminum has been the worst-performing base metal in the last five years.’ And London Metal Exchange’s prediction of a dangerous drop in global aluminum consumption from 6.57% during 2005-06 to just 5.34% by 2012, & you’re bound to question Rio Tinto’s ‘expensive’ thoughts & its logic behind overvaluing Alcan, just as we do.

For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

Indian Automobile

Back to some months before this quarter. In what followed as a rapprochement, Rajiv was given the mantle to manage Bajaj Auto’s manufacturing division while younger Sanjiv was given the financial portfolio. Creeping out of nowhere, their younger cousin Kushagra Bajaj (son of Shishir Bajaj & Rahul Bajaj’s nephew) suddenly alleged that his uncle Rahul Bajaj wanted to take control of Bajaj Hindustan, a company which, according to Kushagra, grew manifold under his capacity as Joint MD. Though this was rubbished by Rahul, the eventual media hype ensured miles of bad PR. This fiasco made one thing apparent to the company watchers – the fact that Rahul and his two sons were getting to manage the flagship company had become a source of discomfort among other brothers!

Stunning was the news of the much hyped demerger of Bajaj Auto into three separate companies (announced just two months back), and of the creation of five separate business units within these companies (announced just two weeks back, with one of them going into the four wheeler business), as this all but vindicates the infighting storyline. The three way demerger will create three entities with a $1.2 billion holding company owned 100% by current Bajaj ownership. This entity will hold 30% each in both the $330 million Bajaj Auto (engineering) and the $180 million Bajaj Finserv (finance).

Though the demerger has been branded as a value unlocking exercise for shareholders, it is believed that this is to ensure that technically, only fragmented parts of the company are actually controlled by Rahul’s sons. The funny part is, all these disputes seem to be helping the shareholders! Bajaj Auto’s share price has grown 182% in the past three years (as on July 26, 2007); Bajaj Electricals by 1154%; Bajaj Hindustan by 198%; Bajaj Auto Finance by 347%. So where does this all lead the Wild Hogs party to?

For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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Bullet riddled destiny!

War has been an indispensable aspect of our history. Inspite of the best intentions, the bare fact still remains that it has been successful in spreading its tentacles much deep into our social milieu & afflicting most innocent creatures of this biosphere.

Sadly, the era of using children as foot soldiers would still take long time to be a bygone. For the militias & war mongering mercenaries, it makes sense to recruit children as their demands are minimal, they can be indoctrinated fairly quickly & they never revolt. Who cares for the fact that this inhuman approach not only deprives these innocent lives of their childhood but keeps an indelible & haunting mark in their memoirs making them mentally unfit for a society, long after the physical war is over. Loss of eyesight & limbs have become a norm than an exception. Most cannot even afford to get their children operated & thus many still have bullets wedged inside their bodies.

For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative



Home Campus Tour Contact Us Sitemap IIPM Think Tank IIPM National Brochure IIPM in Media India Today & Tomorrow
Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com