How did we efficiently & effectively value their distressed assets?
A well-known manufacturer & exporter of acid (as well as other chemical goods) was declared a non-performing asset (NPA) due to its inability to repay bank debts. The company applied for insolvency resolution.
During the site visit, we observed the following:
- It was difficult to identify all assets because some of them were significantly degraded owing to the plant’s inactivity
- Some elements of the assets were missing
- All the assets were in idle condition & hence it wasn’t possible to assess their operability
The Burning Problem
As valuers, we were expected to arrive at the best & highest possible value for the lenders. Also, the value had to be attractive to prospective buyers. This was to be done based on very limited information.
We first understood the process flow and the importance and criticality of major equipment and machinery.
Then we prepared a list of all the available plants, machinery & equipment.
Post that, on a best effort basis, the equipment was assessed for its operability and we broadly classified the assets into 3 categories:
Based on this assessment and broad classification, we estimated the best possible realizable value of the assets.
By systematically leveraging our in-house knowledge of the process, understanding of the plant, machinery and equipment, we delivered the best valuation services for the insolvency resolution process/ Using our in house knowledge of process, understanding of the plant, machinery and equipment we delivered the best valuation services for the insolvency resolution process.