Business enterprises often find themselves in Special Situations due to, amongst many reasons, unforeseen fluctuations in business / economic cycles, underutilized capacities, excessive leverage, poor working capital management, rapid growth not supported by strong systems and processes; thus resulting in lower than possible profitability or poor financial health. While large enterprises may be able to access capital and expertise to turnaround, small and medium sized sized enterprises often find it difficult to get such access.

The Special Situations Investment business (SSIB) would partner with such enterprises, mostly small and medium sized, by investing in the capital of such enterprises and supporting their management in effecting turnaround, thereby creating value for the shareholders. Besides the diverse skills that SSIB would bring in turnaround management, it will also leverage the strengths of the Tata Group by way of accessing customers, vendors, people, expertise or other resources, in creating value for such enterprises. 

The investment strategy of SSIB will be focused on creating value through improving operational efficiencies, consolidation, leveraging of Tata Group synergies, and planning exits to realize the value created.

There are several such enterprises, which would provide an alternative investment opportunity to investors. In order to allow a larger investor participation in such opportunities, it is intended to set-up one or more “Special Situations Funds” to be managed by SSIB, the first of which is planned to be launched in 2008-09.

The SSIB would also invest in distressed debt restructuring through an Asset Reconstruction Company. Towards this end, SSIB has acquired a strategic stake in the equity capital of International Asset Reconstruction Company Private Limited, through which it will invest in distressed debt as well as support the reconstruction efforts of the ARC.

For further enquiries, write to us at ssib@tatacapital.com