INSUBCONTINENT EXCLUSIVE:
Mumbai: Invocation of offshore guarantees given by Indian companies, pressure from overseas lenders, and takeover attempts by deep pocketed
foreigners amid plummeting stock and asset prices are among the concerns creeping in as Covid-19 continues to impact business and
life.
Indian companies offer guarantees to secure contracts and lower borrowing cost of overseas subsidiaries and group companies
Many of them are beginning to fear that liquidity crunch and dip in earnings could make the situation difficult for them
Covid-19 to be covered as a force majeure event so that they can defer their obligation
NetsUnlike the three-month moratorium given by local lenders on interest and loan repayment, no such relief is offered by offshore
banks.
According to Agarwal, even though there are certain concerns among companies, they should not fear hostile acquisitions as there are
enough laws in India relating to securities market and competition that discourage such takeover bids.
The recent open market purchase of
But, a senior fund manager told ET that such concerns are overplayed as China has been buying through various vehicles and exchange traded
newspaper that EU member countries should buy into companies to counter the threat of Chinese takeovers
down well among investors.
The more immediate worries are encashment of offshore guarantees and pressure to fulfil ECB obligations
