Case Studies


Case Outline

  • One of the oldest cement companies in Gujarat in operation for more than 4 decades
  • Continuous losses because of overcapacity in the state, leading to poor demand, lower realization and competitive disadvantages vis-à-vis new players
  • Because of consistent losses for a period of 4 years and consequent uncovered interest, debt ballooned by ~ 75 % to ~ INR 3.5Bn
  • Capabilities to service < 50% of the outstanding principal on sustainable basis


  • Negative EBITDA with substantial unserviceable debt
  • Promoters’ were unable to provide funds for its ongoing expansion project and lenders were unable to pump funds into a non performing account
  • Threat of punitive measures by the state government for huge statutory overdues
  • Consistent decline in financial performance led to erosion of net worth

Normal Solution

  • Debt reduction to sustainable level by way of :
    • One-Time Settlement, requiring banks to write down debt by 50% or more;
    • Strategic sale of the company to larger competitor
    • Because of losses and poor demand, company would have fetched poor valuation

Brescon Value Add

  • Facilitated investment of ~ INR 1Bn by a leading special situation investor for settlement of debt, government dues and completion of stalled captive power plant project
  • Led the restructuring process and prioritized cash flows to pay government dues without any further delay


  • Improvement in profitability (EBITDA of ~ INR 1Bn vs EBITDA loss of INR 0.20Bn within 5 years, post restructuring)
  • Completion of the expansion project and the captive power plant
  • Increase in market capitalization by over 3.5x within a period of two years

Capital infusion plus Asset Liability correction helped all the stake holders reap rich benefits