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Setting finances in order

Setting finances in order
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First Published: Wed, May 20 2009. 11 31 PM IST
Updated: Wed, May 20 2009. 11 31 PM IST
Indian companies that have messed up their finances in the quest for growth during the boom years now have a wonderful opportunity to at least partly set their financial houses in order.
There has been a distinct easing of financial conditions around the world over the past few weeks, as is evident from the steep decline in pivotal parameters such as the London interbank offered rate (on which several commercial borrowing rates are based) and the TED spread (which is a measure of how investors perceive credit risk). Equity markets too have rallied.
All this is because many important central banks have aggressively pumped money into the global economy.
There has been tremendous buzz over the past few days about how companies are selling assets, refinancing debts and rolling over short-term loans. However, it is still difficult to distinguish between genuine deals and rumours floated to talk up share prices.
That said, it is likely that several of the most cash-strapped firms could be breathing a bit more easily.
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First Published: Wed, May 20 2009. 11 31 PM IST
More Topics: Companies | Finance | Loans | Equity markets | Debts |