Arvind Mills' Restructuring Plan
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Case Details: |
Price: |
| Case Code |
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FINC011 |
For delivery in electronic format: Rs. 200;
For delivery through courier (within India): Rs. 200 + Shipping & Handling Charges extra
ThemesCorporate Restructuring |
| Case Length |
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8 Pages |
| Period |
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1997 - 2001 |
| Pub. Date |
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2003 |
| Teaching Note |
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Available |
| Organization |
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Arvind Mills |
| Industry |
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Financial Services |
| Countries |
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India |
Abstract:
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The case provides an overview of the Arvind Mills' expansion strategy, which resulted in the company's poor financial health in the late 1990s. In the mid 1990s, Arvind Mills' undertook a massive expansion of its denim capacity in spite of the fact that other cotton fabrics were slowly replacing the demand for denim. The expansion plan was funded by loans from both Indian and overseas financial institutions. With the demand for denim slowing down, Arvind Mills found it difficult to repay the loans, and thus the interest burden on the loans shot up. In the late 1990s, Arvind Mills ran into deep financial problems because of its debt burden. As a result, it incurred huge losses in the late 1990s. The case also discusses in detail the Arvind Mills debt-restructuring plan for the long-term debts being taken up in February 2001.
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Issues:
» Debt driven expansion plan, financial restructuring of Arvind Mills
Contents:
Keywords:
Arvind Mills, expansion strategy, company's, poor financial health, late 1990, massive expansion, denim capacity, cotton fabrics, slowly, denim, funded, loans, Indian, overseas, financial institutions, repay, interest burden, financial problems, debt-restructuring plan, February 2001
Arvind Mills' Restructuring Plan
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