what form of investment is good for the company to survive or take advantage during recession

1. INVESTMENT PATTERN IN GLOBAL RECESSION by JEAY &VJ (MUDOMS)

2. Recessions may very well be the greatest investment opportunities of a person's lifetime. Economists officially define a recession as two consecutive quarters of negative growth in gross domestic product (GDP). The National Bureau of Economic Research cites "a significant decline in economic activity spread across the economy, lasting more than a few months" as the hallmark of a recession. A recession generally fat trimming for companies, from which they should emerge stronger, and that's good news for investors. companies performing well in a recession will also perform well in a recovery RECESSION

3. Undervalued Securities Lower Home Prices for First-Time Buyers Consumer Bargains Lower Interest Rates Stimulus Opportunities Debt Forgiveness or Reduction Firing/layoffs of incompetents (better promotion prospects) 7 OVERLOOKED BENEFITS OF THE RECESSION

4. Capital investment Lay off Dormant mode Merger & Acquisition OPTIONS IN RECESSION

5. Improve liquidity position Search for new sources of income Bring immunity to business for a long-term survival and growth BEST STRATEGY TO COUNTER RECESSION

6. CASE OF TATA STEEL & CORUS

8. In the mid- 1990s, emerged as Asia’s first and India’s largest integrated steel producer in the private sector.

9. Feb 2005 - Acquired Singapore steel manufacturer NatSteel - Access to major Asian markets and Australia.

10. Dec 2005 - Acquired Thailand based Millennium Steel.

11. Financial year 2006-07 - Net sales Rs.175 billion.

12. Profit before tax - Rs. 64.14 billion

13. Profit after tax - Rs. 42.22 billion. TATA STEEL PROFILE

14. THE TATA STEEL FACTOR!

15. THE LONG TERM STRATEGY

17. Company had four divisions: Strip product , Long product , Aluminum and Distribution and Building system.

18. Major plants in UK, Netherlands, Germany, France, Norway and Belgium.

19. Supplies to the most demanding markets worldwide including construction, automotive, packaging, engineering.CORUS

20. THE CORUS FACTOR!

21. Valuing the Acquisition: Method used Enterprise value multiple. EV represents a company’s economic value, the minimum amount someone would have to pay to buy it outright. EV = Market Capital + Preference Stocks + Minimum interest +long term debt – cash equivalent. EV = 3.5 billion + 0 + 26 billion + 1308 million – 871 million VALUATION

23. The deal price was US $12.11 Billion.

24. On 17 Oct, 2006 Tata’s bid was 455 pence per share (Normal rate 390 pps).

25. Tata Steel, the winner of the auction, declared a bid of 608 pps surpassing the Brazilian steel maker CSN (603 pps).

26. The combined entity became the world’s 5th largest steelmaker of the world.FINAL DEAL

28. Tata had a strong retail and distribution network in India and SE Asia. Hence this would bring a combination of high quality developed and low cost high growth markets.

29. Technology transfer & cross-fertilization of R&D capabilities .

30. There was a strong culture fit between the 2 organizations which highly emphasized on continuous improvement & Ethics.

31. Economies of Scale and Increase in profitability.

32. Backward integration for Corus and Forward integration for Tata Steel.SYNERGY

33. INCOME STATEMENT OF TATA STEAL

34. INCOME STATEMENT OF CORUS

35. OUTCOME

36. PROJECTED CAPACITY

37. GLOBAL RANKING

38. Acquisition is strong pattern of investment Recession facilitates Reverse Takeover phenomena Cost advantage of Bear market In long term, high yields and capital appreciation occurs Synergy and Global Market entrance CONCLUSION