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    Banking Case StudyG2

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    Pjay Patel
    ABG Shipyard was once India's largest private shipbuilder but faced bankruptcy in 2017 with debts over $2.5 billion. The company grew rapidly after its IPO but took on large debts to finance expansion. It struggled with mismanagement, failed to adapt to industry changes, and was hurt by the 2008 recession. Despite restructuring attempts, ABG Shipyard could not repay creditors and was declared bankrupt.

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    Banking Case StudyG2

    Uploaded by

    Pjay Patel
    21 views12 pages
    ABG Shipyard was once India's largest private shipbuilder but faced bankruptcy in 2017 with debts over $2.5 billion. The company grew rapidly after its IPO but took on large debts to finance expansion. It struggled with mismanagement, failed to adapt to industry changes, and was hurt by the 2008 recession. Despite restructuring attempts, ABG Shipyard could not repay creditors and was declared bankrupt.

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    Comparison between two banks

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    ABG Shipyard was once India's largest private shipbuilder but faced bankruptcy in 2017 with debts over $2.5 billion. The company grew rapidly after its IPO but took on large debts to finance expansion. It struggled with mismanagement, failed to adapt to industry changes, and was hurt by the 2008 recession. Despite restructuring attempts, ABG Shipyard could not repay creditors and was declared bankrupt.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    21 views12 pages

    Banking Case StudyG2

    Uploaded by

    Pjay Patel
    ABG Shipyard was once India's largest private shipbuilder but faced bankruptcy in 2017 with debts over $2.5 billion. The company grew rapidly after its IPO but took on large debts to finance expansion. It struggled with mismanagement, failed to adapt to industry changes, and was hurt by the 2008 recession. Despite restructuring attempts, ABG Shipyard could not repay creditors and was declared bankrupt.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    ABG SHIPYARD

    FRAUD
    PRESENTED BY : GROUP 2
    Group Members
    No. Name Enrolment No.

    1. Turk Ibrahim 218360592001

    2. Saroj Varrier 218360592023

    3. Manashi Adani 218360592049

    4. Shah Drashti Hiren 218360592052

    5. Laxkar Harshita Harikishan 218360592053

    6. Vora Dhairya Tushar 218360592067


    Introduction

     ABG Shipyard was a major shipbuilding company in India, founded in 1985 by


    Rishi Agarwal and his brothers.
     The company grew rapidly and became one of the largest private shipbuilders
    in the country, with clients including the Indian Navy and international
    companies.
     However, ABG Shipyard eventually faced financial difficulties and was
    declared bankrupt in 2017.
    Background
     ABG Shipyard went public in 2005 with an initial public offering (IPO) that
    raised over Rs. 400 crores.
     The company had ambitious plans for growth, with a goal of becoming the
    world's largest shipbuilder by 2020.
     ABG Shipyard took on large amounts of debt to finance its expansion, and at its
    peak had a market capitalization of over Rs. 11,000 crores.
    Financial Troubles
     ABG Shipyard began to face financial difficulties in the years following its IPO.
     The company was unable to generate enough revenue to repay its creditors, and
    its debt burden grew larger.
     ABG Shipyard attempted to restructure its debt and sell some of its assets, but
    these efforts were not successful.
    In 2017, ABG Shipyard was declared bankrupt with debts of over Rs. 18,000 crores
    Management Issues

     Many analysts point to management issues as a major cause of ABG Shipyard's


    downfall.
     The Agarwal brothers were accused of mismanagement and diverting funds for personal
    use.
     The company lacked a clear strategy and failed to adapt to changes in the industry.
    ABG Shipyard also had a complex ownership structure, with multiple subsidiaries and
    related parties, which made it difficult to assess the company's financial health
    Economic Factors
     Economic factors also played a role in ABG Shipyard's decline.
     The global financial crisis of 2008 had a negative impact on the shipping industry,
    reducing demand for new ships.
     In addition, the Indian government's policies on shipbuilding and infrastructure
    development were inconsistent and often changed, making it difficult for companies like
    ABG Shipyard to plan for the future.
     ABG Shipyard also faced competition from low-cost shipbuilders in China and South
    Korea.
    Legal Issues
     ABG Shipyard was also involved in several legal disputes that may have contributed
    to its downfall.
     The company was accused of defaulting on loans and not repaying its creditors,
    leading to legal action by banks and financial institutions.
     The Agarwal brothers were also involved in a separate case of alleged financial fraud
    at another company they owned, which may have damaged their reputation and
    credibility.
    Lessons Learned
     The ABG Shipyard case provides several lessons for businesses and
    investors.
     First, it highlights the importance of strong management and clear
    strategy in ensuring long-term success.
     Second, it underscores the risks associated with taking on too much debt
    and failing to generate sufficient revenue.
     Finally, it demonstrates the impact of external factors such as economic
    downturns and government policies on a company's fortunes.
    Conclusion
     ABG Shipyard's bankruptcy was a significant event in India's shipbuilding
    industry and serves as a cautionary tale for businesses and investors.
     By learning from the mistakes made by ABG Shipyard, companies can avoid
    similar pitfalls and build sustainable, successful enterprises.
     It remains to be seen what the future holds for ABG Shipyard, but its
    downfall serves as a reminder that even the largest and most successful
    companies are not immune to failure.

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