Jose Thomas

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Friday 06th May, 2011



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In my last story I wrote about how I averted my company from going bankrupt. Of course, it was great news and a great achievement. This is how the re-building exercise started. The collapse was so severe and the damages terrible. Even though I veered the company from bankruptcy, the challenge of putting the company back on track remained. It was like a patient in the ICU on ventilator support.

The total debt was an astronomical figure of Rs.90 crores in 1995, which, in today’s terms is equivalent to about Rs.300 crores. In the normal course, no one would have even thought of taking such a company back to health because the debt was severely out of line. Usually people give up! This is where my ‘Never Say Die’ attitude asked me a question. “The damage has happened, what would I lose if I made an attempt to turn it around?” I was very aware of the consequences to my company, my career and my dream if I had not made an attempt. I faced pressure from my banks, non-banking financial companies and sundry creditors. The norms of Non Performing Assets classification during that time, fortunately, were much more lenient than what it is today. Hence, I knew I could negotiate and either do a one-time settlement with concessions or ask for re-scheduling of repayments.

I first took the decision of re-schedulement because I had the confidence that I could correct my business and bring it back to profitability. I was confident that I could repay the amounts that I owed, even though it was a tall order. I met with every bank and institution I owed money to, discussed my plan and gave them my projections. I said to them “I owe you money, which I am obligated to re-pay”. I said “You have two options – give me an opportunity or shoot me down through the legal process”. They probably noted my enthusiasm and backed with substantial data I could convince them for re-scheduling the payments.

I also did the same exercise with my unsecured creditors. I explained to them clearly to trust me, rather than push me. It was like a home without a roof that was being battered by rain and thunder. That was my case! But, the confidence that I gained and the courage that came into me through divine power helped me to keep smiling and to put on a bold front.
Minutes and hours flew as I was busy fire fighting, handling people, keeping my cool, not losing hope and I came out of every meeting feeling like a winner.
My customers worldwide supported me and business was progressing. But, this was not enough. I desperately needed a cash infusion. I kept my eyes and ears open for opportunities, searched every avenue to raise some cash. Bankers and other financial institutions agreed to give me time to repay my debt but refused to fund more money.

I found it extremely difficult to handle the situation with an empty cash box, even though the business was running. When I came into the office, I didn’t give the impression to my employees, especially to the seniors, that I had lost hope. On the contrary, I took them into confidence and got them to align with my philosophies. We worked together as a team.

During this period, India needed exports and during 1997 the Asian Currency Crisis left the Indian economy badly bruised. I even remember the rupee lost value against the U.S. dollar and almost touched Rs.50. All Asian currencies lost value and this again was the fuel to the fire of my business problems. As I walked into office each morning, there were new issues, new problems but I didn’t consider them as problems. I converted them into challenges.
Giving up is easy, but committing to fight is something that comes from within you which creates a momentum to ‘go for it’.

During the Asian crisis, India was opening up the economy and encouraged large business houses to participate in increasing the country’s exports. In fact, the Government of India offered many benefits to become a star export house and offered incentives on incremental exports. Many such large companies approached small exporters like me and asked if we could route our exports through them.

The minute I got to know about this I started to make enquiries. Rumour was already out on the street that Choice was in trouble and no such export house wanted to do business with us. What they normally did was to approach exporters and give huge advances based on an agreement that the exporters would route their exports through them. I was being turned down by many, but a company based in Gujarat (they are big even today) agreed to fund me Rs.10 crores, based on an agreement that I will route my exports through them. Gosh! This was a break. To this day, I am very grateful to this company for lending me a hand.

I used this timely infusion of funds prudently for increasing my sales and profitability. I completed the export obligation in a timely manner and they kept funding me again.

In the meantime, I started to make full use of the policy that the Reserve Bank of India brought in – a ‘One time settlement’ with banks. By this time I had parked enough funds in reserve, i.e. the funds I received from these export houses plus the surplus I made during this period and accumulated about Rs.20 crores. I also disposed my Non Performing Assets and altogether, had a reserve of about Rs.25 crores.

I sat down with all my banks and made a onetime settlement, got up to 30% discount on my debt, took the money that I kept in reserve, paid them and proved my good intention to settle them.

Friends, within a period of four years, into the year 2000, I was able to reduce my debt burden Rs.90 crores to about Rs.40 crores- a 50% improvement from where I was.

The journey continues….Stay tuned.

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Responses to
 Abdul Manaf says:
Keep writing sir, reading your experience is really good for young entrepreneurs like me
 Tijo says:
Jt. U r incredible. When is the 40 floor choice paradise building opening? I hope u will allow a public viewing. I also heard rumours of a 2nd choice school! Is this true?
 raghuveer kushwaha says:
hi jt. I read your story.i think its like my thoughts- this story around me.thanks to you, I hope this is a true story, it builds self confidence. it set the goal.Very useful to us. Thanks Raghuveer kushwaha