To help someone when in distress is humane and when companies cry out for help, naturally, they need a helping hand. Sometimes, the bailout is right but sometimes, unscrupulous companies take advantage and get away. So promoters borrow mindlessly and then banks bail them out. Companies are not able to repay debt and banks, to protect their interest too, reduce rates or sometimes extend repayment schedules. In simple parlance, CDR is given to companies reeling under debt which has been borrowed from a consortium of bankers and institutions. Like getting into rehab – the company will emerge lean and clean after getting into CDR. The same psyche is true for CDR it is hope that things will now improve for the company. This is like a patient diagnosed with cancer the moment one gets to know that chemo and other medications have been started, there is hope and hence optimism. The moment a company announces that it is getting into CDR, the stock price zooms up. Corporate Debt Restructuring or CDR is hugely popular with traders.
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