Strategies for operating in this liquidity crisis

From Ratan Tata‘s letter to all Tata companies (dated: Nov 6 2008):

Under the circumstances I consider it essential that each of our companies should consider:

  • the conservation of cash to the maximum extent possible
  • draw down all loans / lines of credit from banks and institutions to the maximum extent possible
  • expeditiously finalise pending load and funding agreements, even if they involve accepting higher rates of interest

Companies should also take finite steps to:

  • improve operational efficiency
  • aggressively implement restructuring of internal cost framework
  • drastically reduce operating expenditure
  • defer non-essential capital expenditure and capacity expansion
  • put on hold any plans for acquisitions unless considered strategically critical

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