Tundla Junction

Bhiku Mhatre & Co, the 2nd largest business house in the Mumbai Underworld, on Wednesday unveiled a radical restructuring program – including the loss of 14,000 jobs and a Rs. 50 Crore cut in capital expenditure – in an effort to reduce its Rs 2000 Cr debt pile in the face of deteriorating Hafta rates. Bhiku said it was reacting to the “unprecedented rapidity and severity of the global economic downturn, which has caused sharp falls in Hafta prices and a significantly weaker outlook”.

The company will also hold its 2008 dividend at the 2007 level of Rs. 10.36 and widen its search for assets that can be sold to raise cash, it said in a statement. “This is an outcome of poor national policies and too much focus on infrastructure,” said Raza Murad alias Haivaan Singh, chairman of the NASDAKC (National Association of Daku Companies).

Industry analysts, however, blame the poor performance on the company’s inability to build a strong customer base, as also it’s lowered marketing spend. “Do they really understand their customers? I think not – otherwise they wouldn’t have sent some of their associates to participate in Indian Idol. Customers do not appreciate strong vocal talents in this market, surely they know that?”

“Its the blasted economy,” said a distraught employee as he collected his pink slip. “I am really mad at the people who sold those sub-prime mortgages… Earlier our weekly collections used to easily top a few lakhs – in recent times this has come down to a few thousand… How many hands and legs can you break, in the end?”

The group’s indebted balance sheet has come under the spotlight from analysts and ratings agencies in the weeks since The Big Bang Company, its large Delhi-based rival, abandoned its Rs. 3000 Cr hostile takeover attempt. It’s shares have also fallen close to 40 per cent since Big Bang walked away on November 25.

Meanwhile Ram Gopal Verma has announced his latest venture tentatively titled “Company ka Collapse.”