Friday, September 12, 2008

Wilbur Ross Tries India

From BusinessWeek:

India has been a slog for Wilbur L. Ross Jr. The New York investor, who likes to buy downtrodden assets and then cut away every inch of fat to rehabilitate them, opened an office in Mumbai two years ago to hunt for deals. But with the country's economy expanding fast and the Bombay Stock Exchange soaring, few were interested in selling at the kinds of prices Ross was willing to pay. "We were bidding, but losing, losing, losing," Ross says, while rivals "were paying very big prices."

Now, with its stock market in reverse and merger activity slowing, India may finally be ready for Ross. On Aug. 11 he took an $80 million stake in SpiceJet, an Indian discount airline. And he has a $300 million fund ready for other deals in the country. From a spartan office in Mumbai—a bouquet of dyed turquoise orchids on the reception desk is the only aesthetic touch—Ross' team is exploring investments in sugar, cement, real estate, and more. "Our mandate is to look at any situation where . . . there is some degree of distress and there's potential for consolidation," says Ranjeet Nabha, CEO of Ross' India operations.

It's part of Ross' global strategy. He made his fortune stitching together the remnants of troubled U.S. industries such as steel, coal, and textiles. His playbook involved gobbling up assets on the cheap and combining them into a lower-cost operator that he later could sell off at a hefty profit. His most famous deal: the 2004 sale of his steel business to Lakshmi N. Mittal for $4.5 billion, at a profit of more than $2 billion in just two years. His philosophy hasn't changed, but his stomping ground has gotten a whole lot bigger. Today, two-thirds of WL Ross & Co.'s earnings come from outside the U.S...MORE