Wall Street Journal
May 17, 2012
It's tin hat time. With European policy makers now openly contemplating a Greek euro exit, European companies need to make detailed contingency plans, lawyers and business advisory groups say. Many have yet to do so.
Sure, companies have generally addressed their first-order exposure to Greece, for example by minimizing cash balances held with Greek banks. Electronics retailer Dixons says it would close outlets temporarily if civil unrest breaks out in Greece. Companies have limited new investment into Greece and ensured their remaining Greek assets are matched by locally funded liabilities. That should reduce the risk of heavy foreign-exchange losses if Greece returns to the drachma.
But firms also need to assess the full impact on their supply chains, says Simon Collins, global head of transactions and restructuring at KPMG. That means understanding how exposed their suppliers are to Greece or assessing which banks might be in trouble after a Greek exit. Firms may need to choose whether to extend credit to key troubled suppliers, or quickly seek new supply sources. Companies should also assess their own funding needs: Credit facilities might suddenly become unavailable if banks themselves face a liquidity squeeze.
More
No comments:
Post a Comment