Assignment: A Europe-based green energy company was considering a tie-up with a waste to energy company based in western India. The company reached out to Netrika Consulting to carry out a detailed reputational due diligence study.
Findings: A detailed study of the entity was carried which confirmed that the company had been in existence for nine years with all the requisite licences. The promoters were experienced and their early years of business was bankrolled by contracts from the Jawaharlal Nehru Urban Renewal Mission (JNNURM). Its top line was growing but the bottom line was still in the red. Its business seemed to be doing well because the losses were consistently showing a downward trend. The study established that one of their plants had a blast some years ago. One of the company’s clients said that the quality of compost made by the company was not good. Others too had different complaints about the quality of the compost. There were some reports of delayed payments to vendors too.
Solution: On further inquiries, it was found that there were complaints about the quality of the compost because of technical issues in the segregation of waste. That had caused lesser electricity to be produced against what had been promised. The company, it could be established, was looking for partnership because of the technical challenges they were facing. They accepted the issues when it was brought to their notice by the European partner, who could negotiate a better deal with actionable information.