Chatterjee says negotiating with bankers is a little like playing poker or a mind game.
If there was a turning point in Koushik Chatterjee’s life, it was the night when as a teenager in Calcutta he stayed up all night making petrol bombs with raw rubber and pins. It was December 1992, and the city had turned violent following the demolition of Babri Masjid. The local dadas roped in Chatterjee and his hostel mates to make bombs. The unrest died down but Chatterjee, who was studying for his CA finals, decided he must get out of city.
Luckily, he got a break as an intern with CA firm Billimoria in Jamshedpur. His experiences in Calcutta had no doubt rattled Chatterjee but they also left him bolder. Indeed life in the big city and his seven years at the hostel — which housed not just students but people from all walks of life including drug addicts — had been a dramatic change for the quiet, introverted boy from the small township of Burnpur, Asansol. But they taught him how to deal with people, and most importantly, how to say no.
Those lessons came in handy during his 15 years as chief financial officer (CFO) of Tata Steel, a position he assumed at 36. It was baptism by fire because in less than two years — January 2006 — Tata Steel had bought Corus in a whopping $12-billion deal. Rustling up $6 billion of debt to fund the transaction was not too hard, though refinancing an LBO — a leveraged buyout — with a corporate funding mechanism was not market practice in those days, especially in Europe.
The subsequent collapse in the steel cycle dented Corus’ bottomline, leaving Chatterjee and his team to manage the large debt which they did by continuously refinancing the loans. In December 2009, Corus announced the partial closure of its Teeside plant as it reported steep losses. Indeed, some $60 billion has been invested over a 12-year period — a mix of loans, equity, hybrids, bonds, CARS — and for much of this time the underlying business was fragile.
To be sure the Tata name carries a lot of weight but Chatterjee and his team nonetheless worked hard to ensure no covenants were breached. At one point, in 2015-16, among the worst years for steel globally, Tata Steel’s debt to Ebidta was nudging 10 times, partly because was spending on projects in India. Among the biggest challenges for the team was negotiating with the UK government and unions on pensions for workers.
Chatterjee says negotiating with bankers is a little like playing poker or a mind game. You need to be able read the opponent’s mind to gauge how good a hand he has and also know when to walk away. Also, it’s important to keep looking ahead and building — both blue sky and dark sky scenarios. Most of all, it’s critical to stay calm.
Above all, he stresses the importance of an in-house team — ‘you can’t win a war with hired soldiers’.
Chatterjee wishes he had learnt to play the sitar from his mother but since he didn’t, he now tunes in to Hindustani classic instrumental music. Ironically, Chatterjee didn’t really want to go back to Tata Steel from Tata Sons where he had spent some fascinating five years working on the TCS IPO, the JV with AIG, Tata Sky, restructuring the Tata Group and other projects. No two days were ever the same, he says, and working with Ishaat Hussain was wonderful because it was a ‘free space where which one was allowed to learn fail and re-learn’.
But in 2003, B Muthuraman wanted him back and Chatterjee became the CFO at the group’s flagship firm. It was indeed a remarkable co-incidence that his father had spent a lifetime in IISCO and that he himself had grown up amidst blast furnaces. What Chatterjee misses most these days is sports; as a young boy he played virtually every game — from football and cricket to badminton and table tennis. These days all he has time for is some swimming. But that, he says somewhat wistfully, isn’t good enough because he’s very partial to food and his wife is a very good cook.
He’s also hoping to be able to pursue his other passion: teaching. During his first stint at Tata Steel between 1995 and1999, having failed to become a member of any of the clubs in Jamshedpur, he landed up at XLRI and found himself a part-time teaching job. He might soon be back there.