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1 – 10 of 350Asheq Rahman, Hector Perera and Frances Chua
International business, Accounting and Finance.
Abstract
Subject area
International business, Accounting and Finance.
Study level/applicability
Undergraduate and Postgraduate levels (advanced financial accounting, international accounting, other accounting and business courses with an international setting.
Case overview
The case uses the Asia Pulp & Paper Company’s (APP) entry into the international debt market to highlight the consequences of different business practices between the East (in this case, Indonesia) and the West. On the one hand, it shows that APP was set up as the “front” to access international debt capital; on the other, it reveals the naïvety of Western lenders who parted with their funds without conducting a thorough background research on the financial viability of the company they invested in. The APP debacle is a poignant reminder for market participants and business/accounting students that the divergence of the business settings across countries can make business contractual arrangements tenuous and corporate financial information irrelevant to its users. It also exposes the unique ways of how some Asian countries conduct their business affairs.
Expected learning outcomes
The following are the expected learning outcomes: comprehend the impact of differences in culture and ethnic origin on business practices; evaluate the impact of cultural nuances on the legality of contracts in the international business setting; understand the impact of currency fluctuation on the financial position of multinational firms; and be more cautious in conducting business and entering into contracts with foreign firms.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code
CCS 1: Accounting and Finance.
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Aramis Rodriguez-Orosz and Federico Fernandez
After completion of this case study, students will be able to describe the funding path for start-ups, including the amounts and profiles of the usual investors or sources of…
Abstract
Learning outcomes
After completion of this case study, students will be able to describe the funding path for start-ups, including the amounts and profiles of the usual investors or sources of funds, according to the moment in their life cycle and the characteristics of the initiative; highlight the challenges faced by start-up founders in weak entrepreneurial ecosystems and risky institutional environments; and argue in favor of or against different modes and typical instruments of venture capital (VC) investments in the early stages of new businesses, each of them different regarding dilutions, valuation potential, depth of negotiations and term sheets.
Case overview/synopsis
Asistensi, a technology and telemedicine start-up founded in 2020 in Venezuela by three entrepreneurs (Andrés Simón González-Silén, Luis Enrique Velásquez and Armando Baquero), raised US$3m in less than a year in a seed round in which it attracted the attention of professional VC funds such as Mountain Nazca, Alma Mundi Ventures and 468 Capital. Everything was set for launching operations in Mexico and the Dominican Republic in April 2021. However, a series of difficulties led to higher expenditure than planned, prompting the entrepreneurs to seek additional capital. The decision on the financial instrument to be associated with the potential valuation and shareholder dilution figures has been posed as a dilemma.
Complexity academic level
The case study focuses on understanding the start-up financing process. It can be used effectively in management- and finance-related subjects for graduate students taking introductory topics in entrepreneurship and entrepreneurial finance, as well as introductory executive education courses in entrepreneurship, entrepreneurial finance and VC.
Supplementary materials
Teaching notes are available for educators only.
Subject code
CSS3: Entrepreneurship
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S. Venkataraman, Saras D. Sarasvathy, Bidhan L. Parmar and Gosia Glinska
The case chronicles the development of Lumni, Inc., an international start-up offering innovative mechanisms for financing higher education. It focuses on: the details of decision…
Abstract
The case chronicles the development of Lumni, Inc., an international start-up offering innovative mechanisms for financing higher education. It focuses on: the details of decision making required to transform an idea into a viable business; building partnerships; the challenge associated with raising venture capital; and the challenges of creating a new market where human capital can be traded to finance higher education.
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A.M. Hafizi, Shahida Shahimi, Mohd Hafizuddin Syah Bangaan Abdullah and M. Badrul Hakimi Daud
Islamic Finance and Investment
Abstract
Subject area
Islamic Finance and Investment
Study level/applicability
Level of program/audience: Advanced undergraduate and postgraduate.
Courses
Intermediate and Advanced Finance, Economics, Islamic Economics & Finance, Islamic Banking & Finance, Islamic Capital Market and other relevant courses.
Specifictopics/syllabus
Capital markets instruments, conventional or Islamic.
Case overview
This case focuses on Tracoma Holding Berhad Bai Bithaman Ajil Debt Securities (BaIDS) amounting to RM 100 million which was issued by Tracoma Holding Berhad in 2005. It was the first issuance of a sukuk (Islamic debt securities or bond) by the company. The proceeds were used to finance its growth and to repay existing bank borrowings and capital requirements. This case is interesting, as it allows students to study the bai bithaman ajil sukuk structure and issuance process in the Malaysian capital market. It also provides basic financial transaction and credit rating of sukuk which requires analytical skills. Being a debt-based facility, the sukuk was subjected to credit rating evaluation by the MARC, the rating agency appointed by the company. Further downgrading of the sukuk meant it would lead to the worst-case scenario. Some actions needed to be taken to solve this issue; therefore, the CFO suggested an urgent meeting with the sukuk holders.
Expected learning outcomes
The students should be able to: understand the issuance process and the principle of BBA (bai bithamin ajil) in sukuk structure; understand reason(s) methods of fund raising by firm and the allocations of fund; understand the sukuk default issue; analyze the reasons for sukuk default; understand the importance of debt securities credit ratings; and identify investors' protection in the case of sukuk default.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
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The data for the case study were collected as part of a consulting project. In an interview (orientation meeting), the management of the company outlined the key data on the…
Abstract
Research methodology
The data for the case study were collected as part of a consulting project. In an interview (orientation meeting), the management of the company outlined the key data on the company and the problem, which were used to describe the case study. The account balances of the revolving credit facility were provided as an Excel file and analyzed and processed in the follow-up. The names of the company and individuals in the case were changed to protect the identities and privacy of the involved parties.
Case overview/synopsis
This case represents a real practical problem, in which James was asked to take over a mandate as interim manager for a family business in a severe crisis. The crisis situation also manifested itself in the company’s severely strained liquidity situation. One of the first important measures was to enable smooth solvency or to expand the liquidity scope. An analysis of the bank balances over a longer period of time showed that the liquidity situation had already been tight for several months, but the previous management had done nothing to remedy this situation. James asked himself how he should proceed to solve this problem.
Complexity academic level
This case study is suitable for lectures that focus on corporate finance or financial restructuring. It should build on basic knowledge related to financing instruments and working capital. The case study can, therefore, be used for undergraduate students (Bachelor level) in a higher semester or as an introduction for Master’s students.
Learning objective
An instructor can use this case in courses related to finance or financial restructuring. Target groups are undergraduate students (Bachelor level) in a higher semester or as an introduction for Master’s students. Students should have prior knowledge of financing instruments and working capital management. The case shows a frequently occurring and therefore important standard case, which can be solved on the basis of the outlined procedure. After completion of the case studies, students should have a deeper understanding of basic financial principles and be able to propose how financial restructuring could be conducted in case of lack of liquidity and limits in headroom.
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Joao Carlos Marques Silva and José Pereira
Analysis of public sources.
Abstract
Research methodology
Analysis of public sources.
Case overview/synopsis
The bank named “Novo Banco” (New Bank in Portuguese) was created because of an emergency intervention by the Bank of Portugal to save the “good” assets of the once great but bankrupt Banco Espírito Santo (BES) on August 4, 2014. The toxic assets remained in BES (dubbed “bad bank”). BES was one of the biggest private banks in Portugal, with origins mounting back to the year 1869. In 2013, it was headed by the founder’s great-grandson, Ricardo Salgado, when an external audit revealed several problems with the bank’s accounting and concluded that BES had a severe financial problem (the risky credit represented 11.1% of the bank’s accounts). The bank underwent a public capital increase (endorsed by several public figures, including the Portuguese President at the time, Cavaco Silva) of €1.045m to reposition itself, which was 100% successful (demand of about 160%, with a significant part of foreign investors). However, continued amounts of suspicions led Ricardo Salgado to be replaced by Vitor Bento (via a settlement between BES’s shareholders and the Bank of Portugal) in July 2014. At the end of that same month, BES announced imparities totaling the amount of €4.2535m. This led the European Central Bank to suspend BES’s access to the financial operations, forcing it to reimburse its credit to the Eurosystem in the value of €10.000m. In two days, the stock prices dropped by 80% to around €0.03 per share. It was later proven that the administration led by Ricardo Salgado had disobeyed the Bank of Portugal 21 times between December 2013 and July 2014, apparently acting against the institution’s best interests. Some carousel schemes with companies within the Espirito Santo Group were also detected in BES’ financial movements to improve the bank’s financial statements.
Complexity academic level
Finance Valuation, Strategy
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Odongo Kodongo, Claire Beswick and Helen van den Berg
After working through and discussing this case, learners should be able to:1. evaluate the financial condition of Ellerine Holdings Limited (EHL) at the time of the merger…
Abstract
Learning outcomes
After working through and discussing this case, learners should be able to:1. evaluate the financial condition of Ellerine Holdings Limited (EHL) at the time of the merger proposal and use it to make inferences about the company’s ability, at that time, to function effectively as a going concern;2. identify the conditions within EHL and in the operating environment that may have made it necessary for EHL to seek to change its business strategy;3. determine whether the acquisition price offered to EHL by African Bank Investments Limited (ABIL) was fair; and4. compute the value accretion/loss expected to be realised by the existing shareholders of ABIL and EHL under the merger proposal.
Case overview/synopsis
This case situates the directors of Ellerine Holdings, a furniture retail company that merged with African Bank Limited in 2007, reflecting on the events that led up to both entities being placed into business rescue in 2014 and asking whether the merger was the cause of the demise. If they had chosen an alternative partner, would the results have been different?
Complexity academic level
Masters Level students – MBA or Masters in Finance.
Supplementary materials
For instructors.The following material has been provided with the teaching note for instructors:- Teaching Note.- Johannesburg Stock Exchange News System (SENS) extract of related original filing.For students.The following supplementary material has been provided to accompany the case:- Financial information on the two companies (Excel spreadsheet).- Johannesburg SENS extract of related original filing.
Subject code
CSS 1: Accounting and Finance.
Details
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Kumar Ramchandani and Kinjal Jethwani
The learning outcomes are as follows: understand the mechanism of sourcing and allocation of funds in the Indian banking industry; compare financial indicators of Yes bank with…
Abstract
Learning outcomes
The learning outcomes are as follows: understand the mechanism of sourcing and allocation of funds in the Indian banking industry; compare financial indicators of Yes bank with the industry average and interpret the hidden stress; understand the role of NPAs in the banking industry and analyze Yes bank’s performance; and identify the possible red signals in the business model of Yes bank.
Case overview/synopsis
The case narrated the story of Yes bank which was considered as one of the most promising and rising banks of India. The stock of Yes bank had been the preferred investment choice for many investors because of its outstanding performance in almost all the important parameters of the industry since 2005. Since its inception, investors favored the stock with an assumption that this new generation bank had a unique as well as a sustainable banking model. However, after the year 2016, Reserve Bank of India (Indian central bank and banking regulator) found huge under-reporting of non-performing assets (NPAs) in the three (i.e. 2015–16, 2016–17 and 2018–19) out of its four annual regulatory inspections, casting doubt in the way Yes bank functioned. Risk and aggression seemed to be the two most important aspects of Yes bank’s culture and this case tried to narrate the same through various financial indicators. The ratio comparison with the industry average indicated the possible gray areas of Yes bank, which was once considered as the most promising bank of India. Unfortunately, even the change of guard at the helm of Yes bank did not change the fate of the bank.
Complexity academic level
MBA/PGDBA/Executive MBA.
Supplementary materials
Teaching Notes are available for educators only.
Subject code
CSS 1: Accounting and Finance.
Details
Keywords
Marketing of financial products.
Abstract
Subject area
Marketing of financial products.
Study level/applicability
Graduate level. Occasionally, for undergraduate students with a strong background on branding strategies and strategic analysis. Applicable to analyze how companies can improve their branding strategies in highly regulated industries.
Case overview
In 2016, Claire Solís was discussing with her team the paths to ignite growth and brand awareness of the only digital bank in Mexico. To better position the brand on the Mexican financial market, Bankaool had decided to go 100 per cent online, a branch-less institution. The case presents a condensed history of banking and the shifts in digital consumer behavior. As the case continues, Bankaool products are introduced along with some concerns to keep the business going, particularly, regarding the bank’s health and further growth. The newly appointed CMO and her team have to decide next steps to boost product growth just before the Fintech industry grows more mature and competitive – a scenario of more complex decisions. While they reckoned the potential of Bankaool in sales for the short term, they also need a strategy to position the Bankaool brand in the long term while they struggle with a need to accelerate growth and generate a return for investors.
Expected learning outcomes
To understand the launching of a new bank in the digital arena. To understand consumer behavior in a setting of increasingly higher digital coverage and diffusion of smart devices. To recognize that brand value goes well beyond product development and launch. To gain awareness on the perks and perils of a digital-only bank.
Supplementary materials
Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code
CSS 8: Marketing.
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David C. Smith, Larry G. Halperin and Michael Friedman
This case is taught at the University of Virginia McIntire School of Commerce in the fourth year course, “Corporate Restructuring.” The case is suitable for advanced…
Abstract
This case is taught at the University of Virginia McIntire School of Commerce in the fourth year course, “Corporate Restructuring.” The case is suitable for advanced undergraduates or MBS students that have already completed a course in corporate finance or valuation. The material would fit well in a second Corporate Finance class, particularly if the instructor would like to devote some time to discussing financial distress and restructuring. It could also work well in a business reorganization class at a law school. Danfurn LLC is a U.S. manufacturer and retailer of high-end furniture that is in financial distress following a 2007 LBO and subsequent declines in profitability in the wake of the financial crisis of 2007–08. The nearly 50-year-old company has recently blown through cash flow covenants on its $100 million senior financing facility and is seeking a restructuring of its capital structure that will allow the company to survive. Although Danfurn's lenders are hopeful that a consensual decision can be reached on how to restructure the company without resorting to a bankruptcy filing, filing for bankruptcy or even liquidating the company are very real possibilities. This case is an exercise in negotiating a consensual restructuring of a financially distressed company when stakeholders have varied incentives, legal rights, potential remedies, and interests in how the company will be managed going forward. The case discussion works best if students are divided into groups representing the different stakeholder groups—the senior lender, mezzanine lender, board, private equity owner, and founder interests—and are asked to think about how best to maximize their positions while recognizing the costs of failing to reach a negotiated outcome.
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