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With interest rates near all-time lows in late 2015, Stanley Cirano knew it was an opportune time to consider the financing on his portfolio of commercial real estate. Cirano Properties was the general partner on three separate private equity investments of retail shopping centers in suburban Chicago. The first, Brookline Road Shopping Center, had been acquired in 2006 and had been managed through the financial crisis and real estate downturn. The property was performing well and Cirano wondered whether it made sense to refinance or sell. The second property, Columbus Festival Plaza, had been acquired in a 2010 bankruptcy auction. Although the property had needed a good amount of capital improvements, Cirano was proud of the growth in net operating income he had been able to generate. The final property, Deerwood Acres, had been developed by Cirano himself after acquiring the property in 2013 from the previous owner, who had been operating a go-cart track and drive-in theater on the land. Cirano expected great things from the property, though his lease-up had been slower than anticipated.

Although the three properties had different levels of performance and presented different management issues, they all shared the fact that they were all significantly financed, in part, with debt. As the properties were acquired at different times, Cirano had simply selected what seemed like reasonable financing at the time. With his concern that interest rates would soon be rising, Cirano thought it made sense to take a holistic view of his portfolio, consider what debt options were available to him, and make a sound strategic decision on the financing of all his assets at the same time.

After studying and analysing this case, students would be able to evaluate and understand the importance and need of an infrastructure sector in a country, its inherent risks and scope of infrastructure investment and financing in India – National Infrastructure Pipeline and the important role of Non-Banking Finance Company’s (NBFC) vis-à-vis banks in infrastructure financing in India; critically analyse and recommend alternative decisions in a business problem situation using multi-criteria decision analysis, which is a tool used for business portfolio analysis; understand and evaluate the corporate portfolio management (CPM) tools used for an optimum portfolio mix to turn around companies; identify and suggest an optimum portfolio mix to turn around a finance company using CPM assessment applied to Pidun matrix; and recommend operational and strategic levers for successful turnaround implementation by using the integrated canvas on turnaround.

On 10 May 2020, in New Delhi, India, J. Ray took charge as a full-time director of an Indian Non-Banking Finance Company – Infrastructure Finance Company (NBFC-IFC). The NBFC-IFC of the Indian Government extended long-term financial assistance to infrastructure projects in India. During the financial year (FY) 2017–2018 till FY 2019–2020, the company suffered substantial losses to the tune of US$13.7bn, with profitability experiencing a notable decline – return on assets at a negligible 0.11% and return on equity of only 0.68%.

The NBFC-IFC had a declining yield on advances at 7.05%, net interest margins (NIMs) of 2.08% against a high cost of borrowing at 7.66%, a declining loan book (by 4.35%) of US$336.27bn and a fast-deteriorating asset quality with highest ever non-performing assets (NPAs) at 19.70% of its loan book. Such financial parameters, compared with that of the industry average of banks and finance companies, meant that the NBFC-IFC Ray had taken over was fast bleeding and was on the brink of being declared a sick company. In comparison, private and other government players had profitable and much healthier financials, and Ray felt that there was a need for improvement. To make things worse, Ray got to know that the Indian Government was in the final stages of setting up a new development finance institution focused on long-term infrastructure financing in India. Ray realized the question was not only of the NBFC-IFC remaining relevant but also of its existence in the fast-evolving sector. Ray wondered what could his his integrated canvas be for a turnaround strategy that could include effective management of an optimal portfolio mix.

With a healthy capital-to-risk (weighted) assets ratio of 30.85% and a satisfactorily improved net worth of US$103.1bn, in the given Reserve Bank of India regulatory provisions for the NBFC-IFC including restrictive exposure norms and NBFC-IFC’s operational mandate prescribed by the Indian Government, Ray had to shift the product and sectorial investment of the NBFC-IFC to reduce the NPAs, increase loan book size and improve the yield of advances and its NIM to effectively turn around the company’s profitability. Ray realized that he needed his team to evaluate and select a product and sector strategy for this change.

The present case of financing investment in infrastructure is interesting for implementation in developing economies because a lack of infrastructure is a common problem and there is a necessity of achieving a more developed infrastructure system to support accelerated economic growth in these countries. This case can be used in elective courses on corporate finance strategy and corporate portfolio management for infrastructure finance companies. This case can be taught in elective courses in post-graduate and MBA programs. This case can also be included in management development programs (MDP), executive MBA programs and executive-level courses that have subjects such as corporate finance strategy, corporate portfolio management and strategy management that focus on turnaround strategies including portfolio management for banks and finance companies.

Teaching notes are available for educators only.

CSS 11: Strategy.

Corporate finance, strategic financial management, financial innovation and financial engineering.

The case is suitable for graduate level management students.

In early April 2011, Mr Ramakrishnan, the CFO of Tata Power Ltd and members of his team were busy re-evaluating fundraising options for financing Tata Power's capital expenditure requirements, for refinancing of debt, for working capital related to current projects and for liquidity to support potential acquisition bids. The team had the task of evaluating different innovative funding options as the challenge was to strike a fine balance between maintaining the owners' equity without dilution of control and avoiding any adverse impact on credit rating that could increase the cost of capital; these constraints reduced flexibility for fund raising. Keeping in mind the global market scenario and estimating the investor appetite were factors critical to the structuring of a funding instrument.

The case will help students to be comfortable in thinking about evaluating markets, financial instruments and weigh rating considerations and regulatory constraints for taking capital structure decisions.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Stanley Cirano owns two retail shopping centers in suburban Chicago. With interest rates near all-time lows in late 2015, Cirano believed it was an opportune time to consider the debt financing of his properties. Although the properties were similar in many respects, the lenders willing to lend against each property were offering noticeably different terms. Cirano had to consider not only the interest rate and size of each potential loan, but also the various fees, potential prepayment penalties, and variations in recourse to make the best decision for each property.

After reading and analysing the case study, the students would be able to understand the various challenges in terms of credit expansion for a rural co-operative bank, discuss the role of an apex co-operative bank within the three-tier credit structure, understand the co-operative banks’ product offerings in the agribusiness space and understand the various styles of leadership and change management models within a rural bank.

This case study exemplified the enabling role played by a co-operative credit institution, Andhra Pradesh State Co-Operative Bank (APCOB). It discussed the issues and challenges APCOB faced in mainstreaming an unconventional lending process through its lower tiers. Although the three-tier credit structure played a significant role in the disbursal of short-term loan to farmers, the managing director strongly felt the need to reach out to farmer institutions like farmer producers organization through suitable product offering and right processes.

This case study could serve as an introduction to rural credit co-operatives in MBA courses such as bank management, agricultural finance and rural credit and organizational behaviour. The case study could also be administered as a part of training programmes for state co-operative banks, district central co-operative banks and urban co-operative bank that are involved in planning and execution of development strategies in the area of co-operative banking and agribusiness development.

Teaching notes are available for educators only

CSS: 1: Accounting and Finance.

Jefferson County was in a financial crisis as the commissioners faced a decision concerning whether the County should file for bankruptcy. The County was under an EPA mandate to update an outdated and overrunning sewer system. Estimates to do the work ranged from $250 million to $1.2 billion. The situation led to graft, corruption, bribery and illegal activities. More than 20 people were prosecuted in association with the illegal activities involved in financing and construction of the sewer system and four of the five commissioners were sentenced for their involvement in the corruption. Five new commissioners were elected and had to determine what to do after the down-grade of the County's bonds and warrants; the reduced revenues; and the corruption had put the County in a situation where funds were not available to continue to operate the County and provide services to its citizens. Should they declare bankruptcy or choose other paths open to them?

Data sources – this case is based on field research and interviews with a commissioner, court documents and from many other public sources. Extent of disguise – the case is not disguised.

The case can be used in graduate or upper division undergraduate courses in accounting, strategy, public administration or finance. There are several topics in the case that could be addressed: governance; economics, government and political issues, ethics, accounting, financial instruments, and strategy.

Financial Management.

Masters, Bachelors.

In 2011, Real Sound Lab (RSL), an innovative audio technology company headquartered in Latvia, issued a bond to finance its needs. The face value of the issue was much smaller than what was typically encountered in the local market. The case describes how Viesturs Sosars, Chief Executive Officer of RSL, made this financing decision and how the difficulties at maturity were overcome.

Learn about financing options available for an small- or medium-sized enterprise in the case of inability to issue additional equity combined with an already high debt ratio. Learn about important considerations that should be made when deciding on the details of the bond issue and how these might impact the possible actions of the issuing company in case of being unable to repay the principal at maturity.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Greenko, a renewable power generating company investing in biomass, small and medium hydro power and wind power projects, had projected to achieve 1GW (Giga Watt = 1000 Mega Watt) of installed capacity by March 2015. The company had been financing its projects with debt from Indian banks and financial institutions on a project finance basis and it had to now decide whether to refinance the project finance debt with an international bond issue of USD 550 million. The case provides an opportunity to discuss the public policy and financing aspects of renewable energy in India.

This paper aims to understand the subject of entrepreneurship and project management through techno-economic intervention.

Postgraduate students of management and graduate students of engineering and management.

Multiple challenges existed at the ground level in the Moradabad Brass Cluster in terms of gaps in technology, skill, infrastructure and market that all needed to be improved upon.

The objectives and learning outcomes were proposed to understand the cluster economic crisis, entrepreneurship, project management, technical improvements and better understanding of certain theories.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

The case describes the structure of Infrastructure Investment Trusts (InvITs) created and launched in Indian markets in 2017. Besides introducing InvITs and their potential role in relaxing the financing constraint created by the lack of an active corporate debt market in India, the case can help in analysing why the market is discounting the IndiGrid unit price relative to its issue price. It also offers an opportunity to value IndiGrid's Patran acquisition.