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Management Information Systems, Innovation Management, Strategic Management, Strategic Leadership, Organizational Development, Financial Management, Risk Management and Corporate Governance.

MBA.

Musoni Kenya is a Kenyan microfinance institution (MFI) whose idea was conceived in The Netherlands. The Musoni business model is ICT-enabled, 100 percent mobile based, virtually paperless, and runs on an ICT platform housed in Musoni BV in Amsterdam, The Netherlands. It is built on tested mobile technology that allows huge savings on transaction and operating costs. Using mobile payments, clients receive and perform bank operations anytime anywhere. This saves transport costs, transaction time and increases safety as no cash has to be carried around sometimes in dangerous areas. The mobile payments enable clients to make large improvements in loan officer efficiency and makes tracing payments seamless, saving on administration costs. The Musoni branches are also inexpensive as they are only used as the point of contact with customers hence reducing the cost of setting up operations even in remote areas. These efficiencies are passed on to clients in the form of lower interest rates and to stakeholders in the form of good returns on investments. The company aims to use this knowledge, experience and global ICT platform to expand to other countries with a suitable mobile payments environment.

The objective of this case is to illustrate general innovation concepts in a leading microfinance company in Kenya. The case documents the innovation dilemma facing the management of the fledgling microfinance company in determining the pace of innovation and the feasibility of launching of a similar service in Uganda following the successful establishment and growth of the company in Kenya.

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

A buyer company has an advance payment stuck with the seller company and acts cautiously in not paying further till they get control over the goods. Claiming this to be a breach, the seller terminates the contract and makes claim for the damages. The seller picks all legal points it could in the routine business practices to escape the unfortunate situation. The judgment in the Toba Trade Case gives a comprehensive view of several legal themes including, payment and delivery, variation of contract, termination, anticipatory breach, award of damages and unjust enrichment.

The case illustrates the sequence of events that played out between the customer and his interaction with a Bank from which he availed a credit card and a loan. The failure of service deliverables and deficiencies in the processes of the bank resulted in default of the loan amount and inconvenienced the customer. In the case, the focus on the customer helps in understanding that organizations need to initiate responses for customer satisfaction at their interface points, as expected by its customers. The case is suitable for use in courses on ‘Services Marketing’ for Post Graduate courses and Management Development Programmes.

In February 2015, Suzlon had just completed its financial and asset restructuring, following financial default after rapid growth through debt financed acquisitions in the financial boom ending in 2008. The restructuring resulted in a significant decrease in the promoter's equity stake. Suzlon now has to decide how to respond to an offer by the DilipSanghvi Group, promoters of Sun Pharma, to acquire a large equity stake in Suzlon for Rs. 1,800 crore. If Suzlon were to accept the offer then both the existing promoters and the DilipSanghvigroup would have the same stake of about 22% each. The case will help students examine the need to align financing and business strategy on the same plane. It will also help them understand details about restructuring of financial and business strategy in the face of financial distress.

The case aims to understand and analyse the capital structure decisions made by a profit-making, growing organisation which aimed to be India’s premier airline and the market leader. The company that had pursued a high debt policy, to take advantage of the financial leverage that it would get, was now facing problems in an operating environment that proved to be challenging. A decline in operating profit, coupled with high-interest costs and an uncertain environment with cutthroat competition, had caused the company to plunge into losses. Attempts to deleverage by equity infusion were proving to be difficult. The case can be used in MBA, Executive Education and doctoral programmes. The learning objectives of this case are: to analyse the capital structure of the company, to interpret the relationship between financial leverage and risk, to assess the pecking order theory, to analyse the nuances of the aviation sector and the factors influencing the profitability of the companies in the aviation industry, to estimate the risks and the rewards associated with foreign currency loans, to evaluate the magnifying impact of the financial leverage and to propose deleveraging methods like sale and leaseback, debt conversion to equity and devise a revival strategy for the company.

The case discusses the dilemma faced by Naresh Goyal, promoter and chairman of Jet Airways (India) Limited. At the initial stage, Jet Airways, like many other companies in its growth phase, relied on borrowed funds to meet its investment needs. However, over-reliance on borrowed funds with just one equity infusion resulted in a high leverage ratio and an aggressive capital structure. Moreover, the company operated in a sector that was highly regulated, with competition that was cutthroat and a cost structure that was volatile. A high operating risk, coupled with high financial leverage, pushed the company into incurring losses. Having run out of cash, Jet Airways eventually defaulted on loan repayments to its lenders. Facing the eventuality of losing control of the company to lenders or to a strategic investor, Goyal was trying to figure out a way to save the company from insolvency and liquidation. It was becoming increasingly difficult for Goyal to keep Jet Airways, the company he had nurtured like a baby, airborne.

The case can be taught in both online and offline modes of delivery in a 90-minute session. Post-covid, the delivery mode of classes has changed. In online sessions, it may be a challenging task to ensure student participation.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

The case provides an opportunity to the students to learn some of the analytical processes in making a credit decision, including interpretation of financial ratios for credit analysis, forecasting a stress scenario, analysing cash flow adequacy, assessment of financial flexibility and, finally, recommend a credit decision.

The case discusses the analytical challenges facing a bank credit officer while assessing the credit quality of Kwality Ltd., an India-based dairy product manufacturer. Kwality Ltd. had undertaken a significant capacity expansion and business transformation to strengthen its market position in value-added dairy products business and improve its profit margins. The capacity expansion had recently been completed and the management, credit rating agency, equity analysts and investors appear to be optimistic regarding the company’s prospects. However, the capital investment had been almost entirely debt-funded and large long-term debt repayments would have become due shortly. The company had also built up large trade receivables. The banker had to assess if Kwality would be in a position to repay its debt and should his bank increase working capital disbursement to the company.

Complexity: Academic level. Applicability: MBA, Executive MBA.

Teaching Notes are available for educators only.

CSS1: Accounting and Finance.

Arvind Mills incurred a loss of Rs.316 crores in the year 1999-2000 after a period of declining profits in spite of increasing sales. In January 2001 lenders to Arvind Mills received the Information Memorandum on Debt Restructuring which offered several alternative schemes. They had to decide whether they should accept the proposal and if they accept which specific scheme they should choose.

With the development of inclusive financial business in China in recent years, this case describes the credit risk control of “mobile credit”, a smart online credit platform launched by Shanghai Mobanker Co. Ltd. (referred to as “Mobanker”, previously named as “Shanghai Mobanker Financial Information Service Co., Ltd.”) which provides technical services for inclusive finance industry.

Through this case, the students will be able: to study how developments in the external environment impact businesses, in general, and banking sector, in particular, banks/banking, environmental management, financing/borrowing, government, political business risk and politics; to identify the politico-legal constituents of the external environment which significantly influence businesses; and to analyse the pros and cons of loan-waivers as a policy decision on various stakeholders including banks, borrowers, governments as well as the larger society.

The case is symptomatic of the dilemmas faced by the Indian bank employees, in charge of loan-disbursals, torn between seemingly contradictory demands from their top management and the governments.

The case is meant to be used in the course on “Business Environment” both at the UG and PG levels. It can be used along with the module on “External Environment and its Constituents” to augment students’ understanding of the “Impact of Political Environment on Business.” The case can also enrich the class discussion on the PEST (politico-legal/economic/socio-cultural/technological) framework for analysing the forces in the external environment acting upon a business.

Teaching notes are available for educators only.

CSS 4: Environmental Management.

This case examines issues surrounding the choice of financing arrangements for the acquisition of Radiologix in July 2006. The case follows Mark Stolper, the CFO of RadNet, as he considers how to raise the $363 million in funds necessary to finance the acquisition. When completed, the combined firms will be the largest private diagnostic-imaging provider in the United States. When Stolper joined RadNet in 2003, he confronted a company with “too much debt, and the wrong kind of debt.” His goal is to finance the acquisition in a way that further enhances the financial strength and operating flexibility of the company. Given the large size of funding required, the firm is unlikely to be able to fund the entire transaction with first-lien or bank debt. His financial advisors differ in their recommendations for how to raise the remaining funds—one suggests using second-lien debt, and the other, high-yield debt.

The purpose of the case is to familiarize students with frequently encountered types of debt financing that are used to finance mergers and acquisitions and other corporate transactions. The case provides information on the distinctions among first-lien, second-lien, and high-yield debt in relation to their price, availability, flexibility of covenants, repayment ease, and composition of likely investors. The case is designed for use in courses that cover corporate financing, M&As, and debt financing.