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Jaguar Land Rover Automotive plc, a wholly owned subsidiary of the Indian company Tata Motors Limited, announced bond issue worth US$500 million. The proceeds of this issue were to be used to refinance costlier outstanding bonds. The company was able to raise new debt at substantially lower interest rates than its outstanding debt as a result of its sustained good performance, which led to strong company fundamentals and improved credit ratings. Students will analyze the various motivations for such a financial strategy, whether it will lead to cost savings or cash flow savings and, if so, the extent of the savings.

Jaguar Land Rover Automotive plc, a wholly owned subsidiary of the Indian company Tata Motors Limited, announced bond issue worth US$500 million. The proceeds of this issue were to be used to refinance costlier outstanding bonds. The company was able to raise new debt at substantially lower interest rates than its outstanding debt as a result of its sustained good performance, which led to strong company fundamentals and improved credit ratings. Students will analyze the various motivations for such a financial strategy, whether it will lead to cost savings or cash flow savings and, if so, the extent of the savings.

Arun Kumar, founder and group chief executive officer of Strides Arcolab Limited - a first generation, Indian pharmaceutical company headquartered in Bengaluru - is preparing for a crucial meeting of the Board of Directors. The meeting was called to discuss the proposed dividend payout to the company's shareholders following the completion of a US$1.725 billion sale of its specialty division - Agila Specialties - to the U.S.-based pharmaceutical company Mylan Inc. Kumar proposed that Strides distribute all the free cash available from the sale - after the retirement of debt and internal payouts - in the form of dividends to its shareholders. Strides had already communicated its decision to retire debts and reduce its leverage.

Arun Kumar, founder and group chief executive officer of Strides Arcolab Limited - a first generation, Indian pharmaceutical company headquartered in Bengaluru - is preparing for a crucial meeting of the Board of Directors. The meeting was called to discuss the proposed dividend payout to the company's shareholders following the completion of a US$1.725 billion sale of its specialty division - Agila Specialties - to the U.S.-based pharmaceutical company Mylan Inc. Kumar proposed that Strides distribute all the free cash available from the sale - after the retirement of debt and internal payouts - in the form of dividends to its shareholders. Strides had already communicated its decision to retire debts and reduce its leverage.

Arun Kumar, founder and group chief executive officer of Strides Arcolab Limited — a first generation, Indian pharmaceutical company headquartered in Bengaluru — is preparing for a crucial meeting of the Board of Directors. The meeting was called to discuss the proposed dividend payout to the company’s shareholders following the completion of a US$1.725 billion sale of its specialty division — Agila Specialties — to the U.S.-based pharmaceutical company Mylan Inc. Kumar proposed that Strides distribute all the free cash available from the sale — after the retirement of debt and internal payouts — in the form of dividends to its shareholders. Strides had already communicated its decision to retire debts and reduce its leverage.

A Singapore-based financial services company, the second largest lender in Southeast Asia, offered to acquire a Hong Kong bank, the eighth largest lender in the country, for a premium price per share. Three months later, a multi-billion hedge fund firm based in the United States had accumulated close to 8 per cent of the Hong Kong bank’s shares. According to Hong Kong’s securities law, the Singapore-based financial institution would have to acquire 90 per cent of the Hong Kong bank’s shares to successfully take the bank private, and there were only 25 days left for the company to meet this requirement. The hedge fund firm’s unspoken message was clear: raise your bid price to buy our shares or we will keep the company public at your expense.

A Singapore-based financial services company, the second largest lender in Southeast Asia, offered to acquire a Hong Kong bank, the eighth largest lender in the country, for a premium price per share. Three months later, a multi-billion hedge fund firm based in the United States had accumulated close to 8 per cent of the Hong Kong bank's shares. According to Hong Kong's securities law, the Singapore-based financial institution would have to acquire 90 per cent of the Hong Kong bank's shares to successfully take the bank private, and there were only 25 days left for the company to meet this requirement. The hedge fund firm's unspoken message was clear: raise your bid price to buy our shares or we will keep the company public at your expense.

Following Greece’s failure to repay its loan to the International Monetary Fund, it is easy to claim that the Greeks should simply pay back borrowed money. But there is never a clear answer when asking who should be responsible for a nation’s unmanageable debt, and the question is far more complex when it involves a member of the eurozone. Greece lacks its own currency to devalue to gain economic relief, and the nation’s debt problem cannot be solved by issuing more debt with conditions that kill economic growth. Arguably there has never been a bailout designed to bail out the Greeks. The aid issued to date has been more about buying time to play “musical bondholders.” <br><br> When it comes to sovereign debt, few countries ever pay back principal in the international financial system today. Yet if the Greeks manage to set a precedent that other troubled E.U. countries try to follow, then the fallout could sink the euro and send the global economy into turmoil. Nevertheless, the risks to the global financial sector have been reduced following the bailout deal with the European Union. Investors need to understand that nobody knows what is going to happen, and yet market buying opportunities could arise. Ultimately, when thinking of Greece, it helps to take note of the fact that spending money you don’t have eventually comes back to haunt you.

Two engineers founded a start-up for the design and development of Internet of Things and wearable technology products. They received initial seed capital from family in lieu of equity shares. The company developed a product that could be used to search for misplaced items through the user’s phone. The product was expected to be ready for mass production in a week. However, in spite of potential huge demand, the company did not have funds for mass production because it used the seed capital on the design and development. The supplier would not produce unless the start-up paid up front. The technology start-up needed to analyze all the available options for funding mass production of its product and choose the most suitable one.

This case contains four vignettes that provide an introduction to the issues covered in the course, Private Equity Finance.

Argentina's default on its foreign currency denominated sovereign debt in 2001 had proved to be a never-ending nightmare. Now, in June 2014, 13 years after the default, the U.S. Supreme Court had confirmed a lower-court ruling which would now force Argentina to consider defaulting on its international debt obligations once again. But the story was a tangled one, which included investors in both the United States and Europe, international financial law, a battle between hedge funds and so-called vulture funds (funds which purchased distressed sovereign debt at extremely low prices and then pursued full repayment through litigation), and State of New York and European Union courts. Time was running out.

In mid-October 2007, the chief executive officer (CEO) of the TSX Group was contemplating his strategic options. In March 2009, a decade-long non-compete agreement between the TSX Group and the Montréal Exchange would expire. Under this agreement, the former had been the sole exchange for trading senior equities in Canada while the latter had the monopoly on exchange-traded derivative contracts. Afterwards, both exchanges would be able to compete directly in their respective businesses. The CEO believed a merger between the two Canadian exchanges made strategic sense, especially given the current merger wave globally, but his counterpart had rebuffed his advances. What was the best way to bring his rival to the bargaining table? Should the TSX Group make a hostile bid? How much of a premium for shares should be offered?

The Gilbert Lumber Co. is faced with a need for increased bank financing due to its rapid sales growth and low profitability. Students must determine the reasons for the rising bank borrowing, estimate the amount of borrowing needed, and assess the attractiveness of the loan to the bank. A rewritten version of an earlier case. Allows students to practice ratio analysis, financial forecasting, and evaluating financing alternatives.

In 2013, the long-delayed IPO of the Bangkok Mass Transit System Public Co. Ltd. (BTSC) took place, but in an unusually complex form. Instead of selling the shares of the company that owned the elevated railway concession, what was offered were investment units in Thailand's first publicly listed infrastructure mutual fund: the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF). Proceeds from the IPO were used to acquire from BTSC the rights to the net farebox revenue generated from the railway. The investment exposed investors not only to the operating risk of the railway but to other types such as political risk.

In 2013, the long-delayed IPO of the Bangkok Mass Transit System Public Co. Ltd. (BTSC) took place, but in an unusually complex form. Instead of selling the shares of the company that owned the elevated railway concession, what was offered were investment units in Thailand's first publicly listed infrastructure mutual fund: the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF). Proceeds from the IPO were used to acquire from BTSC the rights to the net farebox revenue generated from the railway. The investment exposed investors not only to the operating risk of the railway but to other types such as political risk.

The case discusses the public-private partnership to build the New Royal Adelaide Hospital (NRAH) (replacing the outdated Royal Adelaide Hospital) at a cost of A$1.7 billion in 2009. The 35-year concession was eventually awarded to a consortium, the South Australian Health Partnership (SAHP), and the government agreed to make an annual service payment to the consortium of A$397 million a year once the hospital was completed in 2016. Rising state debt in the wake of the global financial crisis led to protests by opposition politicians when the cost of the NRAH was said to have ballooned.

The case discusses the public-private partnership to build the New Royal Adelaide Hospital (NRAH) (replacing the outdated Royal Adelaide Hospital) at a cost of A$1.7 billion in 2009. The 35-year concession was eventually awarded to a consortium, the South Australian Health Partnership (SAHP), and the government agreed to make an annual service payment to the consortium of A$397 million a year once the hospital was completed in 2016. Rising state debt in the wake of the global financial crisis led to protests by opposition politicians when the cost of the NRAH was said to have ballooned.

Tele-Tichon Limited, a private company in India's telecom equipment manufacturing sector, was in deep financial trouble, after having experienced declining financial health for nearly 10 years. The company had made an attempt at corporate debt restructuring (CDR) six years earlier but its restructuring plan had not been approved. Now, with the company in deeper financial crisis and unable to service its mounting debt and interest burden, the chief executive officer and chief financial officer must weigh the various options for bringing their company back into the black.

Tele-Tichon Limited, a private company in India’s telecom equipment manufacturing sector, was in deep financial trouble, after having experienced declining financial health for nearly 10 years. The company had made an attempt at corporate debt restructuring (CDR) six years earlier but its restructuring plan had not been approved. Now, with the company in deeper financial crisis and unable to service its mounting debt and interest burden, the chief executive officer and chief financial officer must weigh the various options for bringing their company back into the black.

This case features San Francisco-based financial technology startup, LOYAL3. Founded in 2008, the company seeks to disrupt the capital markets and democratize access to those markets for retail investors. By the fall of 2014, LOYAL3 had three products. In the first, the Social IPO Platformâ„¢, LOYAL3 acted as co-manager of an issuing company's initial public offering (IPO), enabling individual investors to purchase IPO shares at the same price-and the same time-as institutional investors. The second product, the Social Stock Planâ„¢, allowed investors to purchase stock in publicly traded companies they liked. The third product, Stock Rewardsâ„¢, enabled companies to grant free stock to customers in lieu of promotional discounts or in recognition of brand loyalty. LOYAL3 CEO Barry Schneider viewed 2014 as a watershed year. The company had participated in 10 initial public offerings to date. In the case he contemplates the product roadmap going forward.