The VTB debt would be in second position to the bank in the event of a bankruptcy. The couple was convinced they may be successful franchisees with both stores, but were concerned with the high projected rate of interest on the VTB offer.
While there was no penalty for early repayment (as in their bonded bank loan), the bank had offered very competitive rates. After assessing the financial consequences of Cloth Super Store's counter offer, it was clear that without an immediate and large increase in sales at both shops, the entrepreneurs would find themselves not able to operate the business due to the high lending costs. Although both parties were prompted to make a deal happen, some important roadblocks would have to be browsed to be able to actually get it done.
PUBLICATION DATE: July 27, 2011 PRODUCT #: W11178-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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