In month of May 2011, Hoang Anh Gia Lai (HAG), a chief real estate corporation in Vietnam, was about to question US$90 million of 9.875 senior notes (a debt instrument) in Singapore, payable in 2016. The company projected the net earnings from this offering, successive to withhold underwriting discounts, commissions and other probable expenses, to be roughly US$80.7 million.
From the viewpoint of an analyst at a brokerage firm who was scrutinizing HAG, there were numerous questions interrelated to interest emanating from the note issue. These incorporated the cost of the debt and the reason why HAG chose to elevate the money in Singapore, and not in Vietnam. What was the cost at which HAG was borrowing through the Singapore note problem?
Was the HAG’s benchmark of borrowing, subsequent to the note issuance, exceeding the ideal amount? How would the risk to the equity of HAG be affected as an outcome of the issue? Would HAG's stock price diminish? The brokerage firm analyst necessary to determine if her firm should offload its equity holding in its company. Sundaravaradhan Venkatesh is associated with Development Inc. and associated Learning.
PUBLICATION DATE: September 09, 2013 PRODUCT #: W13368-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Mistura Beauty Solutions
Business Valuation in Mergers and Acquisitions
Note on Accounting for Intangible Assets
Capital Assets Pricing Model
Integrated Reporting in South Africa
The Naini-Itarsi Railway Electrification Project
Newfield Energy
Target Corporation
Shady Trial
Societe International de Plantations et de Finance (SIPEF)
