- Resources in Finance

DBS Bank
Training Department

Corporate Financial Restructuring:

  • fix the equity
  • fix the debt
  • fix the control
Day 1
Recapitalizing Asian Enterprises

Day 2
Reconfiguring and Designing Corporate Debt

Day 3
Financial Engineering and Restructuring Corporate Ownership

Day 4
Restructuring Corporate Ownership, continued

Day 5
Corporate Financial Restructuring: DBS Applications

Background Materials on Corporate Finance

Financial Restructuring in Asia: Issues and Opportunities

DBS Bank
Workshop on Corporate Financial Restructuring

Ian Giddy
New York University

Corporate restructuring: any substantial change in a company’s financial structure, or ownership or control, or business portfolio, designed to increase the value of the firm

Schedule and Case Study Assignments

Day 1
Recapitalizing Asian Enterprises
TimeTopic Remarks
8:30-10:15The changing environment for Asian business
10:30-12:00Concepts of corporate and financial restructuringDiscussion of Sammi Steel case
12:00-13:00Working lunchGroup discussion of Intralinks case
13:00-14:00Office time 
14:00-14:30Financing the "new economy"Discussion of Intralinks case
14:30-16:00Recapitalizing Asian corporations: what form of equity?Discussion of TPI restructuring, Siam Cement and Astra
16:00-17:00The Role of DBS Bank in Corporate Financial RestructiuringDiscussion Session with senior management
17:00-17:30Planning for live case studies

Case Study: Intralinks
Assignment: In 1999 Intralinks, a fast-growing "dot com" company based in New York's Silicon Alley, was seeking advice on the next stage of financing its growth. What do you recommend? 

Case Study: Photronics
Assignment: This global manufacturer of photomasks, with significant operations in Singapore, is seeking funds for expansion of its production facilities in Asia and Europe. One recommendation is that the funding be obtained through a debt issue. Does this make sense, given the company's stage in its corporate life cycle and its capacity for further leverage? 

Case Study: Thai Petrochemical Industry
Assignment: TPI, the heavily indebted Thai company, is under pressure to recapitalize. Having completed a restructuring of its debt, the company plans to reduce its debt/equity ratio to below 0.5 by the end of 2000. How could this be done? What method should it have used to ensure the company's long run survival? What can be learned from the way Siam Cement and Siam Commercial Bank have approached their refinancing? 

Case Study: Astra International
Assignment: What kind of financial restructuring is needed to make the company attractive to foreign equity investors, domestic and foreign? What kind of rate of return would such investors expect? 

Day 2
Reconfiguring and Designing Corporate Debt
TimeTopic Remarks
8:30-10The cost of equity and the cost of capitalDiscussion of Nokia 2000 case
10:00-12:00Financial restructuring in a constrained environmentGroup work on Nokia -- the Early Years case
12:00-13:00Working lunchNokia
13:00-14:00Office time 
14:00-15:00What kind of debt? What derivatives?Discussion of Nokia's debt, DBS Pens and Ciba
15:00-16:00Understanding economic exposureGroup work on Ban Pu case
16:00-17:00Reconfiguring debt in a constrained environmentDiscussion of Ban Pu's financing alternatives

Case Study: Nokia 2000
Assignment: Read the questions posed by Nokia's CFO, and consider the way in which they were answered.

Case Study: Nokia -- The Early Years and Exhibits (Acrobat file) 
Assignment: What form of financing should Nokia use to finance its $400 million US acquisition? 

Case Study: DBS Pens
Assignment: How do these securities deal with foreign ownership restrictions? 

Case Study: Exportadores Pesces de Concepcion (Acrobat file) 
Assignment: In what currency should Chile's salmon exporters finance their exports to Japan? Pesos? Yen? Dollars? Krone? 

Case Study: Financing Ciba and Exhibits (Acrobat file) 
Assignment: What is the recommended maturity, interest contract, and currency to finance Ciba's future investments? 

Case Study: Ban Pu Coal Company and Exhibits (Acrobat file) 
Assignment: What is the recommended maturity, interest contract, and currency to finance Ban Pu’s Mai Moh project and future expansion?

Day 3
Financial Engineering and Restructuring Corporate Ownership
TimeTopic Remarks
8:30-10:00When should a company issue quasi-equity or hybrid securities?Discussion of Deutsche Bank MTN
10:00-12:00Design of convertibles and warrant bondsGroup work and discussion of Ban Pu convertible bond
13:00-14:00Office time 
14:00-15:00What drives mergers, divestitures, management buy-outs and other forms of corporate ownership restructuring?Illustration: Kodak-Sterling Drug
15:00-16:00Valuing merger synergiesDiscussion of Feng-Shui Compass; Group work on Kelantan-Ipoh case
16:00-17:00Financing acquisitionsSpecial case: the LBO

Case Study: Ban Pu Convertible Bond
Assignment: How did this baht-denominated convertible bond work, and where did it fit in with Ban Pu’s recapitalization?  When should a company issue bonds (or arrange a term loan) with stock warrants? 

Case Study: 6 Battery Road
Assignment: What is the nature of the options given to the investor in this deal, and what are they worth? 

Case Study: The Acquisition of Feng-Shui Compass Company
Assignment: What was the maximum price that PT Fakawi should offer for Feng-Shui? 

Case Study: Ipoh-Kelantan
Assignment: Quantify the synergies and other effects of a merger between two Malaysian banks, and assess whether the shareholders of each bank will be better off, or worse off, after the merger. 

Day 4
Restructuring Corporate Ownership, continued
TimeTopic Remarks
8:30-9:30Extracting added value via ownership restructuringApplication to a company in an emerging market
9:30-12:00Valuation of a corporate acquisition targetGroup work on SinoPac-Taishin Merger
13:00-14:00Office time 
14:00-15:00Valuation of high-growth companiesReview and discussion of case
15:00-16:00Hostile and competitive acquisitionsDiscussion of YHS case and PCCW/SingTel/HKTel
16:00-17:00Preparation for live case studiesGroup work

Case Study: Ipoh-Kelantan (continued)
Assignment: You are advising Kelantan Bank on its proposed acquisition of Ipoh Bank. Value the two banks and advise on the acquisition price, the form of payment, and the financing. 

Case Study: Valuing (Acrobat file) 
Assignment: Do you agree with the valuation method used by the analysts? What are the alternatives? 
See also Atoms, Bits and Cash

Case Study: The Bid for Yeo Hiap Seng (Acrobat file) 
Assignment: A hostile acquisition in Singapore illustrates the key valuation issues in M&A in a competitive bidding context

Day 5
Corporate Financial Restructuring: DBS Applications
9:00-12:00Group work on live case studies
12:00-13:00Working Lunch
13:00-13:30Office time
13:30-14:30Group work on presentations
14:30-17:00Group presentations to senior management
Synopsis of the workshop

Background Materials
Financial Restructuring in Asia: Issues and Opportunities
Background Materials on Corporate Finance may be found at the following website:
Excel spreadsheets for Corporate Finance and Valuation may be found at:
A sample Excel spreadsheet for the valuation of a merged company may be found at:


Revised 1 September 2002 & 11/16/05
Ian Giddy