Financial Management

Financial Management

Executive Summary

The case presented over here is about XX Chemicals, which is a chemical company that is looking to expand its operations acros the border. This report deals with the analysis and opportunity evaluation for XX chemicals. The company is a midsized organization, whose directors are planning to initiate a new project across the borders. However there are certain issues which the company has to deal with. In this report, we will be addressing those issues which are being faced by the management and Directors of the XX chemicals Co.

The company is facing issues in raising und, which have been dealt with in this report, apart from that, the company is also facing problems in their organic structure, where the management is looking to have separate treasury and finance department. An analysis on restructuring is also provided in the report.

Raising funds and Investments

The directors of the XX Chemical Co. are looking for different modes of financing in order to raise appropriate funds in order to run the project abroad. In order to do this, the management is looking for two major options, the first one being the right issue and the second one being the investment banking opportunities. In this section of the report, we will be discussing both these options in detail.

Right Issue

When we talk about right issue, this basically refers to the procedure of issuing rights to the existing shareholders of a particular company to buy, at a given discounted price, a number of additional securities of the company. This allows the firms to gain additional funds from it. Many companies use it as a source of short term finance. Now considering the case of XX Chemicals, they can use it as an option, however, the amount being generated from this cannot be ascertained as there are a number of factors which needs to be taken into consideration

Investment Bank

An investment bank encompasses the entire range of financial services designed for companies, public institutions and financial institutions. The activity of an investment bank is organized "umbrella" in two areas:

Corporate finance;

Banking business and investment, which in turn comprises six areas of activity.

A first distinction is that in the first macroarea the bank uses its own resources to provide services, as opposed to the activities contained in the second. A single institution may offer services related to both areas. The investment banking business is generally based on services, legal, tax and financial management and financial operations of greater magnitude, such as mergers and acquisitions, which are characterized by high fixed costs.

Areas of Practice

As anticipated, the business areas of an investment bank are seven, the first of which is a macro in its own right business financing, the other six are grouped under the category of investment banking (corporate and investment banking)

Financing companies

The corporate finance (corporate lending) refers to the activity of the bank loan. Lending activities of an investment bank are divided into:

trade finance (trade financing) to finance activities of import / export;

real estate financing (real estate financing);

loans to finance receivables and manage cash flows (cash management factoring & financing);

mortgages or loans of ...