Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 2002-08-15
Length: 6 pages
Data source: Published sources
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Abstract
The new chief financial officer of Phoenix Holdings Inc, a global mining company with operation in 34 countries, is faced with a situation where he may have to put one of his subsidiaries into bankruptcy and write the subsidiary off. He needs to be sure that there is no additional value in keeping the subsidiary as the holding company is in the process of being sold and needs to achieve the best possible price for its shareholders. The short-term decision is that the holding company will need to inject a large amount of new capital into the subsidiary in order to keep it out of bankruptcy.
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Abstract
The new chief financial officer of Phoenix Holdings Inc, a global mining company with operation in 34 countries, is faced with a situation where he may have to put one of his subsidiaries into bankruptcy and write the subsidiary off. He needs to be sure that there is no additional value in keeping the subsidiary as the holding company is in the process of being sold and needs to achieve the best possible price for its shareholders. The short-term decision is that the holding company will need to inject a large amount of new capital into the subsidiary in order to keep it out of bankruptcy.