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Case
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Reference no. 395-089-1
Published by: London Business School
Published in: 1995
Length: 21 pages
Data source: Field research

Abstract

This is the second of two stand-alone cases (395-088-1 and 395-089-1) examining starting-up and financing issues. Three years on, the company is facing insolvency. Following a financing after the end of the (A) case, the company has built its database. The data sales, though, have been slow to take off, and the equity investors have decided that a trade sale is the best way to secure the company''s future. Meanwhile, a slump in the systems business has created a cash crisis. Mezzanine finance has been raised to bridge the situation during negotiations with a trade buyer. These have now collapsed, and all other options for financial support appear to have been exhausted. The case explores the relationship between the company and its various backers, and asks whether there are any options left for management now.
Location:
Industry:
Other setting(s):
1988-1991

About

Abstract

This is the second of two stand-alone cases (395-088-1 and 395-089-1) examining starting-up and financing issues. Three years on, the company is facing insolvency. Following a financing after the end of the (A) case, the company has built its database. The data sales, though, have been slow to take off, and the equity investors have decided that a trade sale is the best way to secure the company''s future. Meanwhile, a slump in the systems business has created a cash crisis. Mezzanine finance has been raised to bridge the situation during negotiations with a trade buyer. These have now collapsed, and all other options for financial support appear to have been exhausted. The case explores the relationship between the company and its various backers, and asks whether there are any options left for management now.

Settings

Location:
Industry:
Other setting(s):
1988-1991

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