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A large Mexican conglomerate, active in tourism, real estate, and steel, is faced with difficult macroeconomic conditions beginning with the Peso crisis of December 1994. The conglomerate had extensive dollar-indexed liabilities, and was caught in a crunch when the Mexian Peso lost half its value against the dollar in late 1994. Even though a large portion of its revenues were also dollar-indexed, thus ostensibly providing a foreign exchange hedge, most of the conglomerate's customers were Mexican nationals. With the ensuing recession in 1995, the revenue base dried up, but the dollar liabilities were still outstanding. The case covers the period from late 1994 to February 1995, and deals with the financial and operational decision that Sidek had to face at that time.