Details

Case

Educator Copy

Dewan Salman Fibre Limited (B)

Bashir A Khan, Tehmina Shah


INDUSTRY : Textile

AREA : Finance

ORGANIZATION : Dewan Salman Fibre Limited

LENGTH : 4

LUMS No : 02-575-97-1

PUBLICATION YEAR : 1997

DESCRIPTION

KEYWORDS:

Dewan Salman Fibre,Limited,Finance,Textile,Bond,Investment Bank,Proposal,Offer,Purchase Price


DESCRIPTION:

Dewan Salman Fibre Limited (DSFL) had issued Pakistan's first Euro-convertible bond worth US $45 million, in May 1994. The bonds were selling at a 40% discount in October 1996. An investment bank proposed that DSFL buy back its outstanding bonds from the market. The purchase price would be provided by the bank, in the form of a five rupee loan. Even though the bank was convinced that this would result in an increase in the company's net worth, the company had shown little interest in the bank's offer. Asma was assigned to present a comprehensive analysis, which would convince the company to accept the bank's proposal.


LEARNING OBJECTIVES:

N/A


SUBJECTS COVERED:

Finance