Professional Documents
Culture Documents
• Secured debentures
• Naked debentures
• Redeemable debentures
• Perpetual debentures
• Convertible debentures
Term Loans
• Long term debt with a maturity of more
than one year.
• Obtained from banks & financial
institutions
• Mainly to finance company’s capital
expenditure
Venture Capital
• Early stage financing of new & young
enterprises.
• Features:
• Equity participation
• Long term investment
• Participation in management
Stages in venture capital financing
• Early stage financing
• Expansion financing
• Acquisition/buyout financing growth
Process of venture capital financing
• Deal origination
• Screening
• Evaluation (due diligence)
• Risk analysis
• Deal structuring
• Post-investment activity
• Exit plan
Method of venture financing
• Equity
• Conditional loan
• Income note
Lease Financing
• Lease is a contract between a lessor,the
owner of the asset & a lessee,the user of
the asset.
• Lease rental
• Up-fronted leases
• Back ended leases
Types of leases
• Operating lease
• Financial lease
• Sale & lease back
Financial restructuring
• Debt equity swaps
• A transaction in which a corporation exchanges
existing bonds (debt) for newly issued stock
(equity). For example, XYZ company can in
essence cancel a portion of their debt and
transfer the equivalent balance to equity. A debt-
equity swap can help a company that is in
financial trouble by canceling some of its
outstanding debt.
Mergers & acquisitions
• Two or more companies combine into one
company
• a merger happens when two firms, often
of about the same size, agree to go
forward as a single new company rather
than remain separately owned and
operated.
• Ex:Mittal Steel(25th June,2006) decided to
merge with Arcelor, with the new company
to be called Arcelor Mittal.
• In practice, however, actual mergers of
equals don't happen very often.
• one company will buy another and, as part
of the deal's terms, simply allow the
acquired firm to proclaim that the action is
a merger of equals,
Forms of merger
• Horizontal merger
• Vertical Merger
• Conglomerate merger
Acquisition
• When one company takes over another
and clearly established itself as the new
owner, the purchase is called an
acquisition.
• Ex: Tata-Corus acquisition
Leverage buy outs
• Acquisition of a company in which the
acquisition is substantially financed
through debt.