04-02-2013, 12:36 PM
The Refinancing of Shanghai General Motors ( A), in MD, pp.135-153.
1The Refinancing.ppt (Size: 434.5 KB / Downloads: 109)
Major issues of the Case
1 Joint ventures-how are organizational form and ownership decisions made within multinational firms and how do recent trends in international trade and finance impact these decisions?
2 SGM’s refinancing-how should Newman prioritize to his current financing? How can financing decisions interact with business risks?
3 Financial policy inside the firm-how should GM and multinationals make major financing decisions inside the firm?
4 Internal capital markets-Can the internal capital markets of multinational firms serve as a competitive advantage to these firms?
Keywords
China’s Household Savings rate, Difference between taxing one’s citizens and one’s residence, Inversion transactions, Joint ventures, Financing subsidiaries, Prioritizing goals, Consortium of Banks, Revolving credit, Expected revaluation vs opting for local currency credit.
Corporate inversion
When a corporation moves its headquarters to a low-tax nation or corporate haven while retaining its material operations in its higher-tax country of origin, this is termed to be a corporate inversion.
Corporate inversion is a form of tax avoidance.Corporate inversions as a tax-reduction maneuver have become a public policy issue, as substantial tax revenues are lost.
Vertical model defined
Based on specialization along with the value chain and intra-firm trade in components and assembly
Why vertical model?
Lower tariff and trade costs over the last several decades and a push for capital rationalization have resulted in a shift from the horizontal model to a vertical model of multinational activity.
Impact on joint ventures
What a shift toward a vertical model for MNC activities means for joint ventures?
What kinds of conflicts are likely to arise as you shift from a horizontal to vertical model?