In this case analysis I will first show the requirements the company had for its financing. Then I will provide an analysis of the main pros and cons for Chase in connection with the deal. Lastly I will show how both affected the pricing as well as the execution of the deal. In order to build the new Disneyland in Hong Kong a new non-recourse entity, Hong Kong International Theme Parks Ltd (HKITP) was formed. While the owners supported the project with substantial amounts of equity (Disney and Government) as well as with subordinated debt (Government), Disney had significant requirements for the financing portion of the remaining needed amount. Disney was looking to receive bank financing for this new entity of HKD 2.3bn as a Delay Draw Term Loan (“DDTL”) plus HKD 1.0bn working capital line (“Revolving Credit Facility” or “RCL”). While they had learned from their most recent experience with Disneyland in Paris not to have a too aggressive capital structure in place, they nevertheless demanded significant flexibility with regard to the following terms and conditions: - 15 year tenor - delayed amortization structure which would start as late as 3 years after the opening of the park, i.e. 8 years after closing of the loan and 6 years after funding of the loan - allowed CAPEX for further expansion (instead of using FCF for amortization) - full underwriting of the deal by up to 3 Lead Arrangers - no subordination of management and royalties - main collateral for the deal (land) would only become gradually available as the government first needed to reclaim the land Not only did Disney remain conservative with regard to the overall capital structure (see Exhibit 5 in case) but they also chose to access the markets in 2000 in order to ensure access to funds at attractive pricing despite having to pay commitment fees during the first two years when the DDTL was undrawn. From Chase’s perspective this prospective deal was interesting for the following reasons. First of all becoming a lead arranger for a syndicated credit facility always provides a revenue opportunity for the bank. Furthermore, the new entity had a solid capital structure with 40% equity and also 43.3% subordinated debt provided by the government. This meant that the new bank debt would be the most senior piece in and would only make up 16.7% of the capital structure. Thus, the credit risk for any credit commitment was not too high (at least when compared to other project finance deals). Another major factor was that one of the owners
The Walt Disney Company has been one of the highest producing conglomerates in the media since the 1920’s. The business all started when Walt Disney created the first character Mickey Mouse along with other characters. Since then, it’s been a growing business worldwide becoming one of the top media conglomerate. Disney has created cartoons, movies, radio shows, tv shows, theme parks and broadway shows. The company has evolved over many years even after the death of Walt Disney, it still continued to be a world wide phenomenon in the media. After Walt Disney’s death, Michael Eisner took over the The Walt Disney Company by starting to partner with other companies such as Pixar Animation in the mid 1980’s. Shortly after partnering with Pixar,
[1] Information was mainly taken from the Harvard Business Case Study “The Walt Disney Company: The Entertainment King”
The company is working on developing Avatar Land and bringing Star Wars and Frozen attractions into its theme parks. The visitors in their U.S. theme parks increased from 70 million in 2009 to over 90 million in 2016. Once Disney, builds these attractions they will potentially see an increase in visitors at theme parks and an increase in revenue. Disney is coming out with “blockbuster” movies like Star Wars: The Last Jedi, A Wrinkle in Time, Black Panther, Incredibles 2, and Avengers: Infinity War coming out next year or next month. And there are more in the future that us people don’t even know about that will also potentially be “blockbusters” as well. Based on Disney’s reputation and fan support, the risk of investing in Disney is a medium one. Disney's primary risk (a risk that is largely outside of its own control) comes from the changing way people are watching TV and other media. The presence of subscription video streaming services in today’s world, that has a large population of middle class civilians, has led to consumers increasingly downgrading or getting rid of their large cable packages Resulting in a steady decline over the last few years in the number of subscribers to the company's cable
Until 1992, the Walt Disney Company had experienced nothing short of success in the theme park business. Having successfully opened parks in California, Florida and Tokyo, it only seemed logical to open one in Europe. When word of this got out, officials from many European countries offered Disney pleas and cash indictments to work the Disney magic in their hometown. In the end only one city was chosen and it was Paris, France. That was the first of many decisions that led to a very unsuccessful opening of EuroDisney. Many factors contributed to EuroDisney's poor performance during its first few year of operation and many of these factors could have been alleviated if the proper factors would have been looked at previously.
- An investment period may take up to 36 months from the start of a project.
In this negotiation, JP played the role of an acquisitions consultant for Bluetronics, an enterprise software firm. His objective was to negotiate the acquisition of Vaultcorp, a small technology firm, and obtain the best deal for Bluetronics. In return, JP would receive compensation, which would be dependent upon his performance and points earned in the negotiation. There were 8 main issues that arose with the deal, for the full list of issues and corresponding points, see Appendix A. Each side of the negotiation had a BATNA of 2400 points, in the deal that was reached, JP received a point total of 6600, while Erika, representing Vaultcorp received a total of 3000 Points. This number is better than both of their BATNAs, representing a joint value of 9600, which is 4800 points greater than if they were to ‘split the issues down the middle’.
It is a situation where both parties will have benefits. Dubai Disneyland should cooperate with local organizations to help in supplying recreational facilities or transportations in exchange, Dubai Disneyland will allow them to promote their businesses in Disney.
And now, nearly four decades after his death, the maker of said creations, Walt Disney, is not nearly as recognized as he should be. Not only are his works and other projects intriguing, his morals and techniques personally behind them are as well. And yet they weren’t just his morals, they were shared by the country’s people who so desired an example of good principles. Perhaps the most significant scheme of all was his creation of his very own amusement park in 1955, Disneyland, located in Anaheim, California.
The merger amongst Disney and Pixar was an extremely effective one. They cooperated in the past, and their agreement was pursuing out the arrival of Cars. This was the ideal open door and sensible move for these two organizations to consolidate. The merger would permit the organizations to cooperate helpfully. This merger was extremely remunerating permitting the organization to put out exceptionally effective films, for example, WALL-E, and Bolt. They both have exclusive requirements including plans for twice-yearly movies. This was impractical before the merger. Disney has possessed the capacity to give Pixar a support in the field of promoting, showcasing attachments, and marketing. Disney is the best in the business with regards to advertising to kids. Disney burned through $8 billion to gain Pixar from Apple's head Steve Jobs. The procedure behind this merger is to keep making creative stories, characters, and movies that satisfy viewers around the world. The obtaining enhanced Disney's liveliness which helps animates its development all through its organizations. This was an extremely keen key arrangement that will advantage its amusement parks, shop items, and link. Disney additionally acquired responsibility for world's most acclaimed PC activity studio and its assets. They likewise have a more individual association with Apple's innovation in view of Steve Jobs owning Pixar. (Monica,
Since it is the own money, there’s enough flexibility to use the funds according to the needs of the firms. The added advantage about this is, it does not have any interference of outsiders in the firm’s affairs, which usually happens in the case of external finance. There’s no control or pressure from the foreigners.
... overseas securities and written off an amortization of goodwill belong to its subsidiaries. In consequences of plunge in bank equity and rapid growth amount of risk weighted assets, the bank Tier 1 capital ratio fell from 8.11% in end-2006 to barely 6.02% in end-2008. With the new strategy ‘back to track on retail banking’ and the liquidation of bad assets, the bank has met its Tier 1 capital target of 7.76% in end-2010.
Just two years before that the company did reported for a current ratio of 1.6, which is higher than 1.5 in from the year before. This improvement was cause by an overall development of a higher growth in the company’s current assets than in its current liabilities. In the year before in 2012, the company’s total current assets were at a price of $502 trillion, indicating an increase of 16.44 % overall from the $402 trillion current assets in 2010. Its total current liabilities have increased to $319 trillion, from $944 trillion in the year even before (2010), which shows a large growth in the company in a few years. Cash from operating actions also plays a big role in the company’s liquidity. In 2011, the company reported total cash of $917 trillion from its operating activities. Strong liquidity not only ensures the financial stability of the company in the market but also having approach its short-term company potentials (Global Data,
What is capital structure? Capital structure describes the specific mixture of long-term debt and equity the firm uses to finance its operation and growth. The risk and value of the firm will be affected by this mixture. Hence, it is often a challenging task for the finance managers to determine the optimal capital structure. An error free decision is critical to avoid an incorrect financing decision (Eriotis, Vasilou & Neokosmidi, 2007) and different levels of debt and equity used in capital structure suggest that managers may employ firm-specific strategies for improved performance (Gleason, Mathur, & Mathur, 2000).
“Here you leave today and enter the world of yesterday, tomorrow, and fantasy,” I read as I passed through the gates of what seemed to me, at the time, a place full of deception, corruption and lost dreams. Little did I know, the place would become a staple in my life when I needed to restore my sense of feeling perfectly content. When I visited Disneyland in 2011, ten years after my first visit, all my prejudices of a brainwashing corporation faded away. Instead, I realized this very place was full of enough dreams and magic to lift a brooding teen from a temper tantrum into a state of contentment. Disneyland had the power to restore the stolen innocence of the young and the frail.
A Company’s policy generally is to have different types of investors for their securities. Therefore, a capital structure should give enough choice to all kind of investors to invest. Usually bold and adventurous investors go for equity shares and loans & debentures are often raised keeping into mind conscious