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IC3 - Corporate Finance - Photocopiable7

Meon Capital Management agreed to provide a bridging loan to a company to help finance the acquisition of a competitor before the new year. However, Meon Capital mistakenly sent the funds to the wrong bank less than a week before Christmas. The bank was slow to return the funds, causing delays that threatened to prevent completing the deal before the deadline. On New Year's Eve, the writer took his family to the bank to wait for the money to arrive just before the payment deadline, allowing them to complete the transaction and save the deal.

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Оля Игнатенко
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58 views1 page

IC3 - Corporate Finance - Photocopiable7

Meon Capital Management agreed to provide a bridging loan to a company to help finance the acquisition of a competitor before the new year. However, Meon Capital mistakenly sent the funds to the wrong bank less than a week before Christmas. The bank was slow to return the funds, causing delays that threatened to prevent completing the deal before the deadline. On New Year's Eve, the writer took his family to the bank to wait for the money to arrive just before the payment deadline, allowing them to complete the transaction and save the deal.

Uploaded by

Оля Игнатенко
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

CORPORATE FINANCE

07 Financial services and advice


1 What problems can occur with bank transactions? Work with a partner and make a list.
2 Read the story and complete it with the words in the box.
capital complete deadline deal finance funds loan requirement transaction

A New Year to Remember


“My company decided to buy one of our smaller competitors. The negotiations were
completed fairly late in the year, and the CEO who was selling the company had made it
a key (a) of the deal that the transaction should be completed before the New
Year. We planned to (b) part of the acquisition by issuing shares in the spring.
As a result, we needed a bridging loan to cover part of the cost of the acquisition and
to provide working (c) until we could raise money through the share issue. Our
finance partners, Meon Capital Management, agreed to give us this (d) , and we
aimed to complete the (e) a few days before Christmas, so that we could all go
off for the holiday.
Meon Capital sent the (f) , but, unfortunately, they sent them to the wrong
bank. This was less than a week before Christmas. When mistakes like this are made,
it takes time to recover the funds. On this occasion, the bank was particularly slow in
returning the money and Meon Capital’s bank didn’t receive it until after Christmas Day.
Meon Capital immediately re-sent it to the correct bank, but we were running out of time
to (g) the deal before the New Year.
Trying to keep the deal on course meant that my Christmas break disappeared and my
family weren’t very happy! I spent all my time getting updates from the banks, briefing
both sets of lawyers, reassuring the sellers and keeping our own company’s board as calm
as possible – most of this on an hourly basis (my CEO still went skiing). As the
(h) approached, I realized that a radical solution was needed. On New Year’s
Eve, I took my family to the bank, and we sat there and waited for the money to arrive. It
arrived at 15:40. I had ensured that the bank had already set the transfer up in their
system, and so it was cleared just before the payment gateway closed at 16:00. I then
called all parties to confirm the transfer of the funds, took my family to the lawyers to
confirm completion, and then headed off for a well-earned evening’s celebrations. The deal
is still a family legend.”

3 Read the story again and answer the questions.


a Who made the mistake?
b Who was slow to act?
c Who didn’t let the situation affect his plans?
d Who wanted the deal completed by a certain time?
e Who was rather unhappy about what happened, and why?

4 With a partner, discuss whether anything like this has ever happened to you. If you were the writer of
the story, would you have done anything different?

PHOTOCOPIABLE
In Company 3.0 ESP Corporate Finance © Macmillan Publishers Limited 2017 WORKSHEET

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