This case represents the result on “The refinancing of Shanghai General Motors (A),” in which the CFO of General Motors’ joint venture in Shanghai will, Shanghai General Motors (SGM), to nearly $ 900 million of project financing raised it, to begin to refinance operations. The highest priority is to improve the conditions of the financing in terms of the cost and specific commitments. Several factors complicate the CFO target, including the presence of capital controls, the impending entry of China in th … Read more »

This case represents the result on “The refinancing of Shanghai General Motors (A),” in which the CFO of General Motors’ joint venture in Shanghai will, Shanghai General Motors (SGM), to nearly $ 900 million of project financing raised it, to begin to refinance operations. The highest priority is to improve the conditions of the financing in terms of the cost and specific commitments. Several factors complicate the CFO target, including the presence of capital controls, the impending entry of China into the World Trade Organization, the joint venture partner’s captive finance subsidiary, and the conflicting goals of the joint venture partners. The case shows how subsidiary financial institution decisions must balance concerns entity and parent level. It also shows how multinational financial decisions – including transfer pricing, repatriation and financing decisions – must be designed governance concerns, financial goals, and to absorb the potentially divergent interests of joint venture partners. The context of the ongoing operating and investment decisions, the Shanghai General Motors is committed dmeonstrates in its early growth of the “life cycle” of the subsidiary finances. The case also touches on elements from foreign governments attempts to capital markets to regulate the dynamics between national and international banks compete for lending opportunities for multinational companies, and as subsidiary management can achieve the most desirable financing terms.
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from
Mihir A. Desai,
Mark F. Veblen
Source: Harvard Business School
2 pages.
Release Date: 27 July 2003. Prod #: 204025-PDF-ENG
Refinancing of Shanghai General Motors (B) HBR case solution