134009861 Ifm Gretz Tool Company

GRETZ TOOL COMPANY SUPPLEMENTAL
CASE SOLUTION
PREPARED BY
 Salau Abdul Malik Olarinoye

810115



Nurul Huda Binti Yahya

810572



Razlina Binti Romli

806340



Aliana Shazma Amir Binti Amir

813298



Nur Diyana Binti Zamro

812395

SUBMISSION DATE : 1 MARCH 2013

SOLUTION FOR QUESTION A
The way that could be taken by Citigroup in facilitating Gretz flow of funds are as follows:
 Loan

a.Short-term financing
Citigroup may act as a creditor to Gretz to provide short-term loans in any currency required by international money market.

b.Medium-term financing
Citigroup may also provide a medium-term loan to Gretz in any currency required by international credit market. In this kind of financing, Citigroup is again will act as a creditor to Gretz.

CONTINUE
The way that could be taken by Citigroup in facilitating Gretz flow of funds are as follows:

c.Long-term financing
Citigroup may help through placing the bonds issued by Getz into the international bond market. In this case, Citigroup no longer acting as a creditor but as an intermediary
 Foreign Exchange
Gretz able to obtain any required currency in the foreign exchange market by Citigroup.
 Investment
Citigroup may also help Gretz by placing new stocks issued in the foreign exchange market.

SOLUTION FOR QUESTION B
Some characteristic that might be considered by British subsidiary are:
i. Exchange rate risk this exchange rate risk represents the potential for the value of bonds to decline from the investor’s perspective. This can be applied to this case due to Gretz Tool Company has more than one subsidiaries and facing with this situation. ii. Credit risk this company need to consider against its potential for default, whereby interest or principal payments to investors are suspended temporarily or permanently.

iii. Interest

rate risk this can be seen for a long term interest rates for the company. The company in this case mentioned that it is operated in medium term. iv. Liquidity risk
this