Buenos Aires Embotelladora S.A. (BAESA): South American Restructuring Harvard Case Solution & Analysis

In 1998 BAESA, PepsiCo's largest bottler and distributor outside of North America, are facing serious financial difficulties and was forced to restructure its debts and business operations to avoid bankruptcy or liquidation. Based in Argentina, with operations throughout South America, the company had over the years spectacular success story, and the media darling, until he made the ill-fated expansion in Brazil.

The company's debt was owed to banks and financial institutions in South America, Asia, Europe and the United States. In addition, the company has $ 60 million in publicly traded bonds, many of them owned by U.S. investors. Restructuring was the largest and most complex of its kind ever undertaken in South America. In addition to the negotiations with bankers and making a public offer of exchange for their bonds, the company made a massive common rights offering of shares to its shareholders, giving them the opportunity to buy new shares in the company. It also considered the submission of "prepackaged" Chapter 11 bankruptcy in the U.S. to put pressure on U.S. bond holders to go along with the plan. Negotiations have been greatly complicated by differences in bankruptcy laws of Argentina, Brazil and the United States. "Hide
by Stuart C. Gilson, Gustavo A. Herrero Source: Harvard Business School 26 pages. Publication Date: September 17, 2001. Prod. #: 202009-PDF-ENG

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Buenos Aires Embotelladora S.A. (BAESA): South American Restructuring

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