Pak Arab Refinery Limited (PARCO) – Management of Circular Debt Harvard Case Solution & Analysis

The case describes how a very large internal corporate debt has been built in Pakistan, between the private and public sector energy and power generating companies, which were among the largest organizations in the country. Unexpected slowdown in recovery account established debt affected corporate business operations, and the Pakistani economy. Energy and power sectors discussed, as well as the reasons for this circular debt. Government of Pakistan has been actively involved in the regulation of energy and power engineering, in 2008, in response to the high price of oil subsidy was provided to keep the prices low on diesel. The government, however, did not create an effective plan to restore the funds, and for large public sector enterprises (PSEs) such as Pakistan International Airlines (PIA) did not pay their bills, no action was taken. The focus of this case, the solution is very large amount of debt that has accumulated in the various energy companies. Secondary analysis can investigate the effects of regulation on the activities of oil companies. "Hide
on Muntazar B. Ahmed Source: Richard Ivey School of Business Foundation 22 pages. Publication Date: July 5, 2011. Prod. #: W11285-PDF-ENG

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