Wiphold (C): Managing The 2002 Crisis Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

IMD-1-0222 © 2005
Leleux, Benoit F.; Ogunsulire, Mope; El-Agamy, Hischam

Responding to market signals, and in an attempt to eliminate the reduction at which its shares traded on the stock exchange and to create value for shareholders, WIPHOLD decided to become an operational financial services business in 1999. It subsequently embarked on a three-year strategy to make this a reality. This decision would put it in direct competition with its institutional investors who were enormous financial services companies. Additionally, lacking capacity, WIPHOLD folks that are poached from some of these same institutions.

As 2002 drew to a close, WIPHOLD reviewed its challenges. How could it cope with fractious institutional investors who now owned the majority of WIPHOLD's shares --the women's shareholding having been considerably diluted after the private placement. The company believed it was the correct way to go, even though the institutions differed with its strategy of moving into operations. But its financial services company WIPcapital, the flagship of that strategy, had turned in a substandard early performance. And to crown it all, the shares of WIPHOLD continued to trade at a substantial discount to its net asset value. What could they do?

Wiphold D Back To Private Abridged Case Solution

Subjects: Entrepreneurship; Private equity; South Africa; Economic empowerment; Black economic empowerment; BEE; Postapartheid; Social entrepreneurship; Development finance; Special purpose vehicles
Settings: South Africa; Financial services; US$165 million; 1998-2002