Foriegn sources of finance
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Foriegn sources of finance

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This MBA Finance PPT by Nilesh Patil

This MBA Finance PPT by Nilesh Patil

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  • Foreign Currency Convertible Bonds commonly referred to as FCCB's are a special category of bonds. FCCB's are issued in currencies different from the issuing company's domestic currency. Corporates issue FCCB's to raise money in foreign currencies. These bonds retain all features of a convertible bond making them very attractive to both the investors and the issuers.These bonds assume great importance for multi-nationals and in the current business scenario of globalisation where companies are constantly dealing in foreign currencies.FCCB's are quasi-debt instruments and tradable on the stock exchange. Investors are hedge-fund arbitrators or foreign nationals.FCCB's appear on the liabilities side of the issuing company's balance-sheetUnder IFRS provisions, a company must mark-to-market the amount of its outstanding bondsThe relevant provisions for FCCB accounting are International Accounting Standards: IAS 39, IAS 32 and IFRS 7An American depositary receipt (ADR) is a negotiable security that represents the underlying securities of a non-US company that trades in the US financial markets. Individual shares of the securities of the foreign company represented by an ADR are called American depositary shares (ADSs).The stock of many non-US companies trades on US stock exchanges through the use of ADRs. ADRs are denominated, and pay dividends, in US dollars, and may be traded like shares of stock of US-domiciled companies.Definition of 'Global Depositary Receipt - GDR'1. A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branchesRead more: http://www.investopedia.com/terms/g/gdr.asp#ixzz1nk8mVUQFThe first ADR was introduced by J.P. Morgan in 1927 for the British retailer Selfridges. There are currently four major commercial banks that provide depositary bank services: BNY Mellon, J.P. Morgan, Citi, and Deutsche Bank.
  • The deal, at last, is done. After weeks of uncertainty, Britain's Vodafone announced on February 11that it had decided to pay $11.1 billion in cash and assume $2 billion in debt to buy a 67% stake inHutchison Essar, one of India's largest mobile operators with more than 22 million subscribers.

Foriegn sources of finance Foriegn sources of finance Presentation Transcript

  • 2/29/2012 Foreign Sources Of Finance_FM_Team 3 1
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  • • External Borrowings• Foreign Funds2/29/2012 Foreign Sources Of Finance_FM_Team 3 3
  • • These include loans obtained at high rates of interest with long maturity period and commercial borrowings. The major sources of concessional loans have been the International Monetary Fund (IMF),Aid India Consortium (AIC), Asian Development Bank (ADB), World Bank(International Bank for Reconstruction and Development) and International Financial Corporation, US Exim Bank, the Japanese Exim Bank, Export Credit and Guarantee Corporation of U.K.2/29/2012 Foreign Sources Of Finance_FM_Team 3 4
  • • The foreign investments in our country are generally done in the form of foreign direct investment (FDI) or through foreign collaborations. The foreign direct investment usually refers to the subscription by the foreigners to shares and debentures of the Indian Companies. This is also known as portfolio investment and covers their subscription to ADRs, GDRs and FCCBs (Foreign Currency Convertible Bonds).2/29/2012 Foreign Sources Of Finance_FM_Team 3 5
  • • ADR (American depositary receipt).• GDR (Global depositary receipt).• FCCBs (Foreign Currency Convertible Bonds).2/29/2012 Foreign Sources Of Finance_FM_Team 3 6
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