Prada Case Essay

From the financial point of view, the Italian luxury brand- Prada, which was known for its design innovation, cant claim itself successful. Although it has the cleverness to keep its revenue over 1.5 billion euros for three consecutive years, it in any case contains more than 1 billion euros of debt maturing within 12 months sitting on its match sheet. One of the best solutions for Prada to solve this problem is to raise upper-case letter in the stock commercialize, which we could refer as initial offering. Given the current market conditions, listing in Hong Kong might appears to be the best choice aft(prenominal) all. But, before we go further in details well-nigh the pros and cons about listing in Hong Kong, we should first discuss the reasons why we choose IPO over Debt and Strategic partnership.Compare to issuing debt, an IPO will not add any more burden to the companys balance sheet, which for Prada, was already showed a sign of insolvency and over leveraged. Another issu e is that no firms in this industry have ever raised money in US bond market. Although dim sum bond a Chinese Yuan denominated bonds issued in Hong Kong could be the best alternative to this situation, however, the short lifespan and the exchange risk it involved are its most disadvantages.How about barter some portion of the firm to the private equity firms to raise slap-up? For this deal, it seems that they will not only offer a sizeable pension to the family, but also to offer some important positions on the wag too. But, compare to IPO, it will not increase Pradas publicity through with(predicate) this method. And also, an IPO in Hong Kong will give the company more hazard to expand their Asia market, especially in China and Japan. Choosing a Strategic compact would be just like giving that huge potential boodle away. So, the next question is how do we actually apply the IPO outline?