Equity Capital Raising: The SEO of Petrobras 2010 (A) Description
This two-part case series is about the largest equity-raising deal in history - the Petrobras seasoned equity offering (SEO) of 2010. In June 2010, Petrobras, Brazil's national oil company was preparing a share issue to develop its "pre-salt" oil fields - so called because they are trapped under several kilometers of seawater, rock and a hard-to-penetrate layer of salt. The hydrocarbons resting in the pre-salt fields could make Brazil one of the world's largest oil-exporting nations. Brazil's offshore pre-salt area - widely tipped to rival the North Sea in terms of size and importance - had been generating excitement in the energy world since its discovery in 2005. Six new pre-salt fields had been discovered more recently and were now ready for exploration. The investments outlined in the plan were huge and would transform Petrobras into one of the world's largest producers. However, this also posed significant financing challenges for Petrobras, given its capacity to generate cash from its current operations. So, how could it raise the money? A bond issue so soon after the previous one was a possibility. It would then be among the world's biggest bond issues. But there was a risk of not meeting the need for capital. How would such an issue affect its debt-to-value ratio and its rating? Would Petrobras be able to maintain its investment grade status? A share issue was another possibility, but it would also be very big. Would the market be ready for such a big issue so soon after the financial crisis? Many unresolved issues lay ahead. Both Gabrielli (CEO) and Barbassa (CFO) understood that regardless of the method used, they were facing one of the world's biggest funding challenges to date. A lot was at stake and wrong choices would have disastrous consequences for both Petrobras and Brazil.
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Case Analysis of Equity Capital Raising: The SEO of Petrobras 2010 (A)
Equity Capital Raising: The SEO of Petrobras 2010 (A) is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Equity Capital Raising: The SEO of Petrobras 2010 (A) is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Equity Capital Raising: The SEO of Petrobras 2010 (A) case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Equity Capital Raising: The SEO of Petrobras 2010 (A) will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.
Case Study Solutions Background Work
Equity Capital Raising: The SEO of Petrobras 2010 (A)
case study solution
is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Equity Capital Raising: The SEO of Petrobras 2010 (A), is to not only build a competitive position of the organization but also to sustain it over a period of time.
Strategic Management Tools Used in Case Study Solution
The Equity Capital Raising: The SEO of Petrobras 2010 (A) case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
Texas Business School Approach to Strategy & Execution Solutions
In the Texas Business School, Equity Capital Raising: The SEO of Petrobras 2010 (A) case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Equity Capital Raising: The SEO of Petrobras 2010 (A)
Step 1 – Problem Identification of Equity Capital Raising: The SEO of Petrobras 2010 (A) - Harvard Business School Case Study
The first step to solve HBR Equity Capital Raising: The SEO of Petrobras 2010 (A) case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Petrobras Salt is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Petrobras Salt, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.
Step 2 – External Environment Analysis
Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Equity Capital Raising: The SEO of Petrobras 2010 (A).
The external environment analysis of Equity Capital Raising: The SEO of Petrobras 2010 (A) will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.
What is PESTEL Analysis? Briefly Explained
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Equity Capital Raising: The SEO of Petrobras 2010 (A) case study. PESTEL analysis of " Equity Capital Raising: The SEO of Petrobras 2010 (A)" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?
As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Equity Capital Raising: The SEO of Petrobras 2010 (A) macro-environment and how it impacts the businesses of the firm.
How to do PESTEL Analysis for Equity Capital Raising: The SEO of Petrobras 2010 (A)
To do comprehensive PESTEL analysis of case study – Equity Capital Raising: The SEO of Petrobras 2010 (A) , we have researched numerous components under the six factors of PESTEL analysis.
Political Factors that Impact Equity Capital Raising: The SEO of Petrobras 2010 (A)
Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.
Policy Making Impact on Equity Capital Raising: The SEO of Petrobras 2010 (A)
Government policies have significant impact on the business environment of any country. The firm in “ Equity Capital Raising: The SEO of Petrobras 2010 (A) ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.
Data safety laws – The countries in which Petrobras Salt is operating, firms are required to store customer data within the premises of the country. Petrobras Salt needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.
Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Equity Capital Raising: The SEO of Petrobras 2010 (A) has numerous instances where the competition regulations aspects can be scrutinized.
Import restrictions on products – Before entering the new market, Petrobras Salt in case study Equity Capital Raising: The SEO of Petrobras 2010 (A)" should look into the import restrictions that may be present in the prospective market.
Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Petrobras Salt in case study “ Equity Capital Raising: The SEO of Petrobras 2010 (A) ” should look into these export restrictions policies.
Foreign Direct Investment Policies – Government policies favors local companies over international policies, Petrobras Salt in case study “ Equity Capital Raising: The SEO of Petrobras 2010 (A) ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.
Taxation & Regulation Impact on Equity Capital Raising: The SEO of Petrobras 2010 (A)
Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.
Tariffs – Chekout how much tariffs the firm needs to pay in the “ Equity Capital Raising: The SEO of Petrobras 2010 (A) ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Petrobras Salt can compete against other competitors.
Government Scheme & Subsidies Impact on Equity Capital Raising: The SEO of Petrobras 2010 (A)
Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Equity Capital Raising: The SEO of Petrobras 2010 (A) case study have to assess whether their business can benefit from such government assistance and subsidies.
Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.
Political System & Stability, and its Impact on Equity Capital Raising: The SEO of Petrobras 2010 (A)
Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.
Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.
Corruption level – Petrobras Salt needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.
Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.
Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.
Economic Factors that Impact Equity Capital Raising: The SEO of Petrobras 2010 (A)
Social Factors that Impact Equity Capital Raising: The SEO of Petrobras 2010 (A)
Technological Factors that Impact Equity Capital Raising: The SEO of Petrobras 2010 (A)
Environmental Factors that Impact Equity Capital Raising: The SEO of Petrobras 2010 (A)
Legal Factors that Impact Equity Capital Raising: The SEO of Petrobras 2010 (A)
Step 3 – Industry Specific Analysis
What is Porter Five Forces Analysis
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Equity Capital Raising: The SEO of Petrobras 2010 (A) case study. PESTEL analysis of " Equity Capital Raising: The SEO of Petrobras 2010 (A)" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
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