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TOUAX is a French company and is currently Europe?s no

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TOUAX is a French company and is currently Europe?s no. 1 in shipping containers and river barges,
and no. 2 in modular building and freight railcars. The group provides operating leases to customers
around the world, both on its own account and for third-party investors. On June 24, 2009, TOUAX
announced that its capital increased by waiving preferential subscription rights but with priority for
existing shareholders, launched on 18 June 2009 for a total of E17, 851,519.76 (gross) through the
issue of 936,596 new shares which were subscribed in the entirely. Following partial application of
the extension clause, 952,747 shares were placed or 101.72% of the issue; total proceeds were E18,
159,357.82.
This rights issue has enabled the Group to strengthen its financial structure, to position itself with
advantage for possible acquisitions of tangible stock, and to grasp opportunities thrown up by the
crisis (purchase of shipping containers, modular buildings, river barges and railcars, for hiring out on
mainly long-term leases). 370,062 new shares allotted under absolute entitlement were subscribed
or 39.51% of the total number of new shares issue. Another 555,685 shares were applied for subject
to cutting back in the event of over subscription, and orders for these were all filled. Another 27,000
shares had been applied for by the general public, and following partial application of the extension
clause it proved possible to fill orders for all of these.
All the result of the right issue, TOUAX is well placed to respond to the boom in corporate
outsourcing of non-core assets, and every day provides over 5,000 customers with quick and flexible
leasing solutions. TOUAX is now listed on Euronext in Paris – NYSE Euronext Compartment C (ISIN
Code FR0000033003), and features in the SBF 250 Index.
Questions:
1 After analyzing the case, do you think all the companies that can afford, should opt for right issue
to improve their financial status?
2. What do you analyze as the two main advantages of the right issue?
Case let 2
In mid-February 1994, the British paper, the Sunday times ran on article that alleged that a 1 billion
sterling ($ 750 M) sale of equipment by British companies to Malaysia was secured only after bribes
had been paid to Malaysian government officials and after the British overseas development
administration (ODA) had agreed to approve a 234 million sterling grant to the Malaysian
government for a hydroelectric dam of (according to the Sunday times) dubious economic value. The
clear implication was that UK officials, in their enthusiasm to see British companies win a large
defence contract, had yield to pressures from “corrupt” Malaysian officials for bribes – both
personal and in the form of the 234 million sterling development grants.
What happened next took everyone by surprise. The Malaysian government promptly announced a
an on the impact of all British goods and services into Malaysia and demanded an apology from
British Government. Officially the ban applied only to government orders for British goods and
services; the private sector was free to busy as it chose. However, British companies with experience
in the region were nervous that the private sector would follow the government?s lead in shunning
British products. At Examination Paper of Finance Management
stake was as much as 4 billion sterling in British exports and construction activities in Malaysia and a
presence in one of the world?s fastest growing developing economies (Malaysia?s economic growth
has averaged 8% per annum since 1989). In announcing the ban, Malaysia?s Prime Minister, Dr
Mahathir Mohammad, noted that the British media portrays Malaysians as corrupt because “ They
are not British and not white”…And “we believe the foreign media must learn the fact that
developing countries, including a country led by brown Moslem, have the ability to manage their
own affairs successfully”.The British government responded by stating, it could not tell the British
press what and what not to publish, to which Dr Mahathir replied there would be “no contracts for
British press freedom to tell lies”. At the same time, the British government came under attack from
members of parliament in Britain, who suspected the government acted unethically and approved
the ODA hydroelectric grant to help British companies win orders in Malaysia.
Questions:
1. If you are the CEO of a British company that now faces the loss of a lucrative contract in Malaysia
because of the dispute. What action should you take?
2. How do you think British government should respond to the Malaysian action?