ISBN 0-324-00307-2
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Length
This case is
16 pages in length.
Abstract
Ken Auerbach was nervous in the spring of 1987 when he pushed into the office of John Phillipo, treasurer of Atlantic Oil Co., one of the smaller of the major international oil companies. Ken had joined Atlantic as a financial analyst just two years before upon graduating from NYU's Graduate School of Business Administration. He had been assigned to the treasury department a year ago where he was one of seven analysts that Phillipo relied upon to handle the details of various projects that he was directing. Ken was now working with Phillipo on the largest financing program the company had ever undertaken.
Atlantic was enjoying a surplus cash flow as a result of curtailed exploration and development expenditures resulting from the decline in oil prices over the past two years. The company, therefore, had not needed any new money, but Phillipo and his boss, Lionel Crawford, Atlantic's chief financial officer, both felt that Atlantic should build up its financial reserves during the period of weak oil prices and open up new resources of finance for future requirements. These might include purchases of existing production or downstream facilities from other oil companies, or simply be a source of additional liquidity to the company.
Study Questions
- Prepare a two-page paper stating (a) what the most important things to be considered by Atlantic are in selecting an investment banker to assist the company with its financing plan, or (b) what the main points are that should be made by either Salomon, CSFB, or Warburg in their presentations.
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