Case Studies

Kenedix, Inc. (Kenedix) was a Japanese financial institution that managed real-estate funds. Recent turbulence in the economy and market had impacted the company adversely. In light of Kenedix’s medium- and long-term goals, its president and chief executive officer (CEO) was meeting in March 2020 with the company’s management to come up with a viable plan to address these challenges. Over the past several years, Kenedix had worked to shift its business toward an asset-light model and had introduced innovative solutions such as crowdfunding. The CEO believed that more could be done to leverage emerging technologies into the company’s core business of real-estate fund management. He and his team needed to consider whether adopting blockchain technology in finance, or real-estate tokenization, would enable the company to thrive in a saturated real-estate equity market. Could tokenization act not only as a solution to the company’s current plight but as a strategic competency for the future? For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

This case follows the Republic of Indonesia as it considered issuing its first blue bond to support its sustainable marine initiatives. The case puts students in the role of a team evaluating three potential markets for the issuance: US dollar (USD), euro (EUR), and Japan’s samurai bond market. Indonesia had built a strong track record in the USD and EUR markets, with multiple successful green and SDG bond issuances since 2018. Meanwhile, the samurai market presented a less conventional but potentially strategic opportunity. However, Japan’s conservative investor profile, which preferred plain-vanilla structures, and its limited secondary market liquidity presented trade-offs. The team faces a complex task to evaluate whether, how, and where Indonesia should launch its first blue bond. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

Great Eastern Holdings Ltd. (GEH)—a leading insurance company offering life and general insurance products, along with asset management services across Southeast Asia—received a buyout offer on May 10, 2024, from its major shareholder, Oversea-Chinese Banking Corporation Ltd. (OCBC). The offer was to acquire the remaining 11.56 per cent stake for S$1.4 billion. The offer price of $25.60 per share was 36.9 per cent higher than GEH’s last traded price of $18.70 but 30 per cent lower than GEH’s embedded value per share of $36.59 as of December 31, 2023. GEH minority shareholders needed to make an informed decision based on the valuation of GEH and weigh the trade-offs of accepting the offer. Key considerations included fair valuation, the interest of minority shareholders, OCBC’s strategic intention, and the potential delisting of GEH from Singapore Exchange Ltd. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

Best World International Private Limited, a company specializing in skin care and wellness products, had faced a multitude of challenges, prompting management to consider delisting it from the public stock exchange. The issues included declining profits, market uncertainties, trading halts, volatile stock prices, and increased regulatory scrutiny. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

AirAsia X Berhad (AAX), a long-haul, low-cost airline based in Malaysia, faced a difficult financial situation in October 2021. As the global COVID-19 pandemic had forced the Malaysian government to impose travel restrictions and close its borders in 2020, the majority of AAX’s fleet had been grounded. By 2021, AAX’s total liabilities outweighed its total assets by RM33.581 billion. Unable to service the lease payments to lessors, AAX designated Lim Kian Onn to lead the company’s restructuring. Lim needed to determine how to carry out the corporate-restructuring exercise, the creditors’ tolerance for such an exercise, and what terms to propose to creditors. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

In early 2015, many economies around the world were already dealing with a downturn in the markets when the price of oil dropped steadily, which had a strong impact on oil-dependent economies in the Persian Gulf region. As the corporate debt market decreased considerably, the airline Emirates (owned by The Emirates Group) decided to try a distinctly new approach by issuing a sukuk, or Islamic bond, with the backing of the United Kingdom’s Export Credits Guarantee Department. If successful, it would become the first sukuk certificate guaranteed by an export credit agency. It would also be the largest-ever debt capital markets offering in the aviation sector with a guarantee from an export credit agency. Surprisingly, the sukuk was not rated by any of the three major global credit rating agencies. Why was the sukuk issued by Emirates not assessed by a major credit agency? If it had been, what rating would it have received? Most importantly, what were the sukuk’s risks and how should such an innovative bond be priced? For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

As the Republic of Indonesia, the largest archipelagic nation in the world, was facing significant challenges posed by climate change, the imperative for immediate attention to the region’s climate issues became evident. Indeed, between 2018 and 2020, Indonesia issued three green sukuks, which were Shariah law-compliant debt instruments resembling green bonds. This case explores the specific approach taken by the Indonesian government to secure vital funding for initiatives aimed at mitigating and adapting to climate change in sectors including energy efficiency, renewable energy, resilience to climate change, sustainable transport, and waste and waste-to-energy management. The case also evaluates critical inquiries into the efficacy of the projects funded by the proceeds of green sukuk issuances in combating climate change. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

Stablecoins represent digital assets whose value is pegged to that of a fiat currency, commodity, or financial instrument. As non-volatile assets that enable relatively easy cross-border transfers and minimal price fluctuation relative to the reference asset, stablecoins are especially useful as a medium of exchange. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

This note is about tokenization and tokenized assets. Tokenization refers to the process of creating a representation of a particular asset on a blockchain via digital tokens. Tokenized assets typically derive their value from the value of the underlying asset. This note explores the benefits and risks of tokenization, as well as use cases. Moreover, it explores Security Token Offerings, considerations for tokenized asset issuers, and the Howey Test. It concludes with a consideration of how possible future trends may affect tokenization. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)

Green Consultant, a Singapore-based environmental consulting firm, had worked with several financial institutions before 2023 and was aware that many were interested in expanding their loan portfolios to include more environmentally inclined clients. In January 2023, one such client, a Singapore-based small and medium enterprise (SME) named Chang & Lee Manufacturing (CLM), approached Green Consultant to prepare a business proposal on how the SME could transition to solar energy. A green finance analyst at Green Consultant had one month to deliver a proposal to CLM. He had to consider the type of solar business model, the financing option, and the CLM stakeholders to engage, alongside CLM’s operational and financial conditions, to recommend the most economically feasible solar solution for CLM. For NUS Business School: (Faculty only) To obtain a free copy of the case, please contact Ms Kwok Siew Geok (bizksg@nus.edu.sg)