Financial Re-Engineering with Respect to Funding of New Projects of Al Essay

Financial Re-Engineering with Respect to Funding of New Projects of Al Masaken - Essay physical exerciseBeing a subsidiary and a group confederacy of Aerated Concrete Industries Company K S C C (ACICO), Al Masaken veridical Estate Company has created for itself a remarkable position in the booming real estate sector in the Gulf region.The company has so cold executed various prestigious body structure projects worth close to $ 300 million with a construction area extending up to 291,143 Square meters. Backed up by a good design and engineering team the company has crossed over the initial struggles and has reached the position to take up construction projects of eminent rise buildings on its own financial strength. As a strategic financial initiative, it was suggested that Al Masaken is promoted as an independent business entity and raise the additional cash in hand required for its proposed high rise construction projects following the IPO route supported by the group image o f ACICO. This case study details the dowry which led to such a decision of providing the individual status to Al Masaken and the various other factors which contributed to the proposal.Specialized in Housing/Villa projects, Al Masaken was established in 1998 as a part of ACICO group with a 25% ownership from ACICO. Having sailed through the initial hiccups the company specialized in the new wave construction of upright housing by the year 2003. Being one of the subsidiaries of the ACICO, the financial strategy was to obtain short-term loans to finance the purchase of the real estate properties and for the process of construction activity and repay the loan within a maximum period of one and a half years. Financing Strategy at the Holding company ACICO adopted a financial policy of long-term borrowing for its other manufacturing activities and short-term borrowing for the construction activity.