Grupo Sidek (A) Case Solution & Answer

This case is about COLLABORATION

PUBLICATION DATE: September 17, 1996

Grupo Sidek (A) Case Solution

A large Mexican conglomerate, active in real estate, tourism, and steel, is faced with difficult macroeconomic conditions beginning with the Peso crisis of December 1994. The conglomerate had extensive dollar-indexed obligations and was captured in a crisis when the Mexian Peso lost half its value against the dollar in late 1994. Even though a large part of its revenues were additionally dollar-indexed, so apparently supplying a currency hedge, most of the customers of the conglomerate were Mexican nationals. With the ensuing recession in 1995, the revenue base dried up, but the dollar obligations were still owed. The case covers the period from 1994 to February 1995 and deals with the operational and financial choice that Sidek had to face at that time.

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