Master Class from the Examining Board: The 2017 Amango Group Plc Case Study
The purpose of this article is to preview and summarise the six issues the teams entering the 2017 edition of 'The CFO' and 'The CFO Junior' Case Study Competitions will have to solve; written to guide the identification of the Knowledge areas that should inform the analysis of each issue as well as how the marking grid will be applied. The six issues are the same in both competitions but the level of detail, interconnectedness and complexity are markedly different.
For 'The CFO Case Study Competition', the applicable knowledge base is integrated and multi-disciplinary – drawing mainly from, but not limited to: Strategic Management, Risk Management, Cost and Management Accounting, Financial Accounting and Corporate Reporting, (International) Financial Management, Operations Management, Industrial Relations and Human Resources Management.
In the case of 'The CFO Junior', the applicable knowledge base is also integrated and multi-disciplinary – but drawing mainly from three key subjects in the High School curriculum: Accounting, Business Studies and Economics.
As the mission of the competition is to bring real life business challenges into the classroom, we have painstakingly designed each issue to ensure any report that fails to apply the relevant knowledge or theory will not do as well.
If a requisite knowledge area has not yet been covered, teams will be expected to do some internet research (google) on it. Please avoid reproducing the theory– rather apply it in your analysis to help the Board to solve the problem. This is extremely important as our mission is to assess the extent to which the classroom knowledge you have gained can be meaningfully applied to solve real world business problems.
THE AMANGO GROUP PLC CASE STUDY
The AMANGO case, Researched, Designed and Developed (R&DD) by The CharterQuest Institute is based on a real world multinational business within the global metal and mining industry. It simulates the strategic decisions its Group CFO and Board faced (or potentially faces). The group is faced with a complex interplay of strategic threats, weaknesses and opportunities, some of which are embedded with serious ethical dilemmas -involving compelling individuals and powerful stakeholders -that create a context for significant organisational change.
In particular, AMANGO; with multiple listings on the Johannesburg and London Stock Exchange, closed 2016 with a precarious debt burden and the worst losses in the last 10 years -on the back of plunging commodity prices -made worse by a credit downgrade from a number of international rating agencies including, Standard and Poor (S&P).
It was the worst performer on London’s Financial Times Stock Exchange (FTSE) 100 equity index – with a market value collapse of 75% and is facing possible ejection from the index in a month’s time. The Board has published a 3-year viability statement and turnaround strategy with emphasis on 4 policy objectives: (1) restructure the portfolio; (2) deleverage the balance sheet; (3) drive operational discipline; and (4) change dividend policy.
Six major issues have surfaced that require the group’s attention; for which the Board has asked your team to prioritise, evaluate and offer strategic advice.
For each of the six issues, we provide below a brief summary and the requisite knowledge areas to critically apply in the analysis. In no particular order, the issues include:
To read the six issues in this 2017 Case Study Scenario, subscribe to the FREE February issue of The Future CFO Magazine.