From the fiscal point of position. the Italian luxury brand- Prada. which was known for its design invention. can’t claim itself successful. Although it has the ability to maintain its gross over 1. 5 billion euros for three back-to-back old ages. it besides contains more than 1 billion euros of debt maturing within 12 months sitting on its balance sheet. One of the best solutions for Prada to work out this job is to raise capital in the stock market. which we could mention as IPO. Given the current market conditions. listing in Hong Kong might appears to be the best pick after all. But. before we go farther in inside informations about the pros and cons about listing in Hong Kong. we should foremost discourse the grounds why we choose IPO over Debt and Strategic partnership.

Compare to publishing debt. an IPO will non add any more load to the company’s balance sheet. which for Prada. was already showed a mark of insolvency and over leveraged. Another issue is that no houses in this industry have of all time raised money in US bond market. Although “dim amount bond” – a Chinese Yuan denominated bonds issued in Hong Kong could be the best alternate to this state of affairs. nevertheless. the short life and the exchange hazard it involved are its most disadvantages.

How about sale some part of the house to the private equity houses to raise capital? For this trade. it seems that they will non merely offer a ample premium to the household. but besides to offer some of import places on the board excessively. But. comparison to IPO. it will non increase Prada’s promotion through this method. And besides. an Initial public offering in Hong Kong will give the company more chance to spread out their Asia market. particularly in China and Japan. Choosing a Strategic Partnership would be merely like giving that immense possible net income off. So. the following inquiry is how do we really use the IPO scheme?