The latest cash infusion has guaranteed Harley Davidson short term working capital; but it surely would need even more for a joyous ride!
And what about the recent receipts? It plans to use the amount to implement its 3-pronged strategy – build a stronger brand, put a leaner cost-structure in place and infuse funds into HDFS. “This offering represents an important step in executing our stated strategy for funding the lending activities of HDFS,” states Tom Bergmann, CFO, Harley-Davidson, to which Christian Breitstrecher, Analyst, Sal Oppenheim adds, “HDFS required urgent funding and the recent investment is a boon for it...” For now, the company has to ensure maximum and quick ROI from any future investments, as it is bound to pay both the investors a high 15% interest on their bonds, scheduled to mature in 2014.
For now though, the biggest worry is that HDFS will require kindness from more multi-million dollar investors in the coming years, to be able to continue providing loans to its consumers. Needless to say, Harley-Davidson’s future depends on it! For now though, Buffett is taking the muscle-bike on a long ride, and he’ll be back five years later; be ready with the cash Mr. Harley!
For now though, the biggest worry is that HDFS will require kindness from more multi-million dollar investors in the coming years, to be able to continue providing loans to its consumers. Needless to say, Harley-Davidson’s future depends on it! For now though, Buffett is taking the muscle-bike on a long ride, and he’ll be back five years later; be ready with the cash Mr. Harley!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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