Fresh Ltd (Fresh) needs to raise finance for the expansion of its fresh food business.

It isconsidering two options.

4a. a public issue of redeemable preference shares:

and b. a loan from Strategic Finance Ltd (Strategic).

If it proceeds with option (b), Strategic requires Fresh to provide security for the loan.Fresh owns land, buildings, plant and equipment and trading stock (food for resale).(i) Compare the advantages and disadvantages of both options

.(ii) If Strategic advances funds it will take a security interest in relation to the propertyof Fresh. In these circumstances how would you describe the plant and equipment?

(iii) If Strategic takes a circulating security interest over the company’s assets, whatwould be the best way of protecting its right of enforcement?

(iv) What would be the effect of Fresh being wound up in insolvency 3 months afterStrategic’s circulating security interest was created.

SophiaPretty

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Status NEW Posted 31 Jul 2017 07:07 AM My Price 6.00

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