Rajat Singh, managing director at Hudson Bancorp which is the largest printer of paper checks in the United States of America. The company is experiencing with long-term debts, and it had been 10 years that the company had not issued any major bonds. In addition to this, the company had been through severe program on repurchasing of shares. This kind of policy had been proven successful as the share repurchasing had been appreciated by the investors and company’s stock price had reached the highest level in the last 10 years. However, Lawrence J. Mosner, the chair and the chief executive officer of the company had directed a vital restructuring in the firm in terms of operation reduction in the labor force and diversification in various noncore businesses. Singh also realized that I would be beneficial to the company financial flexibility had been continued through disintegration of its core business and he also believed that essential funding and flexibility to accelerate survivability would have made through the financial policies.
Founded as a chicken-farmer- turned-printer, the Deluxe Corporation was established in 1915 St. Paul Minnesota and it is regarded as the pioneer in the emerging check printing business which had specialty on checks and checkbooks. In the United State of America, Deluxe was considered as the largest provider of checks and had been in a business with more than 10000 financial institutions. Nevertheless, half of the check had been made by Deluxe which is more than 100 million per year. From 1975 to 1975 to 1995, in these 20 years, check providing business was very sustainable and the revenue went up to 12 % compound interest rate annually. However, over the past decade, the usages of check had been declined, in comparison with the past in the recent years American consumer wrote more or less 42 billion checks, because the electronic forms of payment such as ATMs, Credit and debit cards and internet bill-payment system occupied the shares of checks in the market, in addition, 1%-3% in check demand had been decreased due to the spread of alternative payment system and this fragmented payment industry had been controlled by few firms and had have 90% of the market share and apart from the Deluxe company there were only two major competitors in the market which were John Harland and Clarke America.
In late 1990s, In order to make reorganization, the company had diversified non-strategic business and dramatically reduced the number of its employees and facilities and company went from 62 printing plant to 13 an labor force reduced from 15000 to 7000 and it had been diversified its business into 20 separate businesses.
In an initial public offering, Deluxe declared a major strategic shift with the spinoff its technology-related subsidiaries. This kind of electronic-transfer market had discouraged the deluxe management for new product and service offerings. There were three paper payment segments around three primary business units which were financial service sold checks to consumers through financial institution, direct checks sold to consumers through direct mail and the internet and business service segment sold checks, forms, and related products through financial institutions and directly to the small business.

Singh realized that the current and future financing requirements of the firm and he also felt the requirement of additional financing for such general corporate purpose as working capital, capital asset purchase, possible acquisitions, payment of outstanding debts, dividend payments and repurchasing the firm’s securities. In order to meet those short-terms financing needs Deluxe followed some debt instruments those were Commercial paper, Line of credit, Medium term notes. The company had repurchased 14 million shares which was 19% of the total share outstanding. Singh reviewed other probable demands on the firm’s resources with the possible buybacks and strategic acquisitions. According to the Singh, they would have taken the financial policy which would have minimized the cost of capital and he was focused on the company’s coverage and capitalization ratios under alternative debt policy.