A Special-Purpose Vehicle, or SPV?

Special-Purpose Vehicle or SPV is a subsidiary of a company which is bankruptcy remote from the main organisation (i.e. protected even if the parent organisation goes bankrupt). The actions of an SPV are usually very tightly controlled and they are only allowed to finance, buy and sell assets.

The purpose of a Special-Purpose Vehicle is to allow the parent company to make highly leveraged or speculative investments without endangering the entire company. If the SPV goes bankrupt, it will not affect the parent company.

Be the first to comment!

You must login to comment

Related Posts