Project Financing Success Stories 1
1, power plant financing background
Hengyuan Power Plant Limited (Group) formerly known as Hengyuan Power Plant, was built in 1977. in October 1996, approved by the People's Government of the city where the reorganization of the Hengyuan Power Plant Group Co. Group companies under the jurisdiction of the power plant, self-power plant, cement plant, aluminum company and other 14 wholly-owned and holding subsidiaries, the existing total assets of 1.7 billion yuan, forming a power as a leader, coal, building materials, non-ferrous metals and processing, electronic appliances and so on, with a distinctive industrial chain characteristics and advantages of large state-owned enterprise groups. Among them, the power plant and its own power plant with an installed capacity of *** 256,000 kilowatts, its own coal mine with an annual output of 450,000 tons of raw coal, aluminum plant with an annual production capacity of 30,000 tons, fly ash cement plant with an annual production scale of 300,000 tons. In addition, aluminum processing plant and aluminum, silicon and titanium multi-alloy project is planned to be put into production in 1999. 1998, the group achieved sales revenue of 550 million yuan, profits and taxes of 110 million yuan, residing in the city budget enterprises in the forefront of the strong economic strength.
Hengyuan Power Plant submitted a project proposal to the State Planning Commission in 1995 to establish a 2 ?300 MW thermal power plant, and was approved in the same year. September 5-8, 1997, the General Institute of Electric Power Planning and Design of the feasibility study and supplementary review, and issued a supplementary feasibility report review. In the proposal, Hengyuan Power Plant planned a total project investment of RMB 3,822,610,000 yuan. Among them, the capital (including Chinese and foreign parties) amounted to RMB955.65 million (accounting for 25% of the total investment), and the project financing (including domestic and overseas financing) amounted to RMB2866.96 million (accounting for 75% of the total investment). Domestic financing of 8600.09 million yuan mainly from the China Development Bank, while the proposed financing of 2417.09 million yuan abroad, Hengyuan Power Plant intends to set up SPC debt issuance through the establishment of SPC outside the country, that is, asset securitization to achieve.
2, the choice of power plant financing model
May 21, 1997, the company through the bidding competition to the United States of America Solomon Brothers, Morgan? Stanley, Lehman Brothers, JP Morgan, Hong Kong's HSBC Investment Bank and Britain's BZW Bank, and other six world-renowned investment banks and commercial banks to provide proposals for financing options for the project. from July to September 1997, the investing parties clarified, analyzed and evaluated the financing options of each of the above mentioned companies. six of them all put forward the option of debt issuance by the project's ad-hoc SPC, and the latter two banks also proposed a syndicated loan. banks also proposed the option of a syndicated loan. The Company, after careful consideration, decided to opt for financing by way of debt issuance by an ad hoc ABS instrumentality for the following reasons, with Lehman Brothers acting as the financing consultant for Hengyuan Power Plant.
(1) Issuance of bonds in foreign capital markets mainly refers to the issuance of debt in large international capital markets such as the United States, Japan and Europe. Among them, the U.S. capital market is the world's largest capital market, the issuance period is the longest, while the market's trading liquidity for the world's first. Due to the large number of investors in the capital market, the issuance of debt in the capital market has greater flexibility, the scale of debt issuance and interest rates are more competitive, the financing can be completed in a shorter period of time, the financing period is also much longer than the general syndicated loans. In recent years, there are many large infrastructure projects around the world as well as the United States larger enterprises, are used in the capital markets to issue debt to achieve the purpose of financing.
(2) Syndicated loans refer to the formation of a lending group by several commercial banks to the project or enterprise lending. At present, the commercial banks lending to Chinese projects are mainly small and medium-sized banks that want to expand their market share in the World Bank, and the amount of financing that projects can obtain is generally small. As a result of the financial crisis in Southeast and East Asia, the number of commercial banks willing to lend to Asian countries has declined. Currently, there are no projects in the country that have been successful in obtaining syndicated financing with domestically produced equipment, domestic general contractors, limited recourse and without some kind of international risk insurance. In addition, syndicated loans are generally led by export credits, and it is very difficult to syndicate loans without export credits. Compared with the issuance of bonds, the syndication of more requirements on the project, the intervention of the project operation is more, the time required to obtain financing is generally longer.
(3) Export credit is not included in the financing considerations for this project because of the use of domestically produced equipment and domestic general contractors for Hengyuan Power Plant. It takes a longer time to obtain loans from the WB and ADB, and Hengyuan Power Plant is not a loan project of the WB or ADB.
(4) The security financing consultant for each investor in Hengyuan Power Plant has designed a program that is low-cost, has a higher likelihood of financing success, and can effectively obtain financing in a shorter period of time (about 6 months). Lehman Brothers, with its rich experience in debt issuance and in-depth understanding of the Hengyuan project, proposed realistic financing considerations; at the same time, Lehman Brothers' fees were the lowest among the various firms. Based on the project characteristics mentioned above, as well as a variety of financing channels and financing consultants proposed by the advantages and disadvantages of the financing program comparison, Hengyuan Power Plant decided to choose Lehman Brothers as a financing consultant, through the U.S. capital markets in the form of bond issuance for financing.
Project Financing Success Stories 2
The European Channel Tunnel project is currently the world's largest bot project, the tunnel is 50km long, including two 7.3m diameter railroad tunnels and a 4.5m diameter service tunnels, tunnels will be the United Kingdom and France to connect the two countries. 1986 signed a concession agreement in February, the project was completed in 1993, the concession period for 55 years. The project sponsors were the British Channel Tunnel Group. A consortium of British banks, and French builders.
The European Channel Tunnel project is currently the world's largest bot project, the tunnel is 50km long, including two 7.3m diameter railroad tunnels and a 4.5m diameter service tunnel, the tunnel will be connected to the UK and France. the concession agreement was signed in February 1986, and the project was completed in 1993, with a concession period of 55 years. The project sponsors were the British Channel Tunnel Group. A consortium of British banks, French builders.
The total investment in the project was US$10.3 billion, of which US$1.7 billion was equity and US$8.5 billion was borrowed, with a debt-to-equity ratio of 83:17 in the capital structure of the project.
Fifty international banks took part in the negotiation of the credit agreement, which was signed in September 1987 by a syndicate of 215 international banks and Eurotunnel. The negotiation of the credit agreement was synchronized with the equity fundraising. The credit agreement provided for a loan repayment period of 18 years and required strict implementation of the concession agreement, the railroad use contract and the construction contract.
The $280 million invested by the promoters before the end of 1986 as the first phase of equity, and the $370 million invested by the private sector at the end of 1986 as the second phase of equity, secured the funds needed for this phase of the project. three public equity issues were made in 1987, 1988, and 1989 to raise $80 million, $275 million, and $275 million, respectively. equity capital.
After the first tranche of equity capital was invested by the promoters, some of the banks made interim loan commitments before signing the concession agreement. Between the injection of the first and second tranches, credit agreements were negotiated and a loan syndicate was formed prior to the issuance of the third tranche of equity.
In September 1988, the Syndicate made its first loan payment to Eurotunnel.
From the actual operation process, during the construction of the Eurochannel project cost overruns were serious, and after the completion of the project due to the competition from other transportation facilities, its benefits were not satisfactory, the project so far, not a very successful bot case.
Project Financing Success Stories 3
A catering barge project in Chongqing was successfully financed with 60 million dollars.
The project is located in the Nambin Road Begonia Creek dock, the Department of Chongqing Sentinel Noah Catering Culture Co., Ltd. invested 150 million yuan RMB to set up a set of tourism observation and leisure, food and beverage, KTV entertainment, high-end business meetings in one of the catering and cultural projects. The ship's total *** length 80.32 meters, width 26 meters, height 31.5 meters, full load draft 4 meters, full load displacement 4773 tons, *** 7 floors, a total area of 14,000 square meters, is divided into catering, entertainment, tourism and leisure, high-end business clubs in four areas, including catering part of the 36 luxury rooms, multi-functional halls can accommodate 700 people at the same time, dining, entertainment part of the KTV size of 25 private rooms. The entertainment section has 25 KTV rooms of various sizes. High-end business club area of 2,000 square meters, tourism and leisure part of 1,500 square meters. It is the highest grade project of all the catering barges on the four sides of the two rivers in Chongqing, and it is another landscape that mirrors Hongyadong.
Project highlights:
1, Chongqing Dihang Ship Technology Consulting Co., Ltd. was hired to carry out the main design, Chongqing Huakai Decoration Co., Ltd. was hired to carry out the decoration design, but also specifically hired the Chongqing Hongkong and Hangzhou Ship Technology Co. to supervise the construction of the ship's entire project to ensure that the Sentainoya food and beverage barge safe, comfortable, luxurious and suitable for the overall effect.
2, the ship's technical requirements and standards are in strict accordance with the port and navigation, maritime, fire, environmental protection and other government departments to review the provisions of the standardized procedures. And by the maritime management department to take the lead in organizing a number of expert meetings to demonstrate that the decision-making.
3, the ship operation process of all wastewater, waste gas, waste residue all in accordance with environmental requirements for specialized treatment, with reference to the highest flood level in previous years, the addition of three anchor electric control equipment to ensure that the pontoon safe operation of fire, floods, explosions and other unforeseen factors such as 150 million yuan calibrated property insurance, in addition to the place of entry and exit of the personnel of public liability insurance, the project risk control capabilities have absolute guarantee. The project wind control ability has absolute guarantee.
4, with the party and the government to promote the concept of thrift and not waste, change the traditional way of ordering, the introduction of fixed-value food allocation, so that customers of different consumption levels to enjoy the fair price, variety, color and flavor of the catering services, to ensure that the rate of return.
5, in order to ensure that the high-end hardware service innovation based on all-out efforts to improve the quality of software services, so that high, medium and low-end customers can enjoy super-star service, so that the Sentinel Noah's hardware and software services reputation throughout the city, become the industry benchmark.
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