The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
Investments in ports in financial turbulence times
1. maritime & transport business solutions
Investments in ports in financial turbulent times
Maritime Days, Odessa
2. MTBS Services and Solutions
05 July 2011 Scopeof Works- PortinvestYuzhny 13www.mtbs.nl maritime & transport business solutions 13
Value& Business Strategy
PortSector Reform
PortPolicy
Public PrivatePartnerships
Institutional & Regulatory Change
OrganizationalReform& Alignment
ValueCreation & Protection
FinancialModeling and Analysis
Feasibility
ProjectStructuring & Packaging
Business Case
Risk Valuation, Allocation, Mitigation
Transaction Strategy
Transaction Management
Documentation & Contracts
Tendering & negotiated Solutions
FinancialSolutions
LegalSolutions
FinancialStructuring
ProjectFinance
DueDiligence
Procurementof Finance
Investment/ Divestment
Merger & Acquisition
strategy
finance transactions
valuation
3. MTBS is a global leader in port & maritime advisory services
MTBS’s experience in the Port & Infrastructure Sector MTBS’s Clients in the Port & Infrastructure Sector
Global leader in Port
Transaction
MTBS is the global leader in transaction advisory services in the
port sector with a high success rate on both sell-side & buy-side
transactions
MTBS is independent, flexible and international.
MTBS are recognized content-leaders: implementing
international best practice transaction services and products.
Experienced and Qualified
Team
MTBS dedicated port team is the largest and most experienced
team, certainly when compared with global accounting &
strategy consultants.
MTBS’ senior experts have a long corporate history in blue chip
organisations such as Deloitte, PWC and Royal Haskoning, Royal
Boskalis, Port of Rotterdam, PSA.
MTBS’s team of experts all have deep-rooted experience in
Strategy, Business valuation, Transaction and Finance.
International Sector Focus
MTBS is an international consulting company with leading
maritime sector focus.
3
4. … with a global track record of port projects…
Ongoing Transaction
Successful Transaction
Completed Port Project
4
5. … with significant recent successful
Port Transaction implementations …
5
6. Financial Advisor
Brooklyn-Kiev Port
Odessa, Ukraine
Container Terminal Equity Valuation
Deal size US$ 37 million senior loan
Total project cost US$ 130 million
2009
Financial Advisor
Egypt, Cairo
Bid Preparation Dry Bulk Terminal El
Dekheila
2006
Deal size confidential
Flag of
Country Transaction advisor
Public Water Transport System
Dubai
UAE
Deal Size: US$ 25 million
2007
Financial Advisor
West Africa Container Terminal
Onne
Nigeria
Dealsize confidential
2004
6
… with significant recent successful
Port Transaction implementations …
7. 530 Mt*
150
Mt
The Region
7
Recent key shipping
economic developments
Recent key political
developments
390
Mt
* Excluding Russia Far East
Diverse and challenging landscape
8. Mediterranean Port Landscape
It is a patchwork
8
• High CAPEX
• Highly Competitive (initial cash flows)
• Many players
• Multiple PPP structures
• Range Greenfield - Privatisation
• Major trades/ different demands
9. International Operators in the Med
HPH
PSA
DPW
Eurogate
ICTSI
Contship Italia
Mersey Docks
Dragados / Noatum
APM Terminals Evergreen
COSCO
MSC
CMA CGM
TCB
9
Summa
HPC/HHLA
10. Challenges for investors – a snapshot
• Political Risk
• Physical war or upraises, also if outside country
• Trade war & custom regulations
• Change of Contract
• Change of Control
• Shipping patterns
• Direct calls to Black Sea
• Or, on the contrary: fragmented again
• Ships deployed/ Bosphorus
• Capacity developments
• Large addings of capacity in Marmara and East Med
• Overcapacity in Ukraine
• Taman development?
• Privatisation leading to stronger competition
10
12. What to do as an investor
• Hinterland Cargo
• anchor important (different commodities)
• BOT/ Concession contract
• Force Majeure clause
• Sovereign guarantees
• Flexible concession fee structure
• Flexible guarantees
• Flexible term
• Financing:
• Role for DFIs and ECAs
• Sovereign guarantees
• PPP Equity?
12
• CAPEX allocation PPP
• Fix vs moveable
• Risk engineering
• Safety
• Permitting
• Value Engineering:
• Phased investment
• Combined cargo mix
• Offtake/ secured volumes allignment
• Diversification:
• Geographically
• Cargo mix
• Partnering:
• How to secure long term?
• Changing structures of power?
13. The bankability Challenge
13
(400)
(300)
(200)
(100)
-
100
200
300
400
0 5 10 15 20
mioUSD
Cash Flow Diagram
Cumulative FCF Investments Opex Revenues
• This Greenfield port project has
a project IRR of 19% and a
positive NPV.
• However, the first year of
positive Free Cash Flow is in
year 6
• The pay-back period is 10 years
from initial investment.
• Vale created after the
expansion investments in year
15 are not of interest for the
lenders!
• So, how bankable is this project
for project financing?
14. The Bankability Challenge
a viable project is not yet a bankable one
14
Economic & Financial
Balance
Financial Viability Bankability
IRR NPV
Secu-
rities
DSCR
• Determined over a
period of > 20 years
• Includes future project
phases
• Determined over a
period of < 20 years
• Depending of project
start-up phase
15. Project Bankability
a viable project is not yet a bankable one
• Debt service
• CAPEX aligned with revenues
• Value Engineering
• Increased need for proper valuation methods and modeling
• Securities
• Proper structuring
• Proper risk engineering
• Quantification (value) of impact of different structures and risk allocations: create value
• Safeguarding in the mean time authorities interest to retain discretion over policy
• New era of contract engineering
15
16. Value engineering
Additional value should be created to make the project bankable
• Commercial understanding is primordial:
• Engineering follows commercial reality
• Off-take contract versus TSA growth
• How to tie in committed cargo
• Value engineering to increase initial bankability
while preserving financial and commercial
viability (NPV/ IRR), some examples
• Mobilisation costs
• Cost of possible later demolishing costs
• Costs for eventual later stage of expansion
• Impact of value engineering options on
commercial and financial viability and on
bankability have to be quantified in a clear
valuation model
• Value engineering options need to be translated
in a proper structuring of the project, split of
obligations and risks, and consecutive contract
flow
16
Commercial
aspects
Technical
aspects
Value Engineering options:
• Securing cargo/ cargo types
• Phasing
• Construction time
Quantification of options:
• Viability (NPV/IRR)
• Bankability (DSCR)
• Commercial viability (sensitivity)
Translate option in structuring
Translate option in contract flow
ValueCreationandOptimisation
17. 2nd MED Ports 2014 Exhibition and Conference Marrakech23 & 24 April 2014 17
Full BOT Medium BOT BOT light Landlord
Viable +/- high risk Yes Yes No
Bankable Uncertain +/- Yes Limited
Market appetite Limited/ uncertain Attractive Highly attractive Only Terminals
Concession term Freehold Long (>50yrs) Shorter Terminal: 25y
BOT
• Land
• Environmental
• Breakwater
• Dredging
• Port civils
• Fleet
• Quays
Terminal
operators
PA
PA
• Land
• Environmental
PA
• Land
• Environmental
• Breakwater
BOT
• Breakwater
• Dredging
• Port civils
• Fleet
• Quays
BOT
• Dredging
• Port civils
• Fleet
• Quays
Terminal
operators
Terminal
operators
BOT Full BOT Medium BOT Light
= BOT
= PA
PA
• Land
• Environm.
• Breakwater
• Dredging
• Port civils
• Fleet
• Quays
Terminal
operators
Landlord
= TO
Project Structuring
Different models with different specifications
18. 18
PDMC Model as balanced alternative to
BOT
Lead
shareholder
Public
shareholders
Private
shareholders
DFI’s
Port
authority
1. Master Concession
19. 19
Structured Financing
Potential involvement of DFI’s:
• Longer tenors
• Longer grace periods
• Sculpted repayment schemes
• Often regarded as subordinated to commercial lending
• Interest similar to commercial banks, unless it is tied or backed by sovereign guarantees
• Standby credit facility
Equity
Debt
Lead Partner
Other
International Terminal Operator
Infrastructure Funds, Shipping Lines, etc.
DFI
Commercial Loan
Pool of DFI’s / Multilaterals
Pool of Commercial Banks
35%
65%
20. Creating value and Bankable Projects
Impact of Value Engineering and Structuring
20
Value/ viability
Bankability
DSCR
Securities
Initial Value
Engineering
Value
Contracting
21. What to do as an investor
• Hinterland Cargo
• anchor important (different commodities)
• BOT/ Concession contract
• Force Majeure clause
• Sovereign guarantees
• Flexible concession fee structure
• Flexible guarantees
• Flexible term
• Financing:
• Role for DFIs and ECAs
• Sovereign guarantees
• PPP Equity?
21
• CAPEX allocation PPP
• Fix vs moveable
• Risk engineering
• Safety
• Permitting
• Value Engineering:
• Phased investment
• Combined cargo mix
• Offtake/ secured volumes allignment
• Diversification:
• Geographically
• Cargo mix
• Partnering:
• How to secure long term?
• Changing structures of power?
22. Conclusions
• Investors face many challenges investing in East Med and Black Sea:
• Political risk
• Shipping line patterns
• Capacity additions
• Improved performance competing port following privatisation
• Unlocking investments institutional:
• CAPEX structuring
• Concession contract conditions: flexible, guarantees, Force Majeure
• Sovereign Guarantees
• Structured (DFI) financing
• Business approach
• Cargo diversification
• Geographical diversification
• Partnering
• Hinterland anchoring (multiple cargoes)
22
23. General Conclusions
• Each region has peculiar problems and challenges
• Each country is specific
• PPP models
• State intervention and Guarantees (financing)
• Labour
• Cargo flows not always logic: customs, trade agreements, impediments
• Every deal is tailor-made
• Concessions: Quid Force Majeure? Who takes the risk?
• Role for DFIs?
23
24. maritime & transport business solutions
maritime strategy & finance advisors
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