Tianjin Plastics were undertaken as project finance ventures. Project financing is a way in which large standalone investments may be financed from their own assets and cash flows, without recourse from the assets of the equity holders themselves. Project financing is the primary method was taking for the massive infrastructure investment throughout many places such as China, Malaysia, Indonesia, the Philippines, India, Bangladesh, Pakistan, and other emerging economies. However, despite that the complexity of project finance (because they were detailed agreements that require thousands of pages of documentation), was extremely uncomfortable with the problems posed by the Tianjin proposal.
Political:
In the past three decades, project finance has contained some of the largest individual investments, including: British Petroleum’s financing of its interests in the North Sea (totaling $972 million in 1972); the Trans-Alaska Pipeline, a joint venture between Standard Oil of Ohio, Atlantic Richfield, Exxon, British Petroleum, Mobil Oil, Phillips Petroleum, Union Oil, and Amerada Hess (1978). Each of these investments represent capital expenditures that exceed the ability of a single firm to finance. However, through a joint venture arrangement, the higher risks more than normal that absorbed by the capital employed could be managed.
Legal:
The China project was established as an individual legal entity, and it separates from the legal and financial responsibilities of its
This business has strong position in some segments; the demand for oil and gas would be increased by next years, annual prices for oil and gas will also increase. The consultant felt that demand and supply picture is increasing and would be favorable for those firms that had developed the business earlier. However, according to the consultant, it would not be favorable to invest more in exploration and production, so Mensa should expand this business through intensification strategy. As the production would peak from 2002 to 2010, they advised that their existing reserves and the land they own would only increase in value over time, even though Mensa could never grow to be competitive within this industry due to the size of their existing competitors. The Florida pipeline in this sector is a significant tool for improvement in profits, as the cash flow for this business was estimated to increase $100million to $300million in year 5. For exploration and production division, if divestment strategy is followed then the division could be sold for $1,560,000,000 at present and it will be increased up to $2,000,000,000 within 5 to 6 years. The profits would be increased by 8-10%, with a focus on building supplies of both oil and gas.
The question that transcends the project is whether equity investors be sufficiently rewarded to justify there financing interests. The answer to this question is dependent
The case study of NewGrade Energy is based on data analysis from 2009. A privately owned company located in Regina, Saskatchewan that operates heavy oil upgrader, The Company’s ownership structure consists of the Government of Saskatchewan and Federated Co-Operatives Limited each owning 100% of the company and Crown Investment Corporation (CIC) and Consumer’s Co-Operative Refineries Limited (CCRL) both owning 50% (Ivey, 2009). At the time of its $ 770 million dollar, inception in 1988 CIC and its third-party lenders financed $150 million to the project and the government of Saskatchewan and Canada guaranteed the capital venture (Ivey, 2009). The
The two pie charts compare the respective categories of US household garbage in 1990 and 2005. Overall, most of household garbage was the paper in both years while the percentage of plastics in 2005 rose by 10% compared to in 1990.
Project finance is a kind of Financing that has a priority does not depend on the creditworthiness of the sponsors proposing the business idea to launch the project. Approval does not even depend on the value of assets sponsors are willing to make available as collateral. Instead, it is basically a function of the project’s ability to repay the debt contracted and remunerate capital invested at a rate consistent with the degree of
“When AES undertook primarily domestic contract generation projects where the risk of changes to input and output prices was minimal, a project finance framework was employed.”
These two cases present the capital investment decisions under consideration by executives of a large chemicals firm in January 2001. The A case (case 20) presents a go/no-go project evaluation regarding improvements to a polypropylene production plant. The B case (case 21) reviews the same project but from one level higher, where the executive faces an either/or investment decision between two mutually exclusive projects. The objective of the two cases is to expose students to a wide range of capital budgeting issues:
“When was the last time you spent an entire day without using a piece of disposable plastic?” This quote is used by Kitt Doucette in her article, An Ocean of Plastic (412). It shows that using plastic water bottles are becoming a part of people’s lifestyle, regardless people don’t think about the consequences of using them. Water is a necessary part to human life and without water we cannot survive. Humans need at least eight glasses of water to make up for the fact that we lose an average of ten glasses per day throughout normal functions such as sweating and breathing. We must drink the right amount of water in order to stay healthy. There are millions of people worldwide who use plastic water bottles, and there have been massive sustainability
- Hypothesis: If you cut a 5 mm piece of plastic dry-cleaning bag, a plastic kitchen wrap, a plastic sandwich bag, and a plastic grocery bag, and you added weights (2 pounds) to stretch the plastics, then the plastics will 90% stretch longer than their original 4 mm length.
This chapter focuses on three aspects of foreign investment analysis that are infrequently considered in evaluating domestic projects: the difference between project and parent cash flows; incorporating political risks such as expropriation and currency controls; and factoring in inflation and exchange rate changes in cash flow estimates. It also evaluates the various methods used to incorporate in the investment analysis the additional risks encountered overseas. These points are brought out in the process of working through the International Diesel Corporation Case. The ability to perform a capital budgeting analysis is one of the most valuable skills we can provide our
One of the critical problems confronting management and the board of Pioneer Petroleum Corporation was the determination of a minimum acceptable rate of return on new capital investments, The company’s basic capital budgeting approach was to accept all proposed investments with a positive net present value when discounted at the appropriate cost of capital. At issue was how the appropriate discount rate would be determined.
This research question aims to think deeper on the circumstances of the overuse of plastic and paper, and what could happen more to the animals/birds, our environment, and our bodies if consumers keep on using plastic and paper products. This research question should be asked to raise awareness to users and most importantly designers, so they consider using other eco friendly material in designing their products.
Project finance transactions are typically either (i) limited recourse, where lenders do not assume the entire financial risk of the project and instead rely on mechanisms such as completion guarantees or parent guarantees, or (ii) non-recourse, where the revenues generated from the project and the project’s assets repay the indebtedness owed to the lenders. In addition to providing funds to complete new projects, the scope of project finance also allows project companies to expand existing projects or refinance existing indebtedness on existing projects at more favorable terms.
This project has decided that the initial investment will be partly financed by parent and subsidiary, at debt of 35 % from parent (uk) and 35% from host country (south Korea) to complete the initial investment.
The structure of a project’s financing depends on the industry the transaction is taking place, the underlying business model and in particular the allocation of risks and responsibilities between the individual partners (Weber & Alfen, 2010).