suriname_hydro - Case Study Suriname Hydropower Services...

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Case Study Suriname Hydropower Services Company The Project This is a financing proposal for the privatization of the Suriname Hydropower Services Company. The proposed buyer is a small privately owned Surinamian engineering firm that has very limited access to local bank financing. The buyer’s business has been built up from a small hydroelectric installation firm and the family’s ownership and involvement in SHS is regarded as essential for the company’s ongoing success and growth. The chief engineer is a Dutch national of Suriname origin who has decided to return to his home country. He has already negotiated a power supply contract with Rusal, the Russian aluminum company which is expanding its operations in Suriname. The Government of Suriname has agreed to sell the business for Eur18 million, a 20% premium above the appraised value of the assets. The local company has reached an agreement with a Dutch engineering consulting firm which will ensure that future construction meets EU standards. The Surinamians will contribute Eur 3 million and their own equipment in exchange for 51% of the equity, and the Dutch firm will contribute another Eur 2 million for which it will receive 25% of the equity. The remaining funding must come from outside equity, senior secured debt, and subordinated (mezzanine) debt. The mezzanine will be provided by the Dutch Emerging Market Fund (DEMF). Assignment The following preliminary financing plan has been proposed. It must be refined in order to meet all the parties’ objectives and provide a fair return to investors. Lenders must be repaid, and return objectives must be met for the mezzanine and equity investors. The terms of the
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suriname_hydro - Case Study Suriname Hydropower Services...

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