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    Mozal Excel

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    derek4well
    The document summarizes the projected financials of a project in constant 1997 dollars over 25 years. It shows increasing total assets from $163 million to $1.328 billion from 1997 to 2000, then decreasing to $530 million in 2012. Senior debt increases from $63 million to $303 million total over the life of the project. Subordinated debt peaks at $150 million in 2005 then is fully repaid by 2012. The projected internal rate of return is 13.43% and the calculated cost of equity is 14.36%.

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    Mozal Excel

    Uploaded by

    derek4well
    1K views4 pages
    The document summarizes the projected financials of a project in constant 1997 dollars over 25 years. It shows increasing total assets from $163 million to $1.328 billion from 1997 to 2000, then decreasing to $530 million in 2012. Senior debt increases from $63 million to $303 million total over the life of the project. Subordinated debt peaks at $150 million in 2005 then is fully repaid by 2012. The projected internal rate of return is 13.43% and the calculated cost of equity is 14.36%.

    Original Description:

    Financing the Mozal Project

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    © Attribution Non-Commercial (BY-NC)

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    The document summarizes the projected financials of a project in constant 1997 dollars over 25 years. It shows increasing total assets from $163 million to $1.328 billion from 1997 to 2000, then decreasing to $530 million in 2012. Senior debt increases from $63 million to $303 million total over the life of the project. Subordinated debt peaks at $150 million in 2005 then is fully repaid by 2012. The projected internal rate of return is 13.43% and the calculated cost of equity is 14.36%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    1K views4 pages

    Mozal Excel

    Uploaded by

    derek4well
    The document summarizes the projected financials of a project in constant 1997 dollars over 25 years. It shows increasing total assets from $163 million to $1.328 billion from 1997 to 2000, then decreasing to $530 million in 2012. Senior debt increases from $63 million to $303 million total over the life of the project. Subordinated debt peaks at $150 million in 2005 then is fully repaid by 2012. The projected internal rate of return is 13.43% and the calculated cost of equity is 14.36%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    Exhibit 6

    Summary of Financial Projections in Constant 1997 Dollars ($ millions)

    Total assets
    Current senior debt
    Net senior debt
    Subordinated debt
    (quasi-equity)
    Retained Earnings
    Share capital
    Total capital
    Senior debt/Total capital
    Current ratio
    DSCR (senior debt)a
    DSCR (total debt)a

    Sales
    Cash flow (pre interest)
    Interest on senior debt
    Senior debt principal
    repayment
    Equity investmentb
    Dividends and subordinate
    debt interest
    Subordinated debt
    principal repayment

    Source:
    a
    b

    1997

    1998

    1999

    2000

    2001

    2002

    2003

    2004

    163

    778

    1,252

    1,328

    1,272

    1,202

    1,132

    1,062

    63

    366

    29
    595

    57
    592

    70
    522

    70
    451

    70
    381

    70
    311

    85

    144

    100
    163

    327
    778

    484
    1,252

    150
    13
    500
    1,312

    150
    13
    500
    1,255

    150
    13
    500
    1,184

    150
    13
    500
    1,114

    150
    13
    500
    1,044

    39%

    47%

    50%

    49%
    1.3
    5.2
    4.6

    47%
    1.4
    1.7
    1.6

    44%
    1.6
    1.6
    1.5

    40%
    1.8
    1.7
    1.6

    36%
    2.0
    1.8
    1.6

    394
    170
    12

    429
    189
    52

    429
    190
    47

    429
    190
    41

    429
    186
    35

    29
    22

    57

    70

    70

    70

    63

    51

    57

    63

    66

    100

    312

    216

    Company documents, IFC analysis, and casewriter estimates.

    DSCR = debt service coverage ratio = cash flow (principal + interest).


    The equity investment includes both equity and subordinated debt (quasi-equity) investments.

    Senior Debt
    Subordinated Debt
    Equity
    Total Value of Project

    63
    0
    100

    Senior Debt Payment (Principal+Interest)


    Total Debt payment (Principal + Interest)
    Interest For Subordinated Debt

    303
    85
    227

    258
    59
    157

    Total
    678
    150
    500
    1328

    54
    6
    16

    32.69 111.18 118.75 111.76 103.33


    36.96 118.13 126.67 118.75 116.25
    4.26
    6.95
    7.92
    6.99
    12.92

    Total equity cash flow

    -100.00 -312.00 -216.00 107.00

    IRR (year 1-25)


    Cost of Equity

    13.43%
    14.36%

    80.00

    73.00

    79.00

    81.00

    2005

    2006

    2007

    2008

    2009

    2010

    2011

    2012

    991

    921

    851

    750

    687

    607

    570

    530

    70
    240

    70
    170

    70
    100

    33
    67

    53
    13

    13
    0

    0
    0

    0
    0

    150
    13
    500
    973

    150
    13
    500
    903

    150
    13
    500
    833

    120
    13
    500
    733

    90
    13
    500
    669

    60
    13
    500
    586

    30
    13
    500
    543

    0
    13
    500
    513

    32%
    2.1
    1.9
    1.7

    27%
    2.3
    2.0
    1.8

    20%
    2.5
    2.0
    1.7

    14%
    4.0
    2.1
    1.4

    10%
    3.2
    4.3
    2.2

    2%
    7.1
    3.0
    1.8

    0%
    12.8
    12.1
    3.4

    0%
    16.1
    NA
    5.2

    429
    187
    29

    429
    187
    23

    429
    171
    17

    429
    170
    11

    429
    171
    7

    429
    170
    4

    429
    170
    1

    429
    170
    0

    70

    70

    70

    70

    33

    53

    13

    72

    79

    68

    73

    79

    106

    125

    140

    30

    30

    30

    30

    30

    98.42
    93.50
    85.50
    80.95
    110.00 103.89 100.59 121.43
    11.58
    10.39
    15.09
    10.48

    39.77
    77.73
    7.96

    56.67
    94.44
    7.78

    88.00

    94.00

    84.00

    59.00 101.00

    14.05 NA
    50.00
    32.69
    5.95
    2.69

    Assuming that cash flow remain same as the year 16 from y


    17
    18
    19
    20
    21
    22
    83.00 126.00 140.00 170.00 170.00 170.00 170.00 170.00 170.00

    me as the year 16 from year 17-25


    23
    24
    25
    170.00 170.00 170.00

    Fisher Equation :

    (1+Real Interest Rate) = (1+Nominal Interest Rate)/(1+Inflation index)


    1+Inflation Index = 1.0656 / 1.0357
    Inflation Index = 2.95

    Beta-Asset = 0.78
    Beta-Equity = Beta_Asset * V/E
    Beta-Equity = 0.78*1328/650
    Beta-Equity = 1.59

    Cost of Equity= Rf + Beta * (Rm - Rf - Inflation Index)


    Cost of Equity= 3.5 + 1.5936*(13.35 - 3.5 - 2.95)
    Cost of Equity= 14.36

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