Government concession & P.P.P

Government concession & P.P.P - Tourism improvement
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The client and context:

·      Country Government and 2 cities, the client, and banks.

·      Tourism decreased form 11 M to 7 M in one year.

·      Necessity to reinforce the tourism economy (second after financial service) income for the Country but each stakeholder had different interests.

·      Goal: To have everyone on agreement for the project.

·      The project has to respect all laws, public tender, environment in an park, having the necessary profitability for the private investors.

The challenges:

·      Being a national project, several political parties had to agree to this project in order to arrive to a written agreement.

·      Several banks had to arrive to an agreement of who will finance the debt part.

·      Private shareholders had to agree in order to finance the equity.

·      Finally, Technically and local laws of flying systems had to be respected.

What we Did:

·      We spoke with each stakeholder in order to understand their needs individually and globally. And then we brainstormed how to start.

·      First we convinced the private company to finance the study and the business plan of the project. Concept definition, description of the concession terms, description of the services, demand, market study, pricing, benchmarking in Europe, Ropeway technical studies and architectural studies, environment and social studies, Financial studies (P&L, Balance sheet, financial and viability indicators), marketing plan, operational plan executive resume and press conference with presentation with video.

·      For a private equity fund – Identification of the opportunities to internationalise a potential acquisition target in luxury retail in the context of a commercial due diligence.

What we achieved:

·      We succeed to get the studies financed and more than approved by the private company.

·      The public entities signed an agreement in order that this project is of public interest and anyone will collaborate, and a public tender for the concession was launched two years ago.

·      Banks also agree to finance it, the private equity was agreed on 50% of the $ 40M project. Estimations were: Concession period 40 years, ROE 10-20%, NPV $ 22 M.

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Managing Partner, Brazil | M&A, Capital Rasing, Financial Restructuring

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Managing Partner, South Africa | Renewable Energy, Data infrastructure, Project Management

Umang Sahai

Senior Partner, India | Healthcare, Public sector, Government relations

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