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Bina Puri Holdings Bhd   CIMB Investment Bank Berhad
Financial Report


Table of Contents
Section 1 : Risk & Mitigation Analysis

Section 2 : Security Arrangement

Section 3 : Estimated Capital Expenditure

Section 4 : Preliminary Financing Plan and Parameters

Section 5 : Sensitivity Analysis & Project Economics

Section 6 : Way Forward




                                                        2
Section 1
Risk & Mitigation Analysis
Risk Analysis – Construction Period
 Risk                       Mitigating Factor

 Increase in construction   •   Lump Sum Turnkey Design and Build Contract
 cost                           arrangement

                            •   Contingency in construction cost (10% of construction cost)
 Delay in completion        •   Penalty clause / liquidated ascertained damages, insurance
                                during construction period & performance bond

 Technical performance      •   Penalty clause & defect liability / warranty period

 Land acquisition           •   Minimum land acquisition is required

                            •   Under M9 CA, NHA shall bear all costs, expenses or
                                charges incurred in making available the land required
 Public Utilities           •   Under M9 CA, NHA shall pay for the costs and expenses
                                associated with the removal, relocation or diversion of
                                Public Utilities and services ancillary affected by the Works
                                at a date no later than the Work Commencement Date




                                                                                                4
Risk Analysis – Operating Period
 Risk                  Mitigating Factor


 Traffic Volume        •   Minimum traffic assurance by NHA. Under M9 CA, NHA
                           shall pay the Concessionaire on the lost tolling revenue in
                           the event the actual traffic volume for any operating year
                           of the Concession is lower than the Minimum Traffic
                           Volume for that year

                       •   Independent traffic & revenue study by Exponent
                           Engineers
 Toll Rate             •   Under M9 CA, monetary compensation shall be payable
                           by NHA to Concessionaire on any reduction in Schedule
                           Toll Structure

 Competing Routes      •   Under M9 CA, NHA shall undertake that any Competing
                           Route shall be tolled at the toll rate equivalent to 1.33
                           times higher than the prevailing toll rate imposed by the
                           M9 Motorway
 Highway Maintenance   •   Minimal risk as existing Bina Puri’s highway concession in
                           Malaysia (LATAR) has not encountered major operational
                           problems as all expressways in Malaysia are governed &
                           regulated by stringent standards

                                                                                         5
Risk Analysis – Concession
 Risk                          Mitigating Factor

 Termination due to Event of   Prior to Financial Close
 Default & Force Majeure       NHA shall compensate the Concessionaire for actual pre-
                               development cost and actual development cost

                               Prior to Completion of Works
                               NHA shall compensate the Concessionaire for actual pre-
                               development cost, actual development cost, actual cost in
                               raising finance, value of completed work, consultant fees &
                               third party costs, and interests as well as penalty charges

                               Upon Completion of Works
                               NHA shall compensate the Concessionaire for actual pre-
                               development cost, actual development cost, actual cost in
                               raising finance, value of completed work, consultant fees and
                               third party costs, interests as well as penalty charges, and
                               return on equity of the Concessionaire (for NHA’s event of
                               default)

                               Notwithstanding, under Concessionaire’s event of default,
                               Lenders are compensated for any amount due


                                                                                               6
Section 2
Security Arrangement
Proposed Security Arrangement

   Assignment of all rights, interests and benefits whatsoever (to the
    exclusion of any liabilities therein) under the M9 CA including the right to
    collect and retain toll and other revenues

   Debenture on fixed and floating assets – main office and administration
    buildings (2 units), maintenance offices (at least 7 units), machineries,
    vehicles, quarry, etc

   Assignment of lease and rental contracts with third parties for RSA, petrol
    stations, restaurants, bill boards, etc

   Assignment of Turnkey Construction Contract

   Assignment of Performance Bond

   Assignment of Insurance proceeds

   Shareholders’ Undertaking for cost overruns

   Assignment of DSRA and any cash in-hand & bank balances
                                                                                   8
Section 3
Estimated Capital Expenditure
Estimated Capital Expenditure

  Detailed Breakdown
                                                                                     Rupees
                              Description                                           (“PKR”)
  Main Carriageway (North & South Bound)                                         12,898,796,912
  Interchanges (7 nos)                                                           1,507,732,244
  Service Road                                                                   1,084,549,545
  Service Areas (North and South)                                                 676,595,473
  Main Toll Plaza                                                                 378,494,986
  Weigh Bridges & Allied Works                                                    236,559,366
                                                    Construction Cost             16,782,728,525
  General & Preliminary, Consultancy, Design & Project
   Management Fees                                                                1,485,271,472
                                                            Grand Total           18,267,999,997



  NB: The above capex does not include refurbishment cost for the existing road

                                                                                                   10
Estimated Capital Expenditure (Cont’d)



           Proposed Implementation Schedule

                  Year                Implementation            Amount
                                       Schedule (%)           (PKR ‘Million)

                  2012                     30#                   5,480.4
                  2013                     40                    7,307.2
                  2014                     30                    5,480.4
                                                      Total     18,268.0

       NB: #Indicative of full year




                                                                               11
Section 4
Preliminary Financing Plan and Parameters
Preliminary Financing Plan and Parameters

  Indicative Salient Terms


                             Earlier Case   Revised Case
                                              (Current)


   Interest Rate              13.5% p.a.      15% p.a.


   Loan Tenure:               10 years        10 years
   - Grace                     3 years        4 years
   - Repayment                 7 years        7 years


   Debt to Equity Ratio        80 : 20         75 : 25


   DSRA                       3 months       4 months


   DSCR (min)                 1.5 times      1.5 times

                                                           13
Preliminary Financing Plan and Parameters (Cont’d)
         Source & Application of
                Funds

                                                        Earlier Case   Revised Case
                                                                         (Current)


     PKR ‘Million                                          Total          Total

     Debts                                               18,524.0       16,969.8

     Equity                                               4,652.5        5,655.7

     Total Uses                                          23,176.5       22,625.5

     Construction Cost                                   18,268.0       18,268.0

     Interest During Construction                        3,569.7         3,690.7

     Other Funding Costs, Cash Balance & Debt Service
     Reserve Account                                     1,338.8          666.8

     Total Funds                                         23,176.5       22,625.5




                                                                                      14
Section 5
Sensitivity Analysis & Project Economics
Sensitivity Analysis

                                       Adverse Case                  Best Case
                                                                 (Potential Case)


Total Projected Toll Revenue       Reduce by 8% or PKR        As per Revised Case or
                                  703.3 bill                      PKR 745.7 bill
                                     (As per NHA case /
                                 Minimum Traffic Assurance)


Sectional Completion & Tolling                 None            Hydrebad – Noriabad
                                                                section completed
                                                              (Additional of PKR 857
                                                               bill for 1 year after 18
                                                              months of construction)


Non-Toll Revenue                     2% of Toll Revenue        10% of Toll Revenue


                                                                                          16
Project Economics
 SUMMARY OF FINANCIAL RESULTS                      Revised      Adverse      Best / Potential


 Total Revenue (PKR ‘Million)                      745,717.0    685,761.3      807,757.6
                                - Toll Revenue     764,848.7    703,356.5      765,701.4
            - Other Revenue (Ancillary Incomes)     15,297.0     14,067.1       76,484.9
                       - NHA Revenue Sharing       (34,428.7)   (31,662.3)     (34,428.7)

 Total Capex (PKR ‘Million)                                     18,268.0

 Total O&M Cost (PKR ‘Million)                     109,224.6    103,075.3       109,878.5


 Financed by:                                                   22,625.5
                              - Commercial Loan                 16,969.8
                                        - Equity                5,655.7
 Debt to Equity Ratio                                             75 : 25
 Interest Rate:
                              - Commercial Loan                  15% p.a.
 Loan Tenure:
                              - Commercial Loan                 10 years
 DSCR (min):
                              - Commercial Loan    1.5 times    1.5 times       1.5 times

 DSRA
                                                   4 months     3 months        6 months

                                                                                                17
Section 6
Way Forward
Way Forward


  To humbly request lenders with indicative participation with terms in order
   to expedite construction works

  To request lenders’ debt arranger proposal (with indicative fee) for Bina
   Puri to appoint joint lead arranger




                                                                                 19
Project+brief presentation july

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Project+brief presentation july

  • 1. Bina Puri Holdings Bhd CIMB Investment Bank Berhad
  • 2. Financial Report Table of Contents Section 1 : Risk & Mitigation Analysis Section 2 : Security Arrangement Section 3 : Estimated Capital Expenditure Section 4 : Preliminary Financing Plan and Parameters Section 5 : Sensitivity Analysis & Project Economics Section 6 : Way Forward 2
  • 3. Section 1 Risk & Mitigation Analysis
  • 4. Risk Analysis – Construction Period Risk Mitigating Factor Increase in construction • Lump Sum Turnkey Design and Build Contract cost arrangement • Contingency in construction cost (10% of construction cost) Delay in completion • Penalty clause / liquidated ascertained damages, insurance during construction period & performance bond Technical performance • Penalty clause & defect liability / warranty period Land acquisition • Minimum land acquisition is required • Under M9 CA, NHA shall bear all costs, expenses or charges incurred in making available the land required Public Utilities • Under M9 CA, NHA shall pay for the costs and expenses associated with the removal, relocation or diversion of Public Utilities and services ancillary affected by the Works at a date no later than the Work Commencement Date 4
  • 5. Risk Analysis – Operating Period Risk Mitigating Factor Traffic Volume • Minimum traffic assurance by NHA. Under M9 CA, NHA shall pay the Concessionaire on the lost tolling revenue in the event the actual traffic volume for any operating year of the Concession is lower than the Minimum Traffic Volume for that year • Independent traffic & revenue study by Exponent Engineers Toll Rate • Under M9 CA, monetary compensation shall be payable by NHA to Concessionaire on any reduction in Schedule Toll Structure Competing Routes • Under M9 CA, NHA shall undertake that any Competing Route shall be tolled at the toll rate equivalent to 1.33 times higher than the prevailing toll rate imposed by the M9 Motorway Highway Maintenance • Minimal risk as existing Bina Puri’s highway concession in Malaysia (LATAR) has not encountered major operational problems as all expressways in Malaysia are governed & regulated by stringent standards 5
  • 6. Risk Analysis – Concession Risk Mitigating Factor Termination due to Event of Prior to Financial Close Default & Force Majeure NHA shall compensate the Concessionaire for actual pre- development cost and actual development cost Prior to Completion of Works NHA shall compensate the Concessionaire for actual pre- development cost, actual development cost, actual cost in raising finance, value of completed work, consultant fees & third party costs, and interests as well as penalty charges Upon Completion of Works NHA shall compensate the Concessionaire for actual pre- development cost, actual development cost, actual cost in raising finance, value of completed work, consultant fees and third party costs, interests as well as penalty charges, and return on equity of the Concessionaire (for NHA’s event of default) Notwithstanding, under Concessionaire’s event of default, Lenders are compensated for any amount due 6
  • 8. Proposed Security Arrangement  Assignment of all rights, interests and benefits whatsoever (to the exclusion of any liabilities therein) under the M9 CA including the right to collect and retain toll and other revenues  Debenture on fixed and floating assets – main office and administration buildings (2 units), maintenance offices (at least 7 units), machineries, vehicles, quarry, etc  Assignment of lease and rental contracts with third parties for RSA, petrol stations, restaurants, bill boards, etc  Assignment of Turnkey Construction Contract  Assignment of Performance Bond  Assignment of Insurance proceeds  Shareholders’ Undertaking for cost overruns  Assignment of DSRA and any cash in-hand & bank balances 8
  • 10. Estimated Capital Expenditure Detailed Breakdown Rupees Description (“PKR”)  Main Carriageway (North & South Bound) 12,898,796,912  Interchanges (7 nos) 1,507,732,244  Service Road 1,084,549,545  Service Areas (North and South) 676,595,473  Main Toll Plaza 378,494,986  Weigh Bridges & Allied Works 236,559,366 Construction Cost 16,782,728,525  General & Preliminary, Consultancy, Design & Project Management Fees 1,485,271,472 Grand Total 18,267,999,997 NB: The above capex does not include refurbishment cost for the existing road 10
  • 11. Estimated Capital Expenditure (Cont’d) Proposed Implementation Schedule Year Implementation Amount Schedule (%) (PKR ‘Million) 2012 30# 5,480.4 2013 40 7,307.2 2014 30 5,480.4 Total 18,268.0 NB: #Indicative of full year 11
  • 12. Section 4 Preliminary Financing Plan and Parameters
  • 13. Preliminary Financing Plan and Parameters Indicative Salient Terms Earlier Case Revised Case (Current) Interest Rate 13.5% p.a. 15% p.a. Loan Tenure: 10 years 10 years - Grace 3 years 4 years - Repayment 7 years 7 years Debt to Equity Ratio 80 : 20 75 : 25 DSRA 3 months 4 months DSCR (min) 1.5 times 1.5 times 13
  • 14. Preliminary Financing Plan and Parameters (Cont’d) Source & Application of Funds Earlier Case Revised Case (Current) PKR ‘Million Total Total Debts 18,524.0 16,969.8 Equity 4,652.5 5,655.7 Total Uses 23,176.5 22,625.5 Construction Cost 18,268.0 18,268.0 Interest During Construction 3,569.7 3,690.7 Other Funding Costs, Cash Balance & Debt Service Reserve Account 1,338.8 666.8 Total Funds 23,176.5 22,625.5 14
  • 15. Section 5 Sensitivity Analysis & Project Economics
  • 16. Sensitivity Analysis Adverse Case Best Case (Potential Case) Total Projected Toll Revenue Reduce by 8% or PKR As per Revised Case or 703.3 bill PKR 745.7 bill (As per NHA case / Minimum Traffic Assurance) Sectional Completion & Tolling None Hydrebad – Noriabad section completed (Additional of PKR 857 bill for 1 year after 18 months of construction) Non-Toll Revenue 2% of Toll Revenue 10% of Toll Revenue 16
  • 17. Project Economics SUMMARY OF FINANCIAL RESULTS Revised Adverse Best / Potential Total Revenue (PKR ‘Million) 745,717.0 685,761.3 807,757.6 - Toll Revenue 764,848.7 703,356.5 765,701.4 - Other Revenue (Ancillary Incomes) 15,297.0 14,067.1 76,484.9 - NHA Revenue Sharing (34,428.7) (31,662.3) (34,428.7) Total Capex (PKR ‘Million) 18,268.0 Total O&M Cost (PKR ‘Million) 109,224.6 103,075.3 109,878.5 Financed by: 22,625.5 - Commercial Loan 16,969.8 - Equity 5,655.7 Debt to Equity Ratio 75 : 25 Interest Rate: - Commercial Loan 15% p.a. Loan Tenure: - Commercial Loan 10 years DSCR (min): - Commercial Loan 1.5 times 1.5 times 1.5 times DSRA 4 months 3 months 6 months 17
  • 19. Way Forward  To humbly request lenders with indicative participation with terms in order to expedite construction works  To request lenders’ debt arranger proposal (with indicative fee) for Bina Puri to appoint joint lead arranger 19