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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
4
Risk Mitigating Factor
Increase in construction cost
• Lump Sum Turnkey Design and Build Contract 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
Risk Analysis – Operating Period
5
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
Risk Analysis – Concession
6
Risk Mitigating Factor
Termination due to Event of Default & Force Majeure
Prior to Financial CloseNHA shall compensate the Concessionaire for actual pre-development cost and actual development cost
Prior to Completion of WorksNHA 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
Section 2
Security Arrangement
Proposed Security Arrangement
8
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
Section 3
Estimated Capital Expenditure
Estimated Capital Expenditure
Description
Rupees
(“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
Detailed Breakdown
10
NB: The above capex does not include refurbishment cost for the existing road
Year Implementation
Schedule (%)
Amount
(PKR ‘Million)
2012 30# 5,480.4
2013 40 7,307.2
2014 30 5,480.4
Total 18,268.0
Estimated Capital Expenditure (Cont’d)
Proposed Implementation Schedule
NB: #Indicative of full year
11
Section 4
Preliminary Financing Plan and Parameters
Preliminary Financing Plan and Parameters
Earlier Case Revised Case
(Current)
Interest Rate 13.5% p.a. 15% p.a.
Loan Tenure:
- Grace
- Repayment
10 years
3 years
7 years
10 years
4 years
7 years
Debt to Equity Ratio 80 : 20 75 : 25
DSRA 3 months 4 months
DSCR (min) 1.5 times 1.5 times
Indicative Salient Terms
13
Preliminary Financing Plan and Parameters (Cont’d)
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
Source & Application of Funds
14
Section 5
Sensitivity Analysis & Project Economics
Sensitivity Analysis
16
Adverse Case Best Case
(Potential Case)
Total Projected Toll Revenue Reduce by 8% or PKR
703.3 bill
(As per NHA case /
Minimum Traffic Assurance)
As per Revised Case or
PKR 745.7 bill
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
Project Economics
SUMMARY OF FINANCIAL RESULTS Revised Adverse Best / Potential
Total Revenue (PKR ‘Million) - Toll Revenue
- Other Revenue (Ancillary Incomes)- NHA Revenue Sharing
745,717.0764,848.7 15,297.0
(34,428.7)
685,761.3703,356.5 14,067.1
(31,662.3)
807,757.6765,701.476,484.9
(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:- Commercial Loan
- Equity
22,625.516,969.85,655.7
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
19
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