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The Pipeline Company: Financing for China's MNGPP
內容大綱
In 2008, the Multinational Natural Gas Pipeline Project was sponsored by China National Group Corporation to undertake a major international infrastructure project in Asia. The Pipeline Company, a wholly owned subsidiary of China National Group Corporation, established joint ventures with the host countries and took the lead in financing the project, which was required to be completed by the end of 2009. Initial investments and procurements were made, and payment would soon be due. However, there was a large gap between the estimated total investment and the funds available. Numerous banks expressed interest in the pipeline project, but most required the sponsor to provide a guarantee for the project’s loan. Some banks also asked for an increase in the capital ratio from less than 1 per cent to 20 per cent. The treasurer responsible for the financing of the project was now tasked with the issue of arranging the most effective way to finance the project.
學習目標
This case is suitable for project financing courses and credit management courses at both the undergraduate and graduate levels. It covers project and corporate financing issues and the role of governance in joint ventures. It can also be used to discuss risks that banks face in financing projects and how to manage those risks. The case should be of particular interest to MBA and EMBA students who have work experience in the business world. After completion of the case, students will be able to<br><ul><li>explore financing issues in the corporate world and develop insights into project financing and corporate financing;</li><li>examine mechanisms through which project financing can be realized with higher leverage and limited recourse to sponsors;</li><li>understand the risks of foreign investment and ways to mitigate the risks through financing arrangements; and</li><li>appreciate the role of project financing in international investments by joint ventures.</li></ul>