Refinancing the Western Harbour Crossing Hong Kong Case Solution

Addresses the operational phase of a project to private management in urban infrastructure, Hong Kong Western Harbour Crossing, a tunnel toll motorway West Kowloon to Sai Ying Pun on Hong Kong Island, developed as part of the prestigious AirPort Base supports the redevelopment of Hong Kong airport early and mid-1990s. The tunnel opened in 1997 and has underperformed since financially. Explore the hypothetical purchase of the tunnel as a portfolio of infrastructure assets by a leading bank acting for a group of private capital. The bank is also interested in the financing of long-term debt in a non-recourse/limited appeal to potential buyers. Visit the project economics, evaluation of the tunnel as a business to go, and the financing of the purchase, and discusses the merits of investing in it as a decision of the portfolio. Consider two companies / projects fundraising. First, as a fundamental function of the capital budget, the assessment considers the Western Harbour Crossing operations relating to its historical cost (“book value”) to highlight issues related to sunk costs and irreversibility current embodiment Capital structured as companies financed by the project. Second, the financing decision of the potential buyer and the approach that banks have in syndication very large financial commitments described very risky projects.
by
Maria Ho,
Frederik Pretorius
Source: University of Hong Kong
37 pages.
Date Posted: April 17, 2007. Prod #: HKU648-PDF-ENG
Refinancing the Western Harbour Crossing, Hong Kong Case Solution

Refinancing the Western Harbour Crossing Hong Kong Case Solution
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