Project Preparation in Asset Recycling
The legal and commercial structuring of a project involves defining the ownership model for project implementation, including allocation of roles and responsibilities, and risks between the Relevant…
The PPPRC Asset Recycling Section Executive Summary …
The government should approach the market sounding exercise to assess the following:Project viability: whether the proposed asset put up for recycling is viable (from private sector’s perspective);…
Governments considering asset recycling transactions may envisage bundling multiple assets of same asset class as part of a single asset recycling transaction.Key Parameters to Consider for Multi-…
The Relevant Authority should determine key commercial principles that will form the basis of the project structure and the project agreement; the commercial principles should ensure value…
The Relevant Authority should identify and allocate risks for the concession or lease arrangement as part of the transaction preparation. The objective is to ensure that specific risks are…
There are several variations as to how an asset recycling transaction undertaken by way of a concession or lease arrangement can be implemented. In this section, we discuss the following models:…
Valuation of the asset is conducted to estimate and determine the fair value of the upfront fee that a bidder may pay to the Relevant Authority (or any other form of consideration).This is a crucial…
The Relevant Authority should be required to disclose environmental requirements (permits, standards, etc.), risks, issues, liabilities, compliance status. Climate risk disclosure can help raise…
Besides the technical, commercial, financial and legal due diligence, other assessment includes accounting and tax due diligence, which should consider the following:Accounting due diligenceIdentify…
OverviewPrescriptive due diligence outputs are primarily focused on describing the legal aspects of structuring options in relation to the descriptive due diligence outputs.The output of the…
OverviewDescriptive due diligence outputs are focused on describing the current legal aspects relevant to the Relevant Authority and the asset as at the review date. This description is without…
Conducting due diligence with respect to the legal and regulatory context requires a review of the laws, regulations and policies affecting the Relevant Authority and the asset.Areas covered may…
Legal due diligence in connection with an asset recycling transaction preparation covers the main topics listed below.Review of legal and regulatory context (in relation to the laws, regulations and…
The financial due diligence should cover the analysis of the asset’s historical and projected financial performance. This will provide the Relevant Authority with an indication of the capital…
The coverage of the commercial due diligence process is represented in the diagram below:Figure 2: Commercial Due Diligence Coverage Demand/ Patronage/Traffic Assessment An assessment…
The objective of the technical due diligence is to identify potential technical issues with respect to the asset. This exercise should form the basis for determining the scope for management,…
table tr th, table tr td { border:1px solid #ffffff; padding:10px } The Relevant Authority should conduct asset due diligence as part of the transaction preparation leading up to the asset…
table tr th, table tr td { border:1px solid #ffffff; padding:10px } Advisory Services for an Asset Recycling ProjectFigure 1: Advisory Services for an Asset Recycling ProjectThe engagement of…
At the project preparation stage, the Relevant Authority should conduct the following activities:Recruit and engage advisors, including financial, technical, legal, and other advisors (such as,…
This document provides a set of step-by-step guidelines for relevant authorities to monetize existing assets by recycling them through long-term concession or lease arrangements. The development of…