1 / 12

AfricaRail 2009 Johannesburg, 26th June 2009 Opportunities and risks facing

www.railworkinggroup.org. AfricaRail 2009 Johannesburg, 26th June 2009 Opportunities and risks facing asset owners, investors and governments Howard Rosen Principal, Howard Rosen Solicitors, Zug, Switzerland Chairman, Rail Working Group. Howard Rosen Solicitors. Introduction.

ericennis
Download Presentation

AfricaRail 2009 Johannesburg, 26th June 2009 Opportunities and risks facing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. www.railworkinggroup.org • AfricaRail 2009 • Johannesburg, 26th June 2009 • Opportunities and risks facing • asset owners, investors and governments • Howard Rosen • Principal, Howard Rosen Solicitors, Zug, Switzerland • Chairman, Rail Working Group Howard Rosen Solicitors

  2. Introduction www.railworkinggroup.org • Exploring rolling stock financing options • What is the government’s proper role? • Providing adequate security for financiers and the problems of identification • Different ways to build rail equipment into BOT structures • Allocating asset risk and ensuring viable contracts and partnerships Howard Rosen Solicitors

  3. Exploring rolling stock financing options www.railworkinggroup.org • Government “subsidies” and loans • Aid Agency/Export Credit Agency support • Using equity and cash flow • Debt finance • Unsecured • Secured • Leasing • Rolled into other financings Howard Rosen Solicitors

  4. What is government’s proper role? www.railworkinggroup.org • Shareholder conflicts of interest • Government financial support • When is state aid acceptable • The complexities of competition • Budgetary constraints and efficient resource allocation • Government as a supporter and facilitator Howard Rosen Solicitors

  5. Providing adequate security for financiers www.railworkinggroup.org • Is a government guarantee possible or acceptable? • Alternative security can constrain credit lines • Real asset based finance • means creating unimpeachable security • Local law and how “Luxembourg” will help Howard Rosen Solicitors

  6. The problems of identification www.railworkinggroup.org • Identification is essential to creating the security • ….. but there are serious problems at the moment • Differing reasons for identification • Who allocates the numbering and is it secure? • Notification of changes (avoiding reliance on debtor) • replication of numbers Howard Rosen Solicitors

  7. Different ways to build rail equipment into BOT structures www.railworkinggroup.org • The BOT consortium as the one stop shop • Convenient • Risk spreading but • Cross contamination risks for consortium and operator Howard Rosen Solicitors

  8. Different ways to build rail equipment into BOT structures www.railworkinggroup.org • Or is it better to deconstruct? • Can provide customised solutions and flexibility to operator • May maximise tax benefits • Facilitates multiple use of rolling stock • Focuses on credit lines and government support where absolutely needed Howard Rosen Solicitors

  9. Allocating asset risk www.railworkinggroup.org • What are the risks? • Asset valuation • obsolescence • Financing costs • Operating risks • Third party liabilities • Who should carry the risks? • Transferring risk • Buy backs and guarantees • Leases Howard Rosen Solicitors

  10. ….. and ensuring viable contracts and partnerships www.railworkinggroup.org • The secret of effective contracts • Defining agreements required • Specifying the parties • Applicable law • Identifying clearly the relationship and responsibilities • Establishing registrable security • Looking ahead Howard Rosen Solicitors

  11. www.railworkinggroup.org • The Opportunities and Risks (Conclusion) • Rolling stock financing comes in different shapes and sizes • Government can work better as a facilitator rather than a cash cow but this depends on true asset based financing • BOT structures are tremendously useful but sometimes deconstruction can help • And in the end it’s all about asset risk allocation and management; have the courage to seize the challenges and ensure governments support you Howard Rosen Solicitors

  12. www.railworkinggroup.org • AfricaRail 2009 • Johannesburg, 26th June 2009 • Opportunities and risks facing • asset owners, investors and governments • Howard Rosen • Principal, Howard Rosen Solicitors, Zug, Switzerland • Chairman, Rail Working Group • E-mail: howard.rosen@railworkinggroup.org • www.legalease.ch Howard Rosen Solicitors

More Related