Days 1 & 2:
- Structuring cross-border telecom projects and accessing the most competitive funding
- Financing wireless / mobile, wire-line projects and satellites
- Key regulatory and legal issues
- Accessing bank and bond markets for telecom transactions
- Working with export credit agencies and multilateral institutions
- Vendor financing for projects
- Cross-border equipment leasing
Day 3:
- Investor considerations in valuing telecommunications’ licenses and companies
- Estimating value of on-going operations in volatile markets
- Strengths and limitations of different valuation techniques (DCF, trading and change of control multiple analysis, real options, emerging market premia in cost of capital etc.)
- How merger and acquisition strategies affect valuations
Course Background
This 3-day workshop will increase participants' understanding of the process leading to the creation of a suitable financial structure for various types of cross-border telecom projects and transactions, from wireless/mobile to fixed wire-line transactions and satellites.
Lessons and examples are drawn from around the world. Emphasis is placed upon understanding the objectives of the various participants in telecommunications deals and how their goals may vary over time. In difficult markets credit enhancement techniques and alternative funding sources are also critically important. Traditional Export Credit Agency, Multi- and Bi- lateral Agency support, as well as tailored private sector political and commercial shifting and funding mechanisms and programs are explained.
The hands-on workshop nature of this program will first allow participants to develop a framework for recognising, and analysing risks in telecom projects. Case studies also look at investor considerations in valuing telecommunications deals, to estimate values of operations and companies as they trade in volatile markets.
Who Should Attend?
- Telecom Operators
- Equipment Vendors
- Investment Bankers
- Corporate Banking Officers
- Project Finance Managers
- Financial Analysts
- Business Development Managers
- Financial Consultants
- Investment Managers
- Legal Advisors
- Venture Capitalists
Supported by:
Day 1
Themes:
Allocating risks in transactions
Searching for efficient financing alternatives
Financing a mobile start-up
Refinancing mature companies
International project finance and the telecom sector
- Telecommunications transactions: Industrialised and countries in transition
- Players: outlooks and objectives
- Phases in of a project and capital formation
- Examples of different types of projects
- Wire-line, wireless / mobile, satellites
- Lessons of 3G? Prospects for emerging 4G technologies?
Telecoms projects: risk identification and allocation
- License and / or concession acquisition:
- Understanding the allocation process
- Financing approaches and issues through start-up
- Build out delays / cost overruns
- Penetration levels / revenue per line
- Increased competition
- Technology changes
- Secondary sources of repayment
- Foreign exchange exposure
- Political risks
Sources of finance: a financing checklist
Traditional and contemporary sources of finance: domestic and international bank loans
- Bank participation in the sector through syndicated loans:
- Primary and secondary distribution
- Pricing, flexibility, timing
- Participation, assignment, and innovation
- What security do banks need?
- Offshore accounts and trustees
- Mortgages on fixed assets / contract assignments
- Bridge-financing projects
Workshop: cash flow modelling and credit assessment
- Building cash flow models: forecasting techniques and limitations
- Perspective of the investors vs. creditors
- Sensitivity analysis vs. Monte Carlo simulations
- Examples
Case study:
Participants will break into small groups to prepare a case study concerned with build-out and operation of a mobile telecom and data system. A cash flow simulation model will be used in assessing market risk.
Day 2
Themes:
Legal issues in telecom finance
Capital markets availability
Accessing the significance of political and other risk support for telecoms projects
Introduction to valuation issues
Case discussion: Mobitel S.A.
Key legal considerations in financing telecommunications projects (legal guest speaker)
- Considering legal climate
- Dispute resolution alternatives
- Structuring considerations
- Important inter-creditor issues
- What can go wrong?
Financing in capital markets
- Capital markets meltdown for telecom projects
- Rating agency criteria
- Emerging markets examples: telecom receivables securitisation
- Credit enhancement
Sources of risk support
- Export credit techniques
- Agency guarantees and insurance
- Funding and interest equalisation
- Bank incentives inherent in ECA programs
- Costs and availability
- Development banks and their programs to support debt and equity investment funds
- Private sector insurers and risk support
Case study: Financing fibre optic cable.
Participants break into small groups to negotiate terms of a project refinancing.
Day 3
Theme
Telecommunications’ valuations approaches
Telecommunication projects from the investor standpoint
- Overview of alternative valuation approaches:
- DCF – Discounted cash flows
- Multiples: P/E ratios, EBITDA, etc.
- Common mistakes in applying different models
- Special factors for telecommunications
- Debt and leverage considerations
- Survey of who uses what tools and why
- What techniques will future business activity in telecoms demand?
Discounted cashflow valuation of a wireless companies
- Forecasting cash flows based on key operating parameters
- ARPUs, churn, customer Adds,
- Penetration rates
- Estimating a suitable cost of capital
- Country risk
- WACC, levered and de-levered beta
- Cost of debt
- CAPM
- Transactional issues impacting valuation
- Control premia,
- Marketability discounts
- Sensitivity analysis
- Assessing “data-centric” cash flows for future broadband services
Comparable multiple analysis of a wireless company
- Traded multiples of comparable companies
- Multiples of revenue, EBIT, EBITDA
- Free cash flow
- Subscribers, POPs, etc
- “Change of control” multiples
Case study:
Participants will look at a mobile operator’s business model, and use an Excel-based model to estimate value under different scenarios.
Summary and close
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Margaret Osius
Ms. Osius provides executive level training and advisory services to a wide variety of organizations worldwide. Specializing in international project finance, capital markets and risk management, she works with project developers, investors, equipment suppliers, private and development bank clients, law firms and others to structure viable financing for green-field projects and facility upgrades in the oil and gas, power, transport sectors. Prior to establishing her own firm Ms. Osius was at JP Morgan Chase Manhattan Bank where she structured export and international project transactions and advised clients on foreign exchange and other risk management issues. Earlier in her career, Ms. Osius was responsible for a team of credit analysts evaluating the quality of the bank’s distressed loan portfolio as well as that of its newly acquired affiliates. In that role she had extensive experience with workout. Ms. Osius has published articles in the business press and co-authored several selfstudy guides covering international project finance, trade and export finance, foreign exchange, and financial futures. The World Bank has published her views on approaches to financial analysis in emerging markets. She is a primary speaker in a series of video presentations created to cover the topic of Sound Banking Principles and Project Finance during executive sessions throughout the world.
Until 2007 Ms. Osius was Chairwoman of the Technical Advisory Panel of the Public Private Infrastructure Advancement Fund (PPIAF). The Fund provides technical assistance to encourage private involvement in infrastructure development. She received an M.B.A. from INSEAD, the European Institute of Business Administration, in France. Her B.A. degree is from Princeton University.
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