Risk Mitigation

 

 

Removing risk for the project owner or financier is key to providing liquidity for most projects. Important elements include, inter alia, business interruption, short term insurance cover most day to day risks experienced in projects.

 

More advanced cover is made available by Export Credit Agencies which provide comprehensive political and credit insurance for the project owner or financier: Political risk – in the event of any political related disturbances or nationalisation adversely affecting the investment, Currency expropriation (US Dollar payments from host country), Credit risk cover if the customer is a foreign government entity. ECAs typically cover 85% to 100% of the transaction value. By leveraging ECA funding we are able to allow the exporter to offer competitive rates of finance to the project according to OECD CIRR (e.g. 3% fixed pa in USD). Some ECAs also protect equity investments into supported projects

 

In order to augment risk cover we also engage with Private Market Insurers (e.g. Lloyds, Zurich, etc.) to provide additional or supplementary cover where required to protect the project owner or financiers interests.

 

Signature Capital provides structuring and advisory services to companies involved in cross border projects or transactions. We also leverage our relationships with leading specialist insurers and export credit agencies  to provide a wide range of investment risk products.

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We are also able to leverage financial bank guarantees from top tier banks in a manner that removes investor risk from investment into unstable or uncertain jurisdictions.

      Project Finance

 

 

Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors.

 

Usually, a project financing structure involves a number of equity investors, known as 'sponsors', as well as a 'syndicate' of banks or other lending institutions that provide loans to the operation. They are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors, a decision in part supported by financial modelling.

 

The financing is typically secured against financial guarantees but also against all of the project assets, including the revenue-producing contracts. In some cases project funding raised against suitable bank guarantees can be provided on a non-recourse basis.

 

Signature Capital leverages its relationships with financiers to secure funding for projects. Placements are determined by the nature of the project, risk profile and cost sensitivities related to project viability. Our typical sources of funding are:

• Banks (usually with suitable ECA or PMI risk mitigation)

• Capital Markets (e.g. Tradable bonds)

• Private Equity placements (Exclusive equity transactions)

• Raising capital against acceptable commercial bank guarantees. In some cases this can be structured to be non-recourse too.

      Structuring & Arranging

 

 

A key competence we possess is the ability to put all the pieces of the puzzle together in bringing a project to financial close. Collaboration between key stakeholders is required in order to expedite project success. This involves the active co-ordination of the following:

• Contractual negotiations with primary stakeholders including project owners, customers, financiers, underwriters, turnkey contractors and other project participants

• Structuring the transaction - determining milestones and connecting the parties & obligations in a manner that can be underwritten and financed

• Legal work including opinions, contracts and structures

• Financial modeling and evaluation including milestone based build models

• Structuring & arranging risk mitigation strategies

• Co-ordinating technical elements related to the scope of works including engineering services, technical specifications and equipment. This includes the establishment of clear milestones for project delivery.

• Liaising with banks for the delivery of (non-depletion) bank guarantees to funders

      Commercial Facilitation

 

 

Due to relationships that are developed in the course of doing this business, opportunities exist for Signature Partners to facilitate transactions between parties.

 

This facilitation service could either be related to the delivery of one or a few of the core services we provide (e.g. financing a transaction, introducing competent technical service providers) or it could involve our relationships between buyers and sellers of capital, goods or services. Examples of this include:

• Facilitating the sale of Kimberley West Diamond Mine

• Facilitating the sale of commodities such as chrome, coal and copper between existing clients

• Facilitating transactions on behalf of our subsidiary companies.

• Management of off-ledger financial resources.