Posts by: Kervin T

Re: Off-balance sheet Inventory Financing
Continuing on the discussion below, the supplier will legally and economically own those inventory. So its capital of the supplier and the repayment of the principal will not come from EBITDA / cash flow but from selling those inventory. So we will just pay interest but not the principal ever. So in... Read More
Go to post added 4 years ago
Crude Inventory Product Financing Arrangement
In a product financing arrangement with a crude trader, there is a free 30-day and another extended credit 30-day to match the inventory cycle of 60 days. The first 30-day is free while the last-30 days is not. So the last 30-day is an interest-bearing payable. Economically and legally, the trader s... Read More
Go to post added 4 years ago
Re: TEV
Let me illustrate with numbers. agreed equity Value = 500 debt = 80 minority interest = 20 Current Assets = 400 less: Current Liabilities = 200 (Actual) Net Working Capital = 200 less: agreed required Net Working Capital =50 excess working capital (treated as excess cash and deemed as ... Read More
Go to post added 5 years ago
Re: TEV
I understand the standard formula. But would the modified formula below I mentioned be logical? TEV = Debt + Equity + Minority less an agreed normal net working capital less excess cash and any excess of actual net working capital from normal net working capital is treated as excess cash The... Read More
Go to post added 5 years ago
TEV
Is this a good formula? Cash or Normal net working capital + Enterprise Value + Non-operating assets = Long-term liabilities or long-term Debt + Minority Interest + Equity + Non-operating liabilities + unfunded pension liabilities + preferred shares wherein: "Normal" net working capital = Curren... Read More
Go to post added 5 years ago
Re: Off-balance sheet Inventory Financing
Thanks. I agree with you except that the capital provider of that inventory will still legally own the inventory and can trade with it. So we are just buying it on demand. The structure is that there will be a flash sale and buyback to the capital provider after refining. So we don't need to worry a... Read More
Go to post added 5 years ago
Off-balance sheet Inventory Financing
How to account for off-balance sheet crude inventory financing in calculating initial investment in project IRR? Do we include or exclude the amount? If exclude, the Project IRR seems artificially high. If include, the Project IRR seems artificially low and negative.
Go to post added 5 years ago
Acquisition of assets
Would purchase price for the acquisition of assets normally include or exclude "inventory" since these are mostly spare parts of the main assets? or is it really a deal specific and normally a negotiating point whether to separate pay for the spare parts?
Go to post added 5 years ago
Re: equity IRR
Thank you. I got it. I guess its more of "labeling" since "cash dividends" is equal to "FCFE" in a scenario where controlling shareholders have access to it 100%.
Go to post added 5 years ago
Re: equity IRR
Then what kind of "cashflows" do you use to calculate project IRR and equity IRR?

The context here is that we will buy and control 100% of the share. and we do not increase the debt excessively since there is bank financing covenant anyway to make sure that would not happen.
Go to post added 5 years ago
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