Sales financing project is an innovative and timely technique that has been used in many high profile corporate projects such as the Eurotunnel.
Employing a carefully crafted financial mix, it has been used to finance large-scale natural resource projects, from pipelines and refineries to power generation plants and hydroelectric projects. Increasingly, the sales finance project is emerging as the preferred alternative to conventional methods of finance infrastructure and other large-scale global projects.
This alternative includes understanding the rationale for the sales financing project, such as preparing the financial plan, assessing the risks, designing the financial mix, and raising funds. Our office has the necessary knowledge base to advise you with:
The package of contractual instruments to support the sales financing project;
Matters related to the legal provisions of the country/government (Exim Bank) sponsoring the project;
Public-private infrastructure partnerships;
Public-private financial structures;
Lenders’ credit requirements and how to determine the project’s ability to borrow;
How to prepare cash flow projections and use them to measure expected rates of return;
Accounting and tax considerations;
Analytical techniques to validate project feasibility;
PEREIRASILVA ADVOGADOS’ expertise can assist you in your specific project, such as a mine, highways, railways, pipelines, power stations, ships, aircraft, hospitals or prisons, which will be repaid with the cash flow of the respective project. In this financing modality, the financier focuses mainly on the project’s assets and income in order to guarantee and service the financing.
In contrast to an ordinary borrowing situation, in the sales finance project the lender generally has little or no recourse against the assets of the borrower or non-project sponsors. In this case, the credit risk associated with the borrower is not as important as in an ordinary loan transaction. The most important thing is the identification, analysis and management of each risk associated with the project, aspects that are part of our advice and consultancy.