NEXIM Bank_ECOWAS Sealink Initiative
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Transcript of NEXIM Bank_ECOWAS Sealink Initiative
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Regional
Sealink
Project
Presented by AIMS Ltd, Ghana July 2011
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Regional
Sealink
Project
Outline
of
Presentation
1. PurposeofStudy
.
3. ValueProposition
4. Mission&
Vision
. es re esu t
6. ImplementationofProject
7. SpecialPurposeVehicle
a) Transitionto
Implementation
b) Tasks
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Regional
Sealink
ProjectPurpose
determine the viability of improving regional maritimeservices by the establishment of a coastal maritime
s pp ng serv ce w c t s ocument s a re er to as
Transnational Regional Maritime Shipping Company
(RMSC).
RMSC is designed to provide cabotage1, including both
passenger and freight services, interconnecting West
an en ra r can a es. e o ec ve s o mprovethe frequency of maritime services which will enhance
commerce in and between the two regions.1. Cabotage:Therighttooperatesea,air,orothertransportationservices
within
a
particular
territory.7/26/2011 3
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Regional
Sealink
Project
TheProject fallswithin themandateofNEXIM,which is
Background
to support to the Nigerian Private Sector. Under the
NEXIM Trade Support Facility the broad objectives,
amon others are to:
IncreaseNigeriastradeflowfromcurrentlevels;
Deepenthe
payment
system;
Enhancecapacitybuildingininternationaltradeand
project financestructuring;
Createjob
and
investment
opportunities
thereby
meeting the Federal Government economic reform
a endaof overt alleviation.
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Regional
Sealink
ProjectBackground
NEXIMis
acatalyst
in
the
creation
aregional
trade
andacompetitiveedgeexistsinthedevelopmentof
t emar etp ace yprov ngc anne s orreg ona
integration;
and the ECOWAS Bank for Investment and
Development;
The
Project
is
supported
by
the
West
African
Chambers of Commerce and Private Sector
.
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Regional
Sealink
ProjectBackground
The lack of adequate transportation among states in
peopleandcrossbordertradingquiteprohibitive. These
costsare
a
barrierto:
eg ona ntegrat on;an Freemovementofpersonsandgoodsinthesub
region.
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Regional
Sealink
ProjectBackground
Presently, thecostofshippinggoodsbyseaalong
,
instances, goods between West African
destinations
are
transshipped
through
Europe
orout r ca ecauseo t enonex stenceo rect
coastalsealinks.
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Regional
Sealink
ProjectBackground
Costs are related to excessive transit time make Africa
exportersnoncompetitive.TheseconstraintsmakeWest
Africa transportand logisticscostsoneof thehighest in
.
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Regional
Sealink
ProjectBackground
feasibility
of
a
coastal
shipping
company
operating
between the ECOWAS members. Attempts at
mp ementat on o coasta serv ces, owever, ave een
unsuccessful due to a variety of reasons which include,
butare
not
limited
to:
Undercapitalization;
Mismanagement;or .
It isnowgenerallyagreedthattheprivatesectorshoulddrivetheintegrationprocess.
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RegionalSealinkProject
Background
The Regional Sealink Project feasibility study has been
Ltd. Ghana (AIMS) at the Request of the Nigerian Export
Import Bank (NEXIM). The contract to undertake thestudy was signed on February 24th 2011. There are two
components to this study:
1 Technical Feasibilit and a
(2) Business Plan.
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RegionalSealinkProject
Mission &Vision
Mission
RMSC will complement and improve existing
transportation services offered by airlines, trucking
and the alternative of ocean transport routes plied
by
modern
efficient
multipurpose
vessels
designed
orreg ona an n erreg ona ra e.
Vision
maritimepassenger
and
freight
services
as
acatalyst
to trade development in and between the sub
reg ons ecom ng e oremos carr er n ereg ons.
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ValueProposition
Presentlythe
inter
regional
maritime
coastal
trade
is
servicedbyinadequate,unsafe,oldvesselswithout
regardtopassengersafety.
RMCSis
offerin
asafe
secure
modern
fleet
with
experiencedinternationalmanagementwhichshould
havethecapacitytocompeteeffectivelyinthe
.
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RegionalSealinkProject
ValueProposition
Theunderlyingtechnicalaspectsofthisbusinessare
reviewedatlengthintheTechnicalReportonRegional
.
Employmodernsecuremultipurposevesselsthat
carrypassengers,
freight
and
vehicles.
Takeadvantageofmoderncommunicationstoassurepassengersafetyandthesharingofinformation
re a ng
osc e u ng.
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RegionalSealinkProject
ValueProposition
RMSCalso
is
offering
the
combination
of
passengers
and
cargo,whichisanattractivepropositiontowomentraders
inparticularwhoaremorecomfortableaccompanying
theirgoods.
Maritimetransportderivesitscompetitiveedgebyitscapacitytocarrylargercargosthantrucksandairlinesat
.
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RegionalSealinkProject
DesiredResult
delivering excellent cabotage services to West and
CentralAfrica
on
aregular
reliable
scheduled
service.
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RegionalSealinkProject
DesiredResult
RMSCwill:
Open
initial
service
at
10
ports
with
combined
passengerandfreightservices;
demand;
Offerease
of
market
accessibility;
Respon to t e growt o reg ona mar ets oo
securityaspirations;and
Provide greater mobility of goods, persons and
services.
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RegionalSealinkProject
Implementation
ManagementStrategy
ManagementStructureisthatofaprivatelimitedliability
internationalexperienceincabotage.
It
is
structured
to
incorporate
an
internationally
recognized technical partner capable of managing the
routing,maintenanceandothertechnicalmattersrelated
.
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RegionalSealinkProject
Implementation
Mar et ngStrategy:
Recognizeandpenetratethepotentialmarket
.
Includethedevelopmentofanadequatebudgetto
coveradvertising
and
public
relations.
Focusonexternalcommunicationsthroughvariousformsofmediaaswellasdirectsalesefforts.The
n t a
t rust
s
es gne
toga n
customer
con ence;
Assurethattheimageisoneofsecurity,safetyand
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RegionalSealinkProject
Implementation
Theportrayal
of
avalue
for
money
proposition
:
qualityoftheproductand fareschargedbyinformalvesselsandairtransport.
Pricing
Formula:xe pr ceper ome reus ngparame erso :
Distance, Price,
Product,
and
Quantity.
demand.7/26/2011 20
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RegionalSealinkProject
ImplementationofProject
RoutingStrategy ThreeMajorMarketSegments:
Segment1:
FreetownConakr BissauBan ulDakar Combined
freightandpassengercabotage
Segment2:
CotonouCa a arDoua aLi revi e
Combinedfreightandpassengercabotage
Libreville DakarFreightOnly majorportsinrange
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RegionalSealinkProject
ImplementationofProject
FinancialStrate :
Initial
investment
of
$36,000,000
is
anticipated
to
take3yearstobefullypaidin.
,
organizedandfamiliarwiththevagariesofthe
business. Profitismadeinyear3showcontinuestoshowa
profitthroughyear7.
Cashflowsremain ositiveindicatin theca acit of
thebusiness
to
respect
it
financial
engagements
IRRisanticipatedat57%overthe7yearperiod
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RegionalSealinkProject
ImplementationofProject
The Pro ected Balance Sheet demonstrates that the
company
can: Withstand shocks such as civil strife or natural
disastersafteryear3.
Pay
dividends
from
year
5
(if
acceptable
to
the
.
Respect long term obligations related to the initial
urchaseoftheshi swillbe aidoffb the ear7.
Have sufficient strength to selffinance additionalvesselstomeetdemandfromyears4and5.
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RegionalSealinkProject
ImplementationofProject
$
36,000,000
to
purchase
vessels,
equipment,
office
spaceandotherinfrastructure
, , w v
administrativecosts
Financin Needs:
Equity $36,000,000
DebtFinancing $24,000,000
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RegionalSealinkProject
SpecialPurposeVehicle TransitiontoImplementation
Management,
QualifiedTechnicalPartner,
FinancingfortheRMSC.
It is recommended that a S ecial Pur ose Vehicle SPV
namedSealinkPromotionCompanyLimited
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RegionalSealinkProject
SPCL as the founder it will be absorbed b the RMSC
SpecialPurposeVehicle TransitiontoImplementation
onceestablished:
PrivateSectorBusinesses,ShippingCompanies,PortAuthorities, and International Financial Institutions
willbeaskedtofundtheSPCLwiththeexitstrategy
of
it
becomin
the
Re ional
Maritime
Shi in
Company(RMSC);
Funding of the SPV is distinct from funding the
RMSC;
Estimated funding requirements for SPV is $1.5.
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RegionalSealinkProject
SpecialPurposeVehicleTasks
Incorporateand
Raise
Funds
for
RMSC SetuptheHoldingCompanyandAffiliates.
en yan e ec anagemen eam IdentifyandSelectTechnicalPartners
InitiateAcquisition
of
Vessels
IdentifyandSelectCountryLocation RegisterofRMSC
DesignProcedures
for
Good
Governance
IdentifyandSelectInitialInvestors
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RegionalSealinkProject
(SPCL)becreatedto:
SpecialPurposeVehicleTasks
NegotiatewithGovernmentAgenciesandPort
Authorities
additionalexperience
Modifyand
Update
Technical
Report
based
on:
P anne reg ona mprovemento t eports,
Needs related to setting up the loading
procedures,
Interaction
between
uniformed
services
such
ascustoms,immigrationandpolice
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RegionalSealinkProject
SpecialPurposeVehicleTasks
IncorporationRequirements
ShareCapital Cost Timing
Name Shareholders
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RegionalSealinkProject
SpecialPurposeVehicleTasks
Thank You
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