The Pipeline Company: Financing for China’s MNGPP Harvard Case Solution & Analysis

In 2008, the Multinational Natural Gas Pipeline Project was sponsored by China National Group Corporation to undertake a major international infrastructure project in Asia. The Pipeline Company, a wholly owned subsidiary company of China National Group Corporation, took the lead in funding the project, which was required to be completed by the end of 2009 and established joint ventures with the host nations. Procurements and first investments were made, and payment would soon be due.

Nevertheless, there was a big difference between the estimated overall investment and the funds available. Numerous banks expressed interest in the pipeline job, but most required the sponsor to supply a guarantee for the endeavor’s loan. Some banks also asked for an increase in the capital ratio from less than 1 per cent to 20 per cent. The treasurer accountable for the funding of the job was now tasked with the problem of organizing the best way to fund the job.

Learning Objective: This case is suitable for credit management courses and project financing lessons at both the undergraduate and graduate degrees. It covers the role of government in joint ventures and corporate financing issues and project. The case should be of particular interest to MBA and EMBA students who have work experience in the world of business. After completion of the case, pupils will have the ability to research financing issues in the corporate world and develop insights into project financing and corporate financing.

The Pipeline Company Financing for China's MNGPP Case Study Solution

Examine mechanisms whereby project financing can be recognized with higher leverage and limited recourse to patrons; understand the threats of foreign investment and methods to mitigate the dangers through financing arrangements.

Publication Date: 07/14/2016

This is just an excerpt. This case is about Finance

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