Westmoreland Energy Inc.: Power Project At Zhangze China Harvard Case Solution & Analysis

Set in 1994, this case concerns a subsidiary of Westmoreland Coal, which considers only the start as an international partner and developer of the coal power plant in Zhangze, China. Boyfriend, electric power of the government agency, proposed build-operate-transfer (BOT) project financing, in which the energy of Westmoreland (WEI) will receive a refund within 20 years, and then exit. Internal rate of return on the project exceeds the target rate of Director General, although the project developer, Dorothy Hampton, is concerned about the various risks and compliance hurdle rate target. Problems for students are: risk assessment, evaluation of the target rate of return, to assess the model (which is given in the case),) and to recommend any changes to the structure of the deal, which could help WEI achieve their goals. If goals are: (1) the possibility of the students in the analysis of complex financial transactions with the investment positions of the various participants in the project (key tasks of risk analysis and evaluation), (2) illustrate the financial impact of debt and equity leverage (the focus on value creation and its sources, risk shifting, and wealth transfers), and (3) assess the characteristics and problems of project financing and development of projects in emerging economies. "Hide
by Robert F. Bruner, Reed Menefee, Andrew Maiman Source: Darden School of Business 26 pages. Publication Date: August 26, 1996. Prod. #: UV2411-PDF-ENG

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