nexim bank_ecowas sealink initiative

8/3/2019 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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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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ValueProposition

Theunderlyingtechnicalaspectsofthisbusinessare

reviewedatlengthintheTechnicalReportonRegional

.

Employmodernsecuremultipurposevesselsthat

carrypassengers,

freight

and

vehicles.

Takeadvantageofmoderncommunicationstoassurepassengersafetyandthesharingofinformation

re a ng

osc e u ng.

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ValueProposition

RMSCalso

is

offering

the

combination

of

passengers

and

cargo,whichisanattractivepropositiontowomentraders

inparticularwhoaremorecomfortableaccompanying

theirgoods.

Maritimetransportderivesitscompetitiveedgebyitscapacitytocarrylargercargosthantrucksandairlinesat

.

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DesiredResult

delivering excellent cabotage services to West and

CentralAfrica

on

aregular

reliable

scheduled

service.

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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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Implementation

ManagementStrategy

ManagementStructureisthatofaprivatelimitedliability

internationalexperienceincabotage.

It

is

structured

to

incorporate

an

internationally

recognized technical partner capable of managing the

routing,maintenanceandothertechnicalmattersrelated

.

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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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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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ImplementationofProject

RoutingStrategy ThreeMajorMarketSegments:

Segment1:

FreetownConakr BissauBan ulDakar Combined

freightandpassengercabotage

Segment2:

CotonouCa a arDoua aLi revi e

Combinedfreightandpassengercabotage

Libreville DakarFreightOnly majorportsinrange

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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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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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$

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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SpecialPurposeVehicle TransitiontoImplementation

Management,

QualifiedTechnicalPartner,

FinancingfortheRMSC.

It is recommended that a S ecial Pur ose Vehicle SPV

namedSealinkPromotionCompanyLimited

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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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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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(SPCL)becreatedto:


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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IncorporationRequirements

ShareCapital Cost Timing

Name Shareholders

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Thank You

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