Project Carbon
An international manufacturer of patented infrastructure products － with existing facilities in Europe serving the water and oil & gas industries － is keen on setting up manufacturing facilities in the GCC region.
The client has spent extensive resources in de-risking the opportunity and was contemplating which option was best to enter the GCC market: joint-venture agreement with local players, third-party direct equity investments, or commercial bank debt.
Complication
Carbon engaged Cornerstone to weigh all three avenues and recommend the best option to fund the new venture.
Approach
A detailed operating financial model was created, taking into account the required adjustments in cost structure related to human capital, cost of energy, and utilities. Multiple scenarios were developed based on the three options with numerous sensitivity analyses.
Results
Carbon’s five-year business plan was developed taking into account quantitative and qualitative factors to arrive at an optimized capital structure. The developed plan enabled the client to obtain preliminary approvals from a government funding agency and two commercial banks and receive several offers for a joint-venture opportunity