Graphical Model for Financial Simulation of Spamusement PPP Projects

Summary of project assumptions

Source of funds Construction costs (VAT excluded, indexed on inflation)
Subsidies 30% Duration of works (years) 3 years
Equity 30% Year % Amount (MJPY)
Credit 40%
Nominal interest rate 6.0% 1 20% 196
Repayment period 20 years 2 60% 588
Grace period 3 years 3 20% 196
Capitalization 3 years 0%

Repayment of loan Linear 0%

Total in MJPY 980.00

Amortization 45 years

Tourist and Fees Operation costs (indexed on inflation)

Expected No. of tourists 22.6 1000 ppl/day Fixed part 100,000 kJPY per year
Tourists growth 5% per year Variable part 1.0 kJPY per tourist
Ticket Price (VAT include 6.0 kJPY per person
(VAT excluded) 5.0 kJPY per person Economic
(indexed on inflation) Inflation rate 4.0%
Initial daily revenue 113.4 kJPY / day Corporate tax rate 30%
(VAT excluded) VAT rate 19.6%
State discount rate (real terms) 4.0%
(nominal terms) 8.16%
400,000
Project IRR
(real/year50)
Equity IRR
(real/year50)
ADSCR
(min)
LLCR
(min)
PV (VAT +
Tax-Subsidies) WARNINGS
-0.34% 3.05% 0.00 -2.15 207,251

200,000 Equity Revenues Interests

Debt Shareholders account Taxes
Interest during Dividends Operating costs
construction Principal
Subsidies
Low Project IRR (< 8%)
0

Low Equity IRR (< 13%)

-200,000

Low LLCR (< 1.1)

-400,000

-600,000
COMMENTS:
* LLCR is low. Minimum acceptable LLCR is estimated by the lenders and depend on
project conditions and environment (e.g.political risk). Typical acceptable LLCR would
All figures in kUSD be above 1.1
-800,000 * ADSCR is low. Minimum acceptable ADSCR is estimated by the lenders and depend on
project conditions and environment (e.g.political risk). Typical acceptable ADSCR would
be above 1.1
Concession Construct. Operation Initial Daily Tourists
* Project Ticketlow.
IRR seems Price MinInvestment
Project IRR Equity
acceptable Debt
by projectInterest Grace
financiers depends onInflation Corporate VAT
life cost Cost Tourists
projectGrowth
conditionsVAT
and incl.typically
Subsidies
range between 8%maturity
and 25% Rate Period rate tax rate rate
* Equity IRR seems low. Min Equity IRR acceptable by project financiers depends on
project conditions and typically range between 13% and 25%

50 980,000 100,000 22.6 5.0% 6.0 30% 30% 20 6.0% 3 4.0% 30.0% 19.6%
 Project IRR
(real/year50)
Equity IRR
(real/year50)
ADSCR
(min)
LLCR
(min)
PV (VAT +
Tax-Subsidies) WARNINGS
60,000 -0.34% 3.05% 0.00 -2.15 207,251 0.00

Principal
50,000 Interests
-0.50
ADSCR
LLCR Low Project IRR (< 8%)
40,000
Limit
-1.00

30,000
Low Equity IRR (< 13%)

-1.50
20,000 Low LLCR (< 1.1)

All figures in kUSD -2.00

10,000

0 -2.50

COMMENTS:
* LLCR is low. Minimum acceptable LLCR is estimated by the lenders and depend on project conditions and environment
(e.g.political risk). Typical acceptable LLCR would be above 1.1
* ADSCR is low. Minimum acceptable ADSCR is estimated by the lenders and depend on project conditions and environment
(e.g.political risk). Typical acceptable ADSCR would be above 1.1
* Project IRR seems low. Min Project IRR acceptable by project financiers depends on project conditions and typically range
betweenConstruct.
Concession 8% and 25% Operation Initial Daily Traffic Toll rate Investment Equity Debt Interest Grace Inflation Corporate VAT
* Equity IRR
life seems low.
cost CostMin Equity IRR acceptable
Traffic Growth byVAT
project
incl. financiers
Subsidies depends on project conditions
maturity Rateand typically
Period range rate tax rate rate
between 13% and 25%

50 980,000 100,000 22.6 5.0% 6.0 30% 30% 20 6.0% 3 4.0% 30.0% 19.6%
 Project IRR
(real/year50)
Equity IRR
(real/year50)
ADSCR
(min)
LLCR
(min)
PV (VAT +
Tax-Subsidies) WARNINGS
0 -0.34% 3.05% 0.00 -2.15 207,251 1200.00%

Dividends
1000.00%
-50,000 Equity
project IRR (real) Low Project IRR (< 8%)
equity IRR (real) 800.00%
-100,000

Low Equity IRR (< 13%)

600.00%

-150,000
Low LLCR (< 1.1)
400.00%

-200,000
200.00%

All figures in kUSD

-250,000 0.00%
COMMENTS:
* LLCR is low. Minimum acceptable LLCR is estimated by the lenders and depend on project conditions and
environment (e.g.political risk). Typical acceptable LLCR would be above 1.1
* ADSCR is low. Minimum acceptable ADSCR is estimated by the lenders and depend on project conditions and
environment (e.g.political risk). Typical acceptable ADSCR would be above 1.1
* Project IRR seems low. Min Project IRR acceptable by project financiers depends on project conditions and typically
rangeConstruct.
Concession between 8% and 25%Initial Daily
Operation Traffic Toll rate Investment Equity Debt Interest Grace Inflation Corporate VAT
life * Equitycost
IRR seemsCost
low. Min Equity
Traffic IRR acceptable
Growth by incl.
VAT project Subsidies
financiers depends on maturity
project conditions
Rate and Period
typically rate tax rate rate
range between 13% and 25%

50 980,000 100,000 22.6 5.0% 6.0 30% 30% 20 6.0% 3 4.0% 30.0% 19.6%
Summary of Assumptions and Results
SUMMARY OF THE MAIN ASSUMPTIONS

GENERAL TOLL AND TRAFFIC

Concession life 50 years Toll, VAT included 6 USD per vehicle
Construction Period 3 years Initial traffic 22,600 vehicles / day
Construction costs 980,000 kJPY Traffic growth 5.0%
Amortization 45 years

FINANCIAL STRUCTURE OPERATING COSTS

Subsidy 30% of the construction costs Fixed part 100,000 kJPY per year
Equity 30% of the construction costs Variable part 1 USD per vehicle
Debt
Maturity 20 years OTHER KEY PARAMETERS
Interest rate 6.0% Inflation rate 4.0%
Grace period 3 years Corporate tax 30.0%
Repayment of loan P+I constant VAT rate 19.6%

SUMMARY OF THE RESULTS

FINANCING PLAN
Uses (in kJPY) 1,099,119 Sources (in kJPY) 1,099,119
Construction costs (nominal terms) 1,060,294 Investment subsidy 318,088
Capitalised Interests 38,825 Equity 318,088
Debt 462,943

FINANCIAL RATIOS SHAREHOLDERS' RETURN

Minimum ADSCR (Annual Debt Service Coverage Ratio) 0.00 Project IRR after tax (real terms) -0.34%
Minimum LLCR (Loan Life Coverage Ratio) -2.15 Project IRR after tax (nominal terms) 3.65%
Minimum PLCR (Project Life Coverage Ratio) 0.04 Equity IRR (real terms) 3.05%
Equity IRR (nominal terms) 7.17%
PUBLIC AUTHORITIES' FINANCIAL FLOWS
PV on Subsidy (kJPY) -271,903
PV on the VAT (kJPY) 409,526
PV on the Coporate Taxes (kJPY) 69,628
PV on the State revenues (kJPY) 207,251