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Case study.
SCL assist businesses in a variety of ways, ranging from providing objective informal advice to more in-depth independent specialist risk analysis and reports.
The following transaction is a real example of a company who needed
a formal risk analysis in order for them to make informed decisions in moving the business forward.
Key identifying features have been removed to protect confidentiality, however the full report is contained in an article written for the Global Trade Review and can be viewed in the article/download section (see last article on the list).
MideZinc (Case study 3 in the report) are a recently privatised base metal operation who wanted to raise its initial commercial financing. Solens Consultants (SCL) was approached for a risk analysis before moving forward.
Using QVS (Quantitative Valuation of Significance), a tool which SCL developed to provide banks with a means to meet their obligations under Basel II (see articles), the risk and reward relationship was assessed to determine the optimum pricing. The nature of the risks was also clarified, so that key issues to the success or failure of the finance transaction were identified.
Despite the wide number of variables, SCL was able to report that in MideZinc’s case the resulting Exposure at Default (EAD) profile demonstrated that the likelihood of a default was small (as shown in Figure 3).
The result was that the transaction was approved by the credit committee and is now moving forward accordingly.
EAD – Exposure at default, the exposure on the obligation at the time of default and expressed in a monetary amount.
DL – Default loss
SL – Secured loss
If you would like to discuss how SCL can use their expertise to help move your business forward, please contact the office.
Materials, Minerals & Mining;
Member of the Energy Institute;
Chartered registration with
the Engineering Council;
Registered with FEANI
(European Engineers)