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Project Development & Construction Financing

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Project Development & Construction Financing


(A) Introduction

Construction, real estate and property development sectors are often cash hungry and frequently require large amount of capital in
order to fund the construction works ongoing. From the deployment of workers to purchases of construction materials and machineries, and payment of consultant fees, which all need to be settled in a timely manner. The inability to quickly secure sufficient funding for your construction projects will often delay your works causing you to breach your contracts. Needless to say, most construction today rely heavily on seeking financing in order to keep the projects going and almost all of these financing are from the banks, albeit shareholders’ capital.

Under the 11th Malaysia Plan, a total of RM260 billion has been allocated from 2015 to 2020. This includes many development projects to upgrade the infrastructures, improve the public facilities such as new roads, upgrading of ports, upgrading of airports, and many others. Also, the construction industry will be given many boosts as well as to strengthen the economy as this is a sector which is very vibrant.

(B) Course Objective

• Learn to evaluate your construction of project financing
• Learn to conduct a feasibility study as well as construct a budget before you go ahead to get financing
• Learn the various conventional banking facilities available for Construction and Real Estate Companies
• Learn the other methods of financing your construction projects besides using conventional banking facilities
• Learn how you can go about financing larger projects including methodologies to mitigate their risks

(C) Who Should Attend

• Credit Officers, Executives, Senior Executives and Managers who need to know how to apply these tools in executing the facilities
to meet their goals
• Engineers, Accountants, Financial Controllers and General Managers must be able to evaluate and apply for the right
banking facilities
• CFO, COO, CEO, Directors and Businessmen must quickly assess the rewards and risks of a project

(D) Highlights of Coaching

• How banks assess your creditworthiness and how they extend financing to you for your projects
• How to use the numerous financial tools to determine the amount of financing you require as well as calculate your ability to service these loans
• How to construct a construction master budget to know the exact amount of money your project requires
• How to determine the best form of financing available and comparing the options for your construction projects and choose the most suitable one for your situation
• How to avoid financing mistakes and ensure that your project is
profitable even when you are using financing to fund your projects

(E) Date/Venue

Date: 18-19 February 2020 (Wed-Thu)
Time: 9AM - 5PM
Venue: Pullman Hotel, Bangsar

(F) Fees

Early Bird (before 21 Jan 2020) - RM1200
Special Offer (before 4 Feb 2020) - RM1400
Normal Fee - RM1600

* Fee includes course Notes, Lunch, Refreshments/ Tea Breaks, * Certificate of Attendance & 6% Government Service Tax

DISCOUNT
(i) 10% Overriding Discount for SST2u Loyalty Card members

(G) Course Features

DAY 1
Latest Development to Construction or Project Financing in Malaysia
• Opportunities available under the 11th Malaysia Plan and numerous methods of appraisal to justify application of these projects
• Expose to the Private Finance Initiatives
• Case Study: PECD, Ranhill Berhad & YTL Power

Understanding The Mathematics of Financing & Project Evaluation
• Understanding Interest Rates, Simple Interest, Compound Interest, Nominal Interest, etc
• Understanding NPV, IRR, etc
• Understanding Cost-Benefit Analysis, Discounted Cash Flow,Payback Method and Rate of Return on Investment

Real Estate Finance for Development Projects
• Introduction to Financing Development Projects
• Feasibility Study Example - Project Parameters
• Development Costs
• Debt Financing of Real Estate Projects
• Case Study: Master Budget on Construction of Factories

Application of Discount Cash Flow Technique
• Framework for Discounted Cash Flow (DCF) Analysis & DCF Methods for Gain and Return
• Net Present Value Method for Project Evaluation
• Net Present Value (NPV) Examples
• Internal Rate of Return (IRR) Method for Project Evaluation
• Sampled NPV and IRR Analysis
• Changing and Comparing Compounding Periods
• Deciding on a project

Financial Plans for Your Construction & Development Projects
• Introduction to Financial Plans for Construction & Development Projects
• Overall Costing of Project, especially a Rural Road
• Construction Loan Example
• Net Comprehensive Cash Flows for Sponsors and Lenders
• Plan and Manage a Cash Flow Account
• DCF Project Evaluation for Sponsor and Lender
• Display a Letter of Intent from the Government

DAY 2
Understanding Conventional Banking For Construction Projects
• Conventional Banking available today
• Conventional Loans versus Project Financing: What are the differences

Other Ways of Financing Lucrative Projects
• Why conventional banking today seem to be choosy and difficult these days
• Explore the reasons why most companies and banks use Project Financing as financing technique
• Examine the risks involved in typical Project Financing of industries
• Indicate the Project Financing structures and types of financing
• Case Study: Ekovest & Tracoma

Understanding & Comparing Options Available in Islamic Financing
• Review financing options and techniques of choice making on financial sources of funds
• Conventional vs. Islamic Financing
• Look into Bank loans or Bank Sukuks to finance these projects
• Learn from big boys on how to secure financing
• Case Study: M Vest, Sprint, Time Engineering Bhd, Jimah, Boustead, SMART, Sunifra

Bonus: Financing Large Construction Projects
• Using Your Current Account Statement to gauge for company’s performance
• Cash Management techniques to pile on cash
• Differentiating between private contracts and government contracts
• Constructing a Cash Budget to structure Financing requirements
• How to finance a government contract
• Understanding terms of Islamic Banking on Istina’ Facility
• Case Study: Ekovest Highway

Avoiding Mistakes to Complete Real Estate or Construction Projects
• Why contractors fail?
• Signs of brewing troubles in Project Financing
• Actions to avert failure and then earn profit

Applying the principles of Project Financing in a real situation
• Show a Rural Road Project financed by Asian Development Bank

Questions & Answers Session

(H) About Speaker

Agee Lee
- CONSULTANT/ EXPERIENCED EX-BANKER

Agee Lee has more than 22 years of experience in the commercial banking in Malaysia and has worked in Malayan Banking Berhad and seconded to Kwong Yik Bank Berhad in 1980 to set up a Legal Documentation Department.

He started as a trainee officer moving up to Branch Manager, Loan Manager managing Corporate and Commercial Loans and finally as Head of Loan Recovery Division bringing down NPLs to RM65m from RM800m. He also worked in a property development company, then constructing a condominium and Nilai 3, for 2 years, and involved in a manufacturing company before working for 2 years in a construction company, executing federal contracts on roads, schools and colleges, in Kota Kinabalu, Sabah.

Besides marketing and approving the commercial loans, he was instrumental in setting up the Loan Recovery Section supervising about RM1.9b NPLs and was involved in structuring loans and lecturing modules on debt collecting and legal documentation on securities for 13 years. His last appointment was with Hong Leong Bank Berhad in 2003/4 as Head of Remedial Management Department.

Agee Lee holds Honours Degree in Economics (major in Business Administration) from Universiti Malaya, Associate of Institute of Bankers (London), Diploma in Marketing Management (NPC) and Certificate in Financial Planning (MII).

He is now a Training Consultant for IBBM, MIA and Banks in Malaysia, Singapore and Vietnam. Currently he has been giving talks on practical topics that will boost skills and confidence of participants.

(I) Register/Contact

Email: U1NUY291cnNlIHwgZ21haWwgISBjb20=
Contact:
General (03 - 8082 3357)
Teo (011 - 3178 9203)
Logesh (012 - 503 0346)
Siti (012 - 383 8603)



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