FSIN POWER GENERATION WORKSHOP. Building strong Nations through modern finance.

Transcription

1 FSIN POWER GENERATION WORKSHOP Building strong Nations through modern finance.

2 CONTACT Sean McCoshen, President & Chairman CELL: Scott Carleton, Chief Executive Officer CELL: John Miswagon, VP Aboriginal Services CELL: THE USAND GROUP Main St Winnipeg, MB R3C 3Z3 2 THE USAND GROUP Copyright Statement 2013 THE USAND GROUP all rights reserved. The content on this document is protected by the copyrights of THE USAND GROUP or the copyrights of third parties and used by agreement. No part of any of the content of this document may be reproduced, distributed, modified, framed, cached, adapted or linked to, or made available in any form by any photographic, electronic, digital, mechanical, photostat, microfilm, xerography or other means, or incorporated into or used in any information storage and retrieval system, electronic or mechanical, without the prior written permission of THE USAND GROUP or the applicable third party copyright owner.

3 VISION The Usand Group exists to create professional partnerships with First Nation organizations and communities in order to facilitate full financial participation in the global economy. We aim to reduce reliance on external bodies for wealth creation by increasing internal management of Aboriginal resources THE USAND GROUP all rights reserved.

4 RESOURCE DEVELOPMENT SERVICES First Nation communities have boundless resource opportunities, but historically, unlocking this potential has been restricted due to a limited access to capital. The Usand Group can help rectify this situation by providing a number of methods to secure financing THE USAND GROUP all rights reserved.

5 OFFTAKE FINANCING & SEED FINANCING Offtake Financing: Usand can assist communities in negotiating a fundable offtake agreement with a reputable buyer. For example, a buyer may agree to purchase 1 million tonnes of potash annually for 20 years. An offtake agreement provides a guaranteed revenue stream to repay the financing. Seed Financing: Seed capital is used to get businesses off the ground and can be used for research and development, initial operating costs, and can attract other interested investors THE USAND GROUP all rights reserved.

6 JOINT VENTURES & EQUITY INJECTIONS Joint Venture: In a JV, each partner has some advantage to bring to the table. First Nations can provide access to land for development, while capacity to develop and manage such projects can be imported from established corporations. This is a partnership where profits are shared equally, and First Nations are offered more than just a commission. Equity Injection: An equity injection provides cash to help start a venture with a partner. Having more equity partners distributes the risk and is more beneficial to all involved. This method gives power back to communities by giving them capital at the table to negotiate and participate in equity THE USAND GROUP all rights reserved.

7 WHAT WE OFFER The Usand Team has extensive experience structuring deals for Indigenous communities in the Middle East and South and Central America. We have the ability to present the desires and needs of different cultures and facilitate a working relationship in a respectful manner. Usand can also help facilitate partnerships with reputable development companies who have the capacity for: LEED projects (Green Building Certification) Renewable Energy Construction (Wind Farms, Solar Projects) Preconstruction Services, including: Budget and Cost development Project Scheduling Construction Planning Risk Management Value Engineering (to examine design and construction alternatives) Procurement and Expediting THE USAND GROUP all rights reserved.

8 REFINANCING SERVICES Usand can also review all current debt that is owed to multiple institutions with higher interest rates, and subsume this debt under a new financing package at one low rate. This method serves to clean up your balance sheet by: Minimizing the number of institutions money is owed to Providing consistent and predictable monthly and annual payments Providing lower interest rates THE USAND GROUP all rights reserved.

9 LOW INTEREST RATE & EXTENDED AMORTIZATION By engaging in an intensive financial modeling process that is designed to identify sources of security, Usand can obtain interest rates as low as Prime (currently at 3%). Amortization periods can be negotiated up to 25 years, if necessary THE USAND GROUP all rights reserved.

10 USAND S CORE FINANCING APPROACH 1. Initial Discussion with Regional Manager 2. Engagement Agreement and Non- Disclosure Agreement 3. Bank Submission for Funding Request 4. Solidifying Financial Processes 5. Offer of Financing 6. Wrap-Up THE USAND GROUP all rights reserved.

11 STEP 1: INITIAL DISCUSSIONS Initial discussions about the USAND Process and various financing options are often accompanied by the option to sign a Non-Disclosure Agreement in order to facilitate an informationsharing relationship. In this way, USAND may be permitted to review financial documentation to better gauge the type of financing available THE USAND GROUP all rights reserved.

12 STEP 2: ENGAGEMENT AGREEMENT & NON-DISCLOSURE AGREEMENT The EA sets out the terms of our relationship and what inputs are required from each side. The NDA is a legal contract protecting the confidential and proprietary information of both parties, and facilitates an information-sharing relationship THE USAND GROUP all rights reserved.

13 STEP 2 CONTINUED: ENGAGEMENT WITH AN ACCOUNTING FIRM Through its vast network of professionals, Usand is also able to connect Aboriginal communities and organizations with Chartered Accountants who can assist in the development of internal financial processes THE USAND GROUP all rights reserved.

14 STEP 3: BANK SUBMISSION At this point, Usand will request specific organizational and financial documentation for review and submission. Usand has developed a streamlined submission process that submits your proposal to the Lender in an efficient and secure manner. We also engage the use of innovative applications to enhance communication and document-sharing efforts THE USAND GROUP all rights reserved.

15 STEP 4: SOLIDIFYING FINANCIAL PROCESSES Option for fully customizable Financial Laws. Document outlining Finance Committee policies that can be adopted into your Financial Law or as a separate policy. Relationship development through our networks THE USAND GROUP all rights reserved.

16 STEP 5: OFFER OF FINANCING After the Bank Submission, we will issue an offer of financing. This will outline certain outstanding credit and security documents to be obtained, as well as a list of Conditions needed for Closing THE USAND GROUP all rights reserved.

18 TRUE COST OF BORROWING 3% $6,620, Usand Interest Rate Range 5% $11,677, % 9% $17,214, $23,186, $20 Million dollars over 20 years at comparable interest rates 11% $29,545, $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000, THE USAND GROUP all rights reserved. Total Interest

20 Refinancing (Debt Consolidation) A refinance loan is set at the current Treasury Market Interest rate at the date of signing (up to 25 yrs if need be). The loan amount is generally calculated from Own-Source-Revenue streams (Tobacco tax / Gas tax Rebates, Band business Revenues, Trust Revenues, etc). Through this form of refinancing, you are able to pay off all your outstanding bills THE USAND GROUP all rights reserved.

21 PROJECT-SPECIFIC FINANCING These can include community development projects such as Personal Care Homes, or revenueproducing projects such as Gas Stations, Gaming Centers or Retail facilities. For these phases to proceed, Usand will identify repayment sources for each loan THE USAND GROUP all rights reserved.

22 Resource Development Financing Examples can include Mining, Forestry, Farming, Energy Development (Solar, Wind, Hydro Dams) or other development(s). This can be financed through traditional sources, equity injections, Joint-Ventures, etc THE USAND GROUP all rights reserved.

23 Thank You. Building strong Nations through modern finance.