Anglo-Bharat (AB): The Rubicon International Port Limited (RIPL) Dilemma

  • Reference: F-841-E

  • Year: 2007

  • Number of pages: 16

  • Geographic Setting: India, Reino Unido

  • Publication Date: Mar 26, 2009

  • Source: IESE (España)

  • Type of Document: Case

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Description

The commercial finance director of Anglo-Bharat (AB), a major oil and gas company based in London, UK, needs to recommend whether to invest an additional $150 million to expand a port project in India. Thus far, $480 million has been invested in the port, RIPL (Rubicon International Port Limited). The port, RIPL, is attached to another $600 million LNG (liquefied natural gas) re-gasification plant. If the investment is not made, AB runs the risk of having its assets in RIPL expropriated considering it would violate the agreement with the local Indian government. If the port expansion is initiated, the commercial finance director must decide whether to fund it through equity or debt. If he chooses project debt financing, he needs to determine whether it should be denominated in US dollars (USD) or Indian rupees (INR). This document should be used with an active excel.

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Keywords

Environment and Development Financial analysis Financial Assets Financial strategy Foreign investments Project management Valuation