1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Presold Capacity
Anticipatory Sales
Total Revenue

0
0
0

0
0
0

Net Operating Costs

EBITDA
EBITDA Margin

0
0

0
0

40
16.2
56.2
20%
11
45.2
80%
24.7%
47.5
25.3
-27.6
-18.40%

40
30.8
70.8
17%
12.2
58.6
83%
9.4%
47.5
9.6
1.5
-0.80%

40
43.9
83.9
16%
13.6
70.3
84%

40
55.7
95.7
16%
15.4
80.3
84%

40
66.3
106.3
16%
17.4
88.9
84%

40
85.5
125.5
16%
19.9
105.6
84%

40
119.9
159.9
14%
22.9
137
86%

40
150.9
190.9
14%
26.5
164.4
86%

47.5
0
22.8
12.10%

47.5
0
32.8
17.50%

47.5
0
41.4
22.10%

47.5
0
58.1
31%

47.5
0
89.5
47.70%

47.5
0
116.9
62.30%

Base Case

Depreciation
Net Interest
Profit Before Tax
ROE (on US$ 150 M)

3.7%
0
3.8
-3.8
-2.50%

11.0%
0
11.3
-11.3
-7.50%

20
0
20
50%
10
10
50%
51.2%
47.5
52.5
-90
-60%

0
-50
-50
0
$293.56
27%

0
-100
-100
0

300
-700
-550
0

493
-100
363
0

268.7
-47.5
209
0

236.8
-47.5
175.7
47.7

177.1
-47.5
114.3
114.3

159.4
-47.5
94.5
94.5

287
-47.5
219.5
219.5

516.6
-47.5
446.1
446.1

464.9
-47.5
338.4
338.4

0
0
-3.8
-2.50%

0
0
-11.3
-7.50%

0
20
10
-90
-60%

-4.1%
54
43.5
-31.3
-20.90%

-6.1%
66.7
54.5
-7.1
-4.70%

-8.7%
77.2
63.5
9.6
6.40%

-11.3%
86
70.7
18.5
12.40%

-12.5%
94.5
77
23.6
15.80%

-13.6%
110.5
90.6
34.5
23%

-13.5%
140.9
118
56.4
37.60%

-12.4%
169.8
143.3
76.7
51.10%

0
0

0
0

0.0%
20
10

1.2%
56.9
45.9

2.4%
72.5
60.3

20.6%
101.2
87.5

60.8%
153.9
138.5

101.8%
214.5
197.1

99.9%
250.9
231

79.7%
287.3
264.4

69.6%
323.7
297.2

Cash Flow
Cash Receipts
Capital Expenditures
Free Cash Flow
Dividends
13% NPV
IRR

Downside Scenario
Total Revenue
EBITDA
Net Income
ROE (on US$ 150 M)

Upside Scenario
Total Revenue
EBITDA
Net Income
ROE (on US$ 150 M)

-3.8

-11.3

-90

-26

4.1

32

72.8

119.7

146.8

173.5

199.7

-2.50%

-7.50%

-60%

-17.40%

2.70%

21.30%

48.90%

79.80%

97.90%

115.70%

133.20%

102.5

2000

2001

2002

2003

2004

2005

2006

2007

2008

Base Case
Presold Capacity
Capacity sold (Gbit)
Anticipatory Sales
Total Revenue

0
0
0

56.17
2.1
0
56.17

56.17
2.1
0
56.17

56.17
2.1
88.29
144.45

56.17
2.1
2267.77
2323.94

56.17
2.1
2040.99
2097.16

56.17
2.1
1836.89
1893.06

56.17
2.1
1836.89
1893.06

56.17
2.1
1836.89
1893.06

Net Operating Costs

EBITDA
EBITDA Margin

0
0
0%

10.99
45.17
80%

9.68
46.49
83%

23.42
121.04
84%

373.97
1949.97
84%

343.28
1753.88
84%

300.17
1592.89
84%

271.11
1621.95
86%

262.79
1630.27
86%

Depreciation
Net Interest
Profit Before Tax
30% Tax @ 30%
PAT
85 ROE (on US$ 85 M)
NWC

0
0
0
0
0
0
0

30.33
33.70
-18.86
-5.66
-13.20
-0.16
0

30.33
28.08
-11.93
-3.58
-8.35
-0.10
0

32.00
36.97
52.07
15.62
36.45
0.43
0

33.67
27.73
1888.58
566.57
1322.00
15.55
0

33.67
18.48
1701.73
510.52
1191.21
14.01
0

33.67
9.24
1549.98
464.99
1084.98
12.76
0

33.67
0.00
1588.28
476.48
1111.80
13.08
0

33.67
0.00
1596.61
478.98
1117.62
13.15
0

0
-455
-455.00
0
13%
$2,252.83
62%

17.13
0
17.13
0

21.98
0
21.98
0

68.45
-25
43.45
0

1355.67
-25
1330.67
0

1224.88
0
1224.88
0

1118.65
0
1118.65
0

1145.46
0
1145.46
0

1151.29
0
1151.29
0

Cash Flow
PAT+Dep-NWC

Cash Receipts
Capital Expenditures
Free Cash Flow
Dividends
WACC
NPV
IRR

2000

2001

2002

2003

2004

2005

2006

2007

2008

Base Case
Presold Capacity
Capacity sold (Gbit)
Anticipatory Sales
Total Revenue

0
0
0

56.17
2.1
0
56.17

56.17
2.1
0
56.17

56.17
2.1
82.50
138.67

56.17
2.1
2048.47
2104.64

56.17
2.1
1782.17
1838.33

56.17
2.1
1550.49
1606.65

56.17
2.1
1550.49
1606.65

56.17
2.1
1550.49
1606.65

Net Operating Costs

EBITDA
EBITDA Margin

0
0
0%

10.99
45.17
80%

9.68
46.49
83%

22.48
116.19
84%

338.68
1765.96
84%

300.91
1537.42
84%

254.76
1351.89
84%

230.10
1376.56
86%

223.03
1383.62
86%

Depreciation
Net Interest
Profit Before Tax
30% Tax @ 30%
PAT
85 ROE (on US$ 85 M)
NWC

0
0
0
0
0
0
0

30.33
33.70
-18.86
-5.66
-13.20
-0.16
0

30.33
28.08
-11.93
-3.58
-8.35
-0.10
0

32.00
36.97
47.22
14.17
33.06
0.39
0

33.67
27.73
1704.57
511.37
1193.20
14.04
0

33.67
18.48
1485.27
445.58
1039.69
12.23
0

33.67
9.24
1308.98
392.70
916.29
10.78
0

33.67
0.00
1342.89
402.87
940.02
11.06
0

33.67
0.00
1349.96
404.99
944.97
11.12
0

0
-455
-455.00
0
13%
$1,914.27
58%

17.13
0
17.13
0

21.98
0
21.98
0

65.06
-25
40.06
0

1226.86
-25
1201.86
0

1073.36
0
1073.36
0

949.96
0
949.96
0

973.69
0
973.69
0

978.64
0
978.64
0

Cash Flow
PAT+Dep-NWC

Cash Receipts
Capital Expenditures
Free Cash Flow
Dividends
WACC
NPV
IRR

2000

2001

2002

2003

2004

2005

2006

2007

2008

Base Case
Presold Capacity
Capacity sold (Gbit)
Anticipatory Sales
Total Revenue

0
0
0

56.17
2.1
0
56.17

56.17
2.1
0
56.17

56.17
2.1
102.56
158.72

56.17
2.1
2839.14
2895.31

56.17
2.1
2753.97
2810.13

56.17
2.1
2671.35
2727.51

56.17
2.1
2671.35
2727.51

56.17
2.1
2671.35
2727.51

Net Operating Costs

EBITDA
EBITDA Margin

0
0
0%

10.99
45.17
80%

9.68
46.49
83%

25.73
132.99
84%

465.91
2429.39
84%

459.98
2350.15
84%

432.49
2295.02
84%

390.62
2336.89
86%

378.62
2348.89
86%

Depreciation
Net Interest
Profit Before Tax
30% Tax @ 30%
PAT
85 ROE (on US$ 85 M)
NWC

0
0
0
0
0
0
0

30.33
33.70
-18.86
-5.66
-13.20
-0.16
0

30.33
28.08
-11.93
-3.58
-8.35
-0.10
0

32.00
36.97
64.03
19.21
44.82
0.53
0

33.67
27.73
2368.00
710.40
1657.60
19.50
0

33.67
18.48
2298.00
689.40
1608.60
18.92
0

33.67
9.24
2252.11
675.63
1576.48
18.55
0

33.67
0.00
2303.23
690.97
1612.26
18.97
0

33.67
0.00
2315.22
694.57
1620.66
19.07
0

0
-455
-455.00
0
13%
$3,205.21
71%

17.13
0
17.13
0

21.98
0
21.98
0

76.82
-25
51.82
0

1691.27
-25
1666.27
0

1642.27
0
1642.27
0

1610.15
0
1610.15
0

1645.93
0
1645.93
0

1654.32
0
1654.32
0

Cash Flow
PAT+Dep-NWC

Cash Receipts
Capital Expenditures
Free Cash Flow
Dividends
WACC
NPV
IRR

Presales
Contract time
Per year contract
Gbit/s
Market sales

Gbit
Price

Gbit
Price

Gbit
Price

Base Year
Yr
Unmet demand
Existing capacity
Pre sold
Remaining
Can be added
Hw much to add
Remaining capacity
Total capacity

337
6
56.16667
2.13

$
yrs
$
per yr

145 $
4 yrs
36.25 $
2003
2004
21.38
19.24
42
153
40
40
2.13
2.13
37.87
37.87
4.13
115.13
40
40
-35.87
75.13
80
120
88.3
2267.8

Presales debt
Market sales
Total debt
Interest
Interest expense

2005
17.32
303
40
2.13
37.87
265.13

2006
15.58

120
2041.0

120
1836.9

2.13

Downside Year
Yr
Unmet demand
Existing capacity
Pre sold
Remaining
Can be added
Hw much to add
Remaining capacity
Total capacity

2003
19.98
42
40
2.13
37.87
4.13
40
-35.87
80
82.5

2004
17.38
153
40
2.13
37.87
115.13
40
75.13
120
2048.5

2005
15.12
303
40
2.13
37.87
265.13

2006
13.15

120
1782.2

120
1550.5

Upside Year
Yr
Unmet demand
Existing capacity
Pre sold
Remaining
Can be added
Hw much to add
Remaining capacity
Total capacity

2003
24.83
42
40
2.13
37.87
4.13
40
-35.87
80
102.6

2004
24.09
153
40
2.13
37.87
115.13
40
75.13
120
2839.1

2005
23.36
303
40
2.13
37.87
265.13

2006
22.66

120
2754.0

120
2671.3

2.13

2.13

Principle
presales interest
Market sales
Market sales
Sum interest

337
145
482
10%
48.2

33.7

2001
2002
2003
2004
2005
2006
56.16667 56.16667 56.16667 56.16667 56.16667 56.16667
33.70
28.08
22.47
16.85
11.23
5.62
Market sales
36.25
36.25
36.25
36.25
Market sales
14.50
10.88
7.25
3.63
33.70
28.08
36.97
27.73
18.48
9.24

90%
Base Scenario Prices
Average Price realized per Gbit
Particulars
2001
2002
Price/STM-1 in 2001 4@ (In Million
3.60 $)
Mbits/STM-1 @ 155.2
Mbits/Gbit/s @ 1024
Gbits/s per STM-1
0.151563
Sale of 1Gbit in Million
26.39 $
23.75

In USD Million
Depreciation Schedule
2000
2001
Total Assets in the455
beginning 455
CAPEX
0
0
Total Assets in the455
End
455
Estimated useful life15
(In years)
Depreciation Expenditure 30.33

2003
3.24

2004
2.92

2005
2.62

2006
2.36

21.38

19.24

17.32

15.58

2002
455
0
455

2003
455
25
480

2004
480
25
505

2005
505
0
505

30.33

32.00

33.67

33.67

5.4
4
1.2

35%
60%
70%

3.51
1.6
0.36

87%
Downside Scenario Prices
Average Price realized per Gbit
Particulars
2001
2002
2003
2004
Price/STM-1 in 2001
4.00@ (In Million
3.48 $)
3.03
2.63
Mbits/STM-1 @ 155.2
Mbits/Gbit/s @ 1024
Gbits/s per STM-1
0.151563
Sale of 1Gbit in Million
26.39 $
22.96
19.98
17.38

2006
505
0
505
33.67

97%
Upside Scenario Prices
Average Price realized per Gbit
Particulars
2001
2002
2003
2004
Price/STM-1 in 2001
4.00@ (In Million
3.88 $)
3.76
3.65
Mbits/STM-1 @ 155.2
Mbits/Gbit/s @ 1024
Gbits/s per STM-1
0.151563
Sale of 1Gbit in Million
26.39 $
25.60
24.83
24.09

2005
2.29

2006
1.99

15.12

13.15

2005
3.54

2006
3.43

23.36

22.66

Ans 1

Additional sponsors required =

[1]
Reason
[2]

Ans 2
Upside Case
Base case
Downside case
Ans 3

NPV
$3,205.21
$2,252.83
$1,914.27

IRR
71%
62%
58%

As per "Economic motivations for project finance" - HBS; below is th ecriteria for Project finance companies
Inside Directors
Grey Directors
Outside Directors

12%
83%
5%

Current Structure of AJC

Sponsors
No of Directors
Inside directors
1
Grey directors
10
Outside directors
1
Total
12

Telstra
Japan Telecom
Teleglobe
AT&T
NTT

Equity Stake No of Directors

40%
4
10%
1
10%
1
20%
2
20%
2

The incentive for the managers would be the percentage share of the company performance. (As it if divided in the a

AT&T
For confirming landing station at Guam
Good credit rating of AA-, helpful in raising debt

NTT
For confirming landing station at Japan
Good credit rating of AA+,helpful in raising debt

nance" - HBS; below is th ecriteria for Project finance companies

he percentage share of the company performance. (As it if divided in the appraisal forms: 60% company performance and 40% personal per

ce and 40% personal performance)