Project Management
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Hoto Capital Project Management Life Cycle Process:
Hoto Capital offers practical & proven project finance & project management services that assist entrepreneurs to access funding from the funders and private equity investors.
The following project cycle illustrates the stages a project or business investment goes through as it is developed for investment purposes:
Stages of the Project Investment Life Cycle:
1. Business Development:
Guided by Department of Trade, Industry & Competition (“DTIC”) strategic policies, Hoto Capital teams of experts identify suitable projects across all key sectors that are in line with Industrial Participation Action Plan (IPAP) of DTIC. This process is pivotal in ensuring that the projects comply with the funder’s mandate.
2. Project Documentation:
Hoto Capital team of professionals prepares project documentation such as business plan, investment memorandum, necessary legal agreements, financial model, and all other necessary documents needed for financing purposes.
3. Early Engagement with Potential Funders:
Hoto Capital team prepares an executive summary of the project that entails description of the project, identify funder’s role, articulate anticipated development impact of the project and the rationale for financing and also identify key risks inherent in the project and potential deal-breakers and high-level financial information about the project. Paying attention on lessons learnt from other similar previous projects is also critical and, in some cases, a pre-appraisal or due diligence visit to the client is conducted to identify key issues in advance. Hoto Capital senior management then decides whether to consider the project for project investment purposes.
4. Preparation of Project Investment Plan:
Hoto Capital appraisal team prepares the full-blown business plan /investment plan that incorporates amongst other things; project background, rationale for the project or business, asses, identify key risks and mitigants, technical & marketing assessment, develop financial model, legal and regulatory & environmental compliance issues and compile all the necessary documents required for investment purposes until the project information is submitted to the potential funders.
5. Investment review by the funders:
Upon submitting the project information to the funders, Hoto Capital team works hand in hand with the potential funders of the project by clarifying key issues regarding the project and makes further submission to the funder’s requests.
6. Due Diligence process:
The funder will assemble the team to conduct due diligence on the project information submitted in order to verify all the claims or facts about the project and upon satisfactory due diligence outcomes, the due diligence team will prepare project credit paper for credit investment consideration purposes. The funder’s project team will prepare their credit paper that will be presented to their respective committee members for approval considerations. This is a key stage in the investment cycle. The team and departmental management must be confident that the client is able and willing to meet the funder’s mandate and shall be in the position to service the funder’s investment and conditions and undertakings. During this stage, an investment term sheet will be issued to summarise terms and conditions of the underlying investment.
7. Credit Committee Decision:
The funder’s team prepares the credit paper and present it to the credit committee for approval decision.
8. Negotiations:
Upon approval of the project, the project team starts to negotiate the terms and conditions of investments. This includes amongst other things, conditions precedent prior to disbursement, covenants, performance and monitoring requirements, agreement of action plans and resolution of any outstanding issues.
9. Disbursement of Funds:
Upon fulfilment of conditions precedent, approved funds will be disbursed according to the drawdown conditions as agreed in the legal agreements.
10. Project Supervision and Development Outcome Tracking:
The funder will monitor its investment to ensure compliance with the conditions in the loan agreement. The project company will regularly submit management accounts or audited financial statements as well as social and environmental performance, or/and any other information on factors that might materially affect the project. Ongoing negotiations during monitoring stage allows the funder to provide non-financial support in terms of solving issues and identifying new opportunities.
11. Closing of the investment:
The funder closes its financial records or books on the project when the investment is fully repaid or in specific cases such as when the client has defaulted and the funder’s board or executive committee has decided to write off the debt.
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