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marketing, financial management support all aspects of lease project. October 1999 XIN DE TELECOM 37 Potential Information Sources Regulators National Operator Outside Investor Equipment vendors SPL Leasing Co. Provincial, City Operators Source of information on SPL projects October 1999 XIN DE TELECOM 38 Platform ? Business license. ? Adequate capital and funding ability. ? Legal equitydebt ratio. ? Management team. October 1999 XIN DE TELECOM 39 6, Conclusion ? SPL will offers tremendous potential in the New Wave of developments in China’s Hitech and munications sector. ? Restructuring is a new approach to develop finance lease industry in China. October 1999 XIN DE TELECOM 40 The End Thank you for your time Finance Lease in China: Turning Challenge into Opportunities New forms and new structures for the new century 22 October 1999, Beijing The symposium on finance lease in China presided by Leasing Business Committee. By William Krueger 。 Objective agreedupon in detail ? Could be a percentage of: sales, gross margin on sales, ine, operating cash flow October 1999 XIN DE TELECOM 24 Business Result 010020030040050060070080090010001 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16October 1999 XIN DE TELECOM 25 The Cash Flow Between Lessor and Lessee 0501001502002501996 1997 1998 1999 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020N e w I n v e s t m e n tR e i n v e s t m e n tA n n u a l R e n tEnd of Payback Period October 1999 XIN DE TELECOM 26 Payback Period ? Time required to repay principal amount + accrual interest. ? Begins with first capital injection. ? Rent payment is based on lease project performance. ? Lender bears project performance risk. October 1999 XIN DE TELECOM 27 Discount Formula ( 1 + i ) Where, A = Outstanding principal retired by V。 rent. ? Strict credit assessment. ? Amount of lease principal is limited. ? Limited to well established operators. ? Limited to single