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rofit potential. ? It provides equitylike funding – Operator can not attract conventional debt or lease. – Capital provider does not involve in operation. October 1999 XIN DE TELECOM 30 5, Restructuring ? Motive to participate restructuring of JV finance lease panies. Finance lease is facing bright future in China for some industries. One platform is no long adequate for the limitation in the equitydebt ratio. October 1999 XIN DE TELECOM 31 Platform: Action Room Capital funds Projects Resource Platform Critical factors for JV lease pany October 1999 XIN DE TELECOM 32 Xin De SPL Model Outside investor Equipment vendors SPL Lease Co. Operators ? Not allowed equity in Chinese work operator ? Mechanism for investment ? Mechanism for payment ? Want to participate in China’s tele expansion ? Want acceptable payment term ?Need funds ?Lack expertise ?Have a proven need for assistance in marketing services. ?Financing ?Technical knowhow ? business services October 1999 XIN DE TELECOM 33 What does SPL mean for them? ? Outside investors Not allowed equity in Chinese work operators. ? Equipment vendors Want to participate in China’s tele expansion. Want acceptable payment term. ? Operators Need funds for work rollout expansion Lack expertise in new technologies Have a proven need for assistance in marketing services. October 1999 XIN DE TELECOM 34 Capital funds ? Project Sponsors ? Major Suppliers ? International Equity Investment Fund: Tele Hitec Infrastructure Fund ? Project Finance Lender ? Strategic Investors ? Debt and Equity Capital Market October 1999 XIN DE TELECOM 35 Projects ? Migration away from a generalist approach and focus on specialty markets. ? For Xin De Tele, it is limited to Hitech, Telemunication sector. October 1999 XIN DE TELECOM 36 Resource ? Resource intensive for the level of risk and investors requirements. ? Professionals in engineering, information, sales amp