In the conditions of overcoming the financial crisis in the country, the decline in the confidence of foreign investors in the guarantees of Russian financial institutions and the reduction of the country’s rating among potential investors, new instruments and forms of attracting investments are needed that are not related to the guarantees of the lost local financial institutions.
In modern world, a great variety of investment needs of entrepreneurs are being allocated that lead to the development of a new form of project lending such as project financing, which is attractive for enterprises that do not have the opportunity to implement the project with their own funds.
With the view of successfully carry out project activities and effectively implement investment projects, the project financing mechanism is used around the world, which allows to concentrate the resources and competencies of all those interested in implementing the project of participants, to ensure transparency and control over the use of financial resources.
Therefore, in the current conditions of an unstable market economy, project financing becomes a promising direction for the development of the banking sector and the construction industry, predetermining the need to evaluate the effectiveness of projects.
At the same time, as foreign experience shows, only with this mechanism it is possible to distribute risks most rationally among participants in the project activity, protecting their interests by isolating the project’s property on the balance sheet of a specially created company.
Project financing is one of the priority tools to stimulate the country’s economic growth around the world, which allows the implementation of large-scale and capital-intensive projects, providing favorable credit conditions with insufficient sponsor solvency.
Project financing is a special area of financial activity related to the implementation of projects on the basis of attracting external sources of financing in order to profit from the cash flows generated by the newly created enterprise for the project. It should be emphasized that project financing is not a source of resources, but a financial technique that allows you to better tailor financing to the specific requirements of each project.
The variety of markets for project financing is due to, first of all, a wide range of financing instruments that are used in a country, a legal framework that regulates the rights, responsibilities and responsibilities of the project company, protects investors and creditors. For example, project bonds as a project financing tool has a narrow application in Russia, unlike other tools.
Nowadays, such scientists as Borisov A.B., Valdaytsev S.V., Vorobyev P.P., Zelenkova N.M., Igonina L.L., Sergeeva I.V., Veretennikova I.I., YanovskayaV.V. etc. are engaged in project investment.
The puprose of the research is to study the features of project financing for investment projects.
- To analyze the literature on the research topic.
- To disclose the essence of project financing and its features.
- To analyze the financial performance of the enterprise.
- To develop an investment project based on project financing and calculate its effectiveness.
The object of the research is joint-stock company IC «Eurofinance».
The subject of the research is project financing
The methodological base of the research is a system of methods used in the cognition of managerial business processes, including: the method of system analysis, comparison, synthesis.
 Nikonova I.A., Smirnov A.L., Project financing in Russia. Problems and directions of development. — М .: Publishing house «Konsalbankir», 2016. — 216 p.
Project financing is one of the priority tools for stimulating the country’s economic growth around the world. It allows to realize large-scale and capital-intensive projects, providing favorable credit conditions with insufficient sponsor solvency.
Project financing is a special area of financial activity related to the implementation of projects based on the attraction of external sources of financing for profit from the cash flows generated by the newly created enterprise for the implementation of the project. It should be noted that project financing is not a source of resources, but a financial technique that allows better adaptation of financing to the specific requirements of each project.
Modern forms and methods of project financing began to be used in world practice since the beginning of the 1980s. The project financing includes certain financial, commercial and insurance operations, which give the sponsors of investment projects different opportunities for the possibility. On the one hand, there is an opportunity to reduce its responsibility and costs for repaying loans attracted to the project, and on the other, to more reliably distribute the financial risks accompanying the project, including the relations of suppliers and consumers.
Project financing (PF) is a method of attracting long-term loan financing for large projects through «financial engineering», based on a loan for cash flow, created only by the project itself without recourse to the borrower. The most important feature of project financing is that a special project company (SPV, SPE) is created to implement a specific project, which attracts resources (not only money) for project implementation, implements the project and is calculated with project lenders and investors from the funds (cash flow) generated by the project itself.
This work was carried out on the basis of IC «Eurofinance».
Analysis of financial performance of the company showed the following results: during the period under review, the diversion of funds from the turnover of the enterprise increased, indirect lending by means of this organization to other enterprises increased.
The organization incurs losses from impairment of accounts receivable. It is necessary to take all sorts of measures to recover accounts receivable in order to cover the enterprise’s debts to creditors. The increase in assets per 938,686 thousand rubles accompanied by a simultaneous increase in the company’s liabilities per 712,505 thousand rubles.
Since solvency depends on covering the enterprise’s liabilities with its assets, it can be argued that due to an increase in the organization’s debt without an equivalent growth in assets, the ratio of current liabilities to current assets has changed and entailed a deterioration in solvency.
Liquidity of the balance can be characterized as insufficient. At the same time, there is no possibility of increasing current liquidity in the near future, but it persists — in the long term.
In the analyzed period gross profit from sales decreased per 7758 thousand rubles. The decrease in profit per 109.28% was dictated by the change in revenue, and per 9.28% — by a change in the cost price.
Decrease in the loss from sales per 21860 thousand rubles was due to a decrease in the amount of commercial and administrative expenses.
Growth of total accounting profit per 93324 thousand rubles was due to the growth of the received profit from sales per 23.42% and growth of the balance of other income and expenses per 76.58%.
In the reporting period, the following factors influenced the formation of the net result of the financial and economic activity of the enterprise: the growth of profit before tax was 33.36%; the decrease in the amount of taxes paid out of the profit was 56.43%.
As of 01.12.2017 compared with 01.01.2015 the financial situation has deteriorated significantly. It is assessed as a crisis, in which the company is on the verge of bankruptcy, because the cash, short-term securities and accounts receivable of the enterprise do not cover even its accounts payable and overdue loans.
The equilibrium of the balance of payments is ensured due to overdue payments for labor remuneration, bank loans and borrowed funds, suppliers, taxes and levies, etc.
Above stated, speaks about the necessity of carrying out of active measures on financial improvement of the enterprise.
A package investment in one of the subsidiaries can be used as one of the directions for the enterprise’s exit from the crisis.
IC «Eurofinance» is the owner of 70% of LLC «Gidrostar Plus». The production enterprise LLC «Gidrostar Plus» specializes in the production of complex products for industrial purposes from metal, such as pipelines of critical function, forged products, foundry products and others.
The introduction of production of large-size rings is proposed as an investment.
The analysis of the developed investment project has shown its economic efficiency and is recommended as expedient for introduction.
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