Fauzan Aiman Margono -29120363

M Farhan Farabi Rasyid Z - 29120514

CWC Valuation Case William wicaksana - 29120565
Annisa Diyan Fitri - 29120589
Muhammad Luthfi Fauzan -29120618
Susanti - 29119513
Information
TML plan to build a Smelter Factory to further process it’s nickle ore and producing Nickle Pig Iron (NPI), with
the total project investment amounting to USD 40.000.000,00 (Forty Millions US$)

The Financial Projection of the Smelter Project is attached, and the Financing condition related to the project
could be presented as follows :
Maximum Loan from the Bank is US$ 32 Millions

(Max Leverage = 4 X)
Loan Interest Rate = 8,0% per year
Time Deposit Rate = 3% per year
Total Investment = US$ 40 Million
Problem
After conducted the Capital Budgeting Analysis, and Financial Feasibility
Study on the Smelter Project owned by TML, and you found out it is a
very feasible one.

A group of Chinese Investor “Called Wugang Corporation”, would like to

buy a majority shares of TML.

TML Shareholders ask you to render a financial services to them,

primarily to advise them on how much they should quote the price for 60
% ownership of the TML to “Called Wugang Corporation’
PT Tumindo Mining Lestari Financial
Projection
  Deskripsi : I II III IV V

1 Sales 8,200 18,000 26,000 31,000 42,000

2 COGS 1,700 3,900 7,800 8,700 9,600

Other Informations :
3 Gross Profit 6,500 14,100 18,200 22,300 32,400
1. Growth of the compay Free Cash Flow after year V is = 5 %
4 Over Head 120 220 320 420 520

5 Depresiasi 2,000 2,000 2,000 2,000 2,000 2. Beta koefisien of the company = 2,0 X
6 EBIT 4,380 11,880 15,880 19,880 29,880 3. SBI Rate for US$ = 5 % pa
7 Interest Expense 3,600 3,600 3,600 3,600 3,600 4. Weighted Average Profitablility in Indonesia = 4% pa

8 EBT 780 8,280 12,280 16,280 26,280

9 TAX = 20 % 156 1,656 2,456 3,256 5.256

10 NET AFTER 624 6,624 9,824 13,024 21,024

TAX
Step 1: Projection Net Cash Flow

= NAT + Depresiasi - RfG

NCF I = 624 + 2.000 - 124 = 2500
NCF II = 6.624 + 2.000 - 624 = 8.000
NCF III = 9.824 + 2.000 - 824 = 11.000

NCF IV = 13.024 + 2.000 – 1.024 = 14.000

NCF V = 21.024 + 2.000 – 1.024 = 22.000

Step 2: Determine Discount Factor and Cost of Equity

ks = krf + RPm x beta —> WAPI

ks = cost of equity
krf = risk free rate
RPm = market risk premium

= 5% - 1% + 4% (2)

= 12%
Step 3: Determine Terminal Value (TV)

Terminal Value = FCFt5 (1+g) / (ks-kRF)

= 22.000 (1+0,05) / (0,12-0,04)

= 22.000 x 1,05 / 0,8

= 288.750
Step 4: Present Value of the FCF & TV
• 
P=

=
= (2.232,14) + (6.377,55) + (7.829,58) + (8.897,25) + (12.647,53)

= 37.984,05
Step 5: Calculate the Fair Value (FCF+TV)
= 37.984,05 - Loan
= 37.984,05 - 32.000
= 5.984,05

Called Wugang Corporation wants to acquire 60% ownership.

= 0,6% x 5.984,05
= 3.590,43