STRATEGIC REPORT Hong Kong, China CHEUNG Ming Yan Fion FOR AMANGO - - PowerPoint PPT Presentation

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Feb 25, 2023 371 likes •667 views

The Charter Quest Institute The CFO Case Study Competition 2017 Team Eureka STRATEGIC REPORT Hong Kong, China CHEUNG Ming Yan Fion FOR AMANGO Bachelor of Business Administration (International Business and Global Management) MARCH 2017

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The Charter Quest Institute The CFO Case Study Competition 2017

STRATEGIC REPORT FOR AMANGO

MARCH 2017

Team Eureka

Hong Kong, China

CHEUNG Ming Yan Fion

Bachelor of Business Administration (International Business and Global Management)

HUI Yee Ting Cheryl

Bachelor of Business Administration (Law) and Bachelor of Law

LAW Ho Ching Kirk

Bachelor of Business Administration (Law) and Bachelor of Law

WONG Yat Nam Kelvin

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Prioritization and Focus

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 1: Operational Risk and Industrial Action in Australia Situation

Controlled shutdown of Australian copper mine due to faulty geotechnical design

A series of safety-related issues in the global supply chain

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A series of safety-related issues in the global supply chain OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 1: Operational Risk and Industrial Action in Australia Situation

Bad Publicity Dropping Market Value Union Action

Controlled shutdown of Australian copper mine due to faulty geotechnical design

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 1: Operational Risk and Industrial Action in Australia Evaluation of Strategic Options 1 2

Resume production immediately and attribute shutdown to a minor problem Close down the current shaft and construct a new one nearby

1-year production suspension Injuries and cover-up worsen the current situation

High Risk of Total Collapse

NPV US$56.54 million

Seemingly mild financial and operational impacts Improve safety standards

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 1: Operational Risk and Industrial Action in Australia Implementation

Establish a safety management mechanism regarding preparation, response and supervision Compensate for the deaths and injuries Issue a public statement about the initial inquiries of the shutdown and measures taken to improve safety Publish quarterly reports on regular safety inspection results of mines

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 2: Balance Sheet De-leverage or Share Buy-Back Situation

Meeting with PIC Next week Dropping Commodity Price Mining Law and Charter

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 2: Balance Sheet De-leverage or Share Buy-Back Situation

Strategy 2 Strategy 1

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 2: Balance Sheet De-leverage or Share Buy-Back Evaluation of Strategic Options

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 2: Balance Sheet De-leverage or Share Buy-Back Evaluation of 2 Strategies

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 2: Balance Sheet De-leverage or Share Buy-Back

LIBOR rate is expected to increase for the next few years

Evaluation of Option 1 of Strategy 2

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 2: Balance Sheet De-leverage or Share Buy-Back

Adopt Option 1 of Strategy 2: Repay the medium loan in 2018 from unbundling the residential portfolio  Results in better solvency  Lowers the debt-to-equity ratio  Repay the medium loan in 2018 as the LIBOR rate is expected to increase for the next few years

Recommendation and Evaluation

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 3: Strategic Disposal in Brazil Evaluation of Strategic Options

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Situation

Asset Disposal Programme Received an offer from CMOC Political risk in Brazil

ISSUE 3: Strategic Disposal in Brazil

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 3: Strategic Disposal in Brazil Evaluation of Strategic Options

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OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

ISSUE 3: Strategic Disposal in Brazil

Adopt Option 1: Accept the offer from CMOC  Credit rating is expected to improve with less net debt  Avoid non-diversifiable political risk, exchange rate risk, economic risk  Strong bargaining power against CMOC - economies of scale after acquisition

Recommendation and Evaluation

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ISSUE 4: Strategic Joint Venture Decision in Canada

Ceasing Protest Applying and Securing Permits

Exclusion of Idle No More leaders
Little centralized leadership of INM

hinders communication

Cephas is an international mining

law practice Effectiveness Effectiveness

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Potential Benefits

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ISSUE 4: Strategic Joint Venture Decision in Canada

1 2 4 3

1 2

1. Compute expected coal demand for each design
2. Compute profit for

each design with different coal prices

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Configuration of Joint Venture Mining Infrastructure

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ISSUE 4: Strategic Joint Venture Decision in Canada

3. Conduct maximax and minimax regret analysis
4. Recommendation

Design 2  Cost efficiency  Financial Profitability

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

1 2 4 3

4 3

Configuration of Joint Venture Mining Infrastructure

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ISSUE 5: Corporate Reconstruction and Reorganization

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Situation

To streamline portfolio To expand portfolio

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ISSUE 5: Corporate Reconstruction and Reorganization

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Internal – APD Analysis

Favourable fit with AMANGO’s capability Profitable by improving workplace safety and environment

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ISSUE 5: Corporate Reconstruction and Reorganization

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

External – SPD Analysis

Dominant segments in the portfolio Potential increase in competitiveness

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ISSUE 5: Corporate Reconstruction and Reorganization

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Recommendation

To streamline portfolio

To reinvest in South Africa

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Ethical Issues Operational Risk and Industrial Action in Australia

Controlled shutdown of Australian copper mine due to faulty geotechnical design

A series of safety-related issues in the global supply chain OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

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Ethical Issues Operational Risk and Industrial Action in Australia

Improved safety and employees’ benefits Establish safety standards Maintain workers’ minimum wage and basic conditions Offer paid leaves to workers with work-related and non- paid leaves to those with non work-related injuries

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

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Ethical Issues Strategic Joint Venture Decision in Canada

Inadequacy of current accounting system to reflect AMANGO’s environmental performance

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

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Ethical Issues Strategic Joint Venture Decision in Canada

Improved investor relations Modern Accounting System Use of more non-financial measures Environmental cost allocated under process or activity-based costing

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

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Ethical Issues Managing Divisional Performance Group-wide

OVERVIEW ISSUES & ANALYSIS ETHICAL ISSUES CONCLUSION

Factors

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