Publications
Publications
- July 2002 (Revised March 2003)
- HBS Case Collection
Restructuring Bulong's Project Debt
By: Benjamin C. Esty and Michael Kane
Abstract
Preston Resources, a small Australian gold mining company, bought the Bulong nickel mine for A$319 million in November 1998 and financed the acquisition by issuing a US$185 million (A$294 million) project bond. At the time, mining had been underway for several months, and construction of the processing plant was essentially complete. Almost from the beginning, however, a series of design and operating problems shut down production and required costly repairs. Although processing performance improved by late 2000, maintenance issues continued to plague the plant, and output remained significantly below forecast levels. This case, set in 2002, concerns the financial consequences of these problems, including a bond default in January 2000 and Preston's efforts to restructure the project debt.
Keywords
Finance; Projects; Restructuring; Bonds; Borrowing and Debt; Business Startups; Insolvency and Bankruptcy; Valuation; Mining Industry; Australia
Citation
Esty, Benjamin C., and Michael Kane. "Restructuring Bulong's Project Debt." Harvard Business School Case 203-027, July 2002. (Revised March 2003.)
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