Beruflich Dokumente
Kultur Dokumente
of Sibanye-Stillwater
Phaedrus Capital is one of the world’s leading Private Equity buyout funds with deep
expertise in the mining and precious metals sector. Phaedrus Capital supports experienced
management teams with capital to execute and complete their business plan, and strategic
advice to ensure their success. Phaedrus’ flagship fund, denominated in USD, is considering
a public-to-private buyout transaction of the South African mining company Sibanye-
Stillwater.
The investment team at Phaedrus has worked extensively on modelling the investment case
and are making the following assumptions:
The investment team have made their assumptions on a constant currency basis, but are
very aware that currency volatility poses a serious risk to the performance of their
investment at several levels. They have asked for your assistance in evaluating the currency
risks involved in the transaction, and to come up with any possible solutions to mitigate
these. In particular, they have identified 3 key areas they want you to focus on:
Investment Risk: Phaedrus is worried about how the return profile of their
investment can be impacted by the USDZAR exchange rate over time, particularly as
they are funding a ZAR investment with USD. They are finding it difficult to measure
this risk given the relative uncertainty of both future exit timing and return profile,
and would like you to assist them in finding a way to quantify this in order to make
any meaningful observations. Please also advise whether or not this risk should be
mitigated, and if so – how you propose they should do that.
Deliverable
Your team should send a maximum 12 slide recommendation presentation (additional pages
may be included in the Appendix) by 2:00 pm on 23 February 2018 and be prepared to
present your findings on 2 March 2018 to the judging panel.
Please prepare a final recommendation for each section (Funding Risk, Valuation risk, and
Investment Risk). The tone and content of the materials should be consistent with
a recommendation to an investment committee. Teams will not be required to submit their
models.
NOTE: Please feel free to create a model for the investment case (you can determine a
realistic debt/equity split and make your own assumptions on the proceeds of funds and
investment strategy) in order to make your risk assessment more relevant. Please note
however that you will not be tasked with determining whether or not the investment makes
sense.