Valtech’s valuation team has recently completed series of fair value assessment on financial guarantees contracts guaranteed by the subsidiaries of a large-cap PRC energy company.

In this valuation, we have exercised due care in analyzing the cash flows of the underlying clean energy projects in order to determine their likelihood of delay / default on repayment of loans, if any. Scenarios have been created to determine the timing and amount of potential shortfalls to be guaranteed by the guarantor. As energy price and energy policies of different municipals, county or cities of PRC varies, this created further challenges to our assessment. Furthermore, due to the impact of COVID-19 on the global economy, companies’ performances were affected so extra care has been exercised in assessing the reasonableness of future improvements of cashflows of the underlying projects covered by the financial guarantee contracts in order to provide a fair opinion on their fair value.