VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY
PT TIM, a subsidiary of PT TBK which focused business was to do mining investment in industries outside tin had acquired PT TBBE through an acquisition in 2015. However, in 2018 the group’s strategic plan was to focus on tin and its derivatives and to exit industry or business that are not profitabl...
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id-itb.:354172019-02-26T09:40:52ZVALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY Handika Pratama, Firman Indonesia Theses Divestment, Financial Valuation, Discounted Cash Flow, Gain on Investment, Sensitivity Analysis INSTITUT TEKNOLOGI BANDUNG https://digilib.itb.ac.id/gdl/view/35417 PT TIM, a subsidiary of PT TBK which focused business was to do mining investment in industries outside tin had acquired PT TBBE through an acquisition in 2015. However, in 2018 the group’s strategic plan was to focus on tin and its derivatives and to exit industry or business that are not profitable and not related to it. The focus of this final project will be on the valuation of a coal mining business that is own by TBBE to help its shareholder TIM decides the fair market value of TBBE that is intending to be divest. The business situation is analyze using PESTEL framework for external environment. For external forces of the coal mining industry, the analysis is done by using Porter’s 5 Forces Framework. SWOT analysis is also conducted to determine TBBE’s Strengths, Weaknesses, Opportunities , and Threats. For the valuation of fair market value of TBBE will be using an income approach valuation by using Discounted Cash Flow (DCF) method and sensitivity analysis. The DCF are analyze using 12% discount rate are divided into two categories of resources, first would be the resources categorized as measured which the Net Present Value (NPV) will be recognized fully as part of the valuation, second would be the resources that would be categorized as inferred and hypothetical which the NPV is recognized based on the chances of success to the resources. The result of the valuation is Rp290.7 billion or USD 15 million with the estimated gain on investment of Rp85.4 billion or USD 5.9 million for TIM. Sensitivity analysis is conducted using four parameters which are coal price, production, operational expenditures, and capital expenditures. The sensitivity analysis most sensitive parameter that have a significant impact on the valuation are the coal price and operational expenses. text |
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PT TIM, a subsidiary of PT TBK which focused business was to do mining investment in industries outside tin had acquired PT TBBE through an acquisition in 2015. However, in 2018 the group’s strategic plan was to focus on tin and its derivatives and to exit industry or business that are not profitable and not related to it. The focus of this final project will be on the valuation of a coal mining business that is own by TBBE to help its shareholder TIM decides the fair market value of TBBE that is intending to be divest.
The business situation is analyze using PESTEL framework for external environment. For external forces of the coal mining industry, the analysis is done by using Porter’s 5 Forces Framework. SWOT analysis is also conducted to determine TBBE’s Strengths, Weaknesses, Opportunities , and Threats. For the valuation of fair market value of TBBE will be using an income approach valuation by using Discounted Cash Flow (DCF) method and sensitivity analysis.
The DCF are analyze using 12% discount rate are divided into two categories of resources, first would be the resources categorized as measured which the Net Present Value (NPV) will be recognized fully as part of the valuation, second would be the resources that would be categorized as inferred and hypothetical which the NPV is recognized based on the chances of success to the resources. The result of the valuation is Rp290.7 billion or USD 15 million with the estimated gain on investment of Rp85.4 billion or USD 5.9 million for TIM.
Sensitivity analysis is conducted using four parameters which are coal price, production, operational expenditures, and capital expenditures. The sensitivity analysis most sensitive parameter that have a significant impact on the valuation are the coal price and operational expenses. |
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Theses |
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Handika Pratama, Firman |
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Handika Pratama, Firman VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY |
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Handika Pratama, Firman |
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Handika Pratama, Firman |
title |
VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY |
title_short |
VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY |
title_full |
VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY |
title_fullStr |
VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY |
title_full_unstemmed |
VALUATION OF THE DIVESTMENT IN TBBE TO IMPLEMENT BUSINESS REFOCUSING STRATEGY |
title_sort |
valuation of the divestment in tbbe to implement business refocusing strategy |
url |
https://digilib.itb.ac.id/gdl/view/35417 |
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1821996925071654912 |