SCENARIO: In April 1992, Mr Ali Yacoub, the senior lending officer at Bahrain Arabian Bank (BAB), was reviewing a project report he had just received about the Al Qantara Cables project.

BAB had been approached in early 1992 by Mr YoussifKhadra, a Saudi businessman, who was planning to start operating an electric cable factory in Rhiyad. BAB had been favourably impressed with the project at the time and had encouraged Mr Khadra. He had continued to collect information, and to refine his ideas, and had submitted the project report. The time had now come for BAB to make a decision: was it prepared to lend some (or even all) of the commercial debt funding required?

QUESTIONS

1. Is this a ‘sound' project?

2. Should BAB lend the money to this project?

3. What are the risks involved in the project, both from a lender's and from a shareholder's perspective.

4. How might these risks be mitigated?

Information related to above question is enclosed below:

Attachment:- AlQantaraTemplateOH1.2.rar