Case 3 | Investment Ratio Model
In case of failure to payment by one or more investors and lack of compensation by other investors SDG may look for potential investors or bank loans can be used to complete the project.
If the compensation is made partially by a new investor and bank loan respectively their shares are also calculated the same way.
Increase and decrease of Investors’ shares in case of compensation are calculated by two methods (Shares of investors who fail to pay their contribution would decrease with respect to the total investment needed + total interest paid to the bank.)
Investment Ratio Model: (Initial Investment ÷ Total Investment Needed) x 100. In this case:
• Investor 7 will receive 4,5% of the Fund.
• Share allocated to the Bank for principal payment would be 20%.
• Share allocated to the Bank for the interest payment would be 2% which will be deducted from the investors shares who failed their pledge payments.
New calculation method in case of bank loan (Investor 1 and investor 5 failing to payment):
• Investor 1’s share will decrease to 4,5 and investor 2’s share to 6% with
respect to total project cost.
• The weighted percentage of each investor who fails to payments is
calculated as follow: (Pledge payment by each investor ÷ Total Pledge Payments by investors failing to pay) x 100
- Investor 1: (150.000 ÷ 350.000) x 100 = 43%. Share which will be deducted from the investor 1 = 2% x 43% = 0,86%.
- Investor 5: (200.000 ÷ 350.000) x 100 = 57%. Share which will be deducted from the investor 5 = 2% x 57% = 1,14%.
• Final share of the investor 1 = 4,5% - 0,86% = 3,64%
• Final share of the investor 5 = 6% - 1,14% = 4,86%
Note: Investors who make their pledge payments in time are not affected by the loan interest and their share in the Fund remain the same.