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When the world changes… your deal can die overnight
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They thought the deal was done. Preferred bidder. Banks aligned. Lawyers billing like there’s no tomorrow. Financial Close… just weeks away. Then Lehman Brothers collapsed (2008). And across the world… PPP deals froze. In the UK, dozens of Private Finance Initiative (PFI) projects suddenly faced: No liquidity Banks pulling out Margins exploding Some survived. Many didn’t. I remember those days well… as I was parachuted to the A30 Project in Montreal whose financial closed happened end of September 2008! Anyway… Fast forward. COVID. Projects like the Melbourne Airport Rail suddenly became… “Uncertain.” Demand assumptions? Questioned. Public funding? Redirected. The project stalled. And what about operational PPPs? Toll roads. Airports. Etc. Look at the Indiana Toll Road. Bankruptcy after the Global Financial Crisis. Traffic didn’t match expectations. Debt structure couldn’t hold. Game over. Or Spain. Radial highways like the R-3 Madrid Arganda toll road. Over-optimistic forecasts. Expropriation costs exploding. The State had to step in. And now… Iran. You don’t need to be a geopolitical expert to see what’s coming. Volatility. Liquidity tightens. Banks get nervous. Credit committees slow down. And suddenly… That “bankable PPP” It’s not that bankable anymore. Let me tell you something. Deals don’t die because of spreadsheets. They can die because of timing. You can have: Top advisors Strong sponsors A “perfect” model And still… Miss the window. This is where experience shows. Amateurs think: “If we push, we close.” Professionals ask: “Should we close?” Look… Some deals should not close. Not in those conditions. Not with that risk. Not at any price. But governments have agendas. Elections. Headlines. Momentum. So deals get pushed. Closed under pressure. And then… Claims start. Renegotiations follow. Value disappears. History doesn’t repeat. It rhymes. Lehman. COVID. Iran? If you’re in PPP, real estate, infrastructure… You better understand this game. Because the next shock is not “if”. It’s “when”. And when it happens… You either react. Or you anticipate. That’s what we work on in mentoring. Real deals. Real risks. Real decisions. If you want to play at that level… You know where to go. And yes… You also get access to this: ​Mentorship​ PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day. PD 2: If somebody has sent you this email and you want to receive emails like this yourself, visit vicentevalencia.com PD 3: If you want unsubscribe, click the link below. |
Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | 👇JOIN +2k readers 👇
Someone lied to me yesterday. And not even a good lie. A lazy one. A client texts me on WhatsApp: “Aqualia came. They say we need to build an additional drainage point to install the final water meters. We have 10 days.” 10 days. That was the giveaway. Let me translate this for you. Aqualia. The most incompetent utility provider in Spain after Endesa (about those guys, I can talk another day). The same Aqualia that took 7 months to even show up. Now suddenly… they give us 10 days? Come on....
In 27 minutes on the phone, I domesticated the beast. “How did you do it?” my project manager asked. Using his ego. Context. Contractor. Spain. Penthouse. Water coming from the ceiling. “Go fix it. It’s under warranty.” “No. Warranty expired. When I left, there was no leak.” I’ve seen worse. And more creative lies. This one was just… lazy. Less than a year since notification. In Spain, that’s a 3-year warranty. But fine. Let’s play. In judo, you don’t fight strength. You use it. Same here....
PPP is political. Innovation is often bullshit. Preferred bidder is where power shifts. Claims are part of the game. Long hours don’t mean value. Most people don’t understand the deal they’re working on. Risk allocation is everything. Relationships beat intelligence. Timing beats perfection. The best players think about the exit… from day one. If this makes you uncomfortable… good. That’s reality. Most people in this industry are busy.Very few are effective. And the gap between the two?...