Valuation of Latin American operations in UNCITRAL arbitration

Charles River Associates Yellow Pill Production Line

In the context of an investor-state proceeding under UNCITRAL rules, CRA provided a valuation of the local operations in Latin America of a multinational pharmaceutical company.  CRA assessed the going-concern value of the company, inclusive of working capital, based on a forecast of product sales prepared prior to the threatened expropriation.  The valuation took into account the expected performance of the company’s portfolio of top-selling products for a period of time beyond the company’s projections, basing future sales on sales growth rates observed for other products over the lifecycle.  CRA discounted cash flows at a rate inclusive of a country risk premium, and included a quantification of prejudgment interest and costs incurred by the company in addressing the threatened expropriation.

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