Clifford Chance advises Deutsche Bank on partial refinancing of $1.41bn acquisition

Clifford Chance LLP has acted for Deutsche Bank AG, London Branch as mandated lead arranger in relation to the partial refinancing of a $1.41bn acquisition of Egyptian Fertilizers Company S.A.E., the largest private equity transaction to date in the Middle East and North Africa.

Egyptian Urea and Petrochemicals Company S.A.E., a newly incorporated Egyptian private joint stock company, ultimately owned by the Infrastructure and Growth Capital Fund L.P. and Abraaj Buy Out Fund II LP as managed by Abraaj Capital Limited (the leading private equity firm in the Middle East) and other co-investors, has acquired 100% of the issued shares in Egyptian Fertilizers Company S.A.E.

The acquisition had been funded via (i) a $850m conventional senior and a $400m conventional subordinated bridge facility and (ii) an equity injection equal to $675m. The senior conventional bridge facilities are to be partially refinanced with Shari'a compliant long term financing using an innovative Shari'a structure based upon the principles of a forward sale (bai salam) structure.

There were a number of notable milestones for this deal namely, the largest Islamically financed leverage deal in the Middle East and North Africa, the largest Islamic deal in Egypt, the first Islamically leveraged deal to use the forward sale (bai salam) structure and the first Islamically leveraged deal with structural and contractual subordination.

Qudeer Latif, who led the Dubai based team on the Shari'a refinancing, commented,

"We are delighted to have worked with Deutsche Bank and Dr Hussain Hassan on the structuring and execution of this complex and novel refinancing. The structure is very innovative and demonstrates Clifford Chance's cross border strength across Islamic finance and acquisition finance. Our global Islamic finance team continues to work with leading scholars and financial institutions to develop new Shari'a compliant structures and solutions across various asset classes in an increasingly sophisticated market."

The Clifford Chance London team advised on the conventional bridge facilities and were led by Geeta Khehar with assistance from Taner Hasan, James Hardy and Martin Forbes. The Clifford Chance Dubai team advised on the Shari'a compliant partial senior refinancing and were led by Robin Abraham and Qudeer Latif with assistance from Amar Meher and Susi Crawford and tax input from Helen Smyth in London. Sharkawy & Sarhan Law Firm acted as Egyptian counsel to Deutsche Bank and Maples and Calder acted as Cayman Islands counsel.