Norton Rose advises HSBC on Saudi projects market first

The project, three separate but integrated plants producing acetic acid, carbon monoxide and vinyl acetate monomer, was initially financed in December 2006 by a consortium of major GCC banks and is being refinanced and solely underwritten by HSBC subsidiary, The Saudi British Bank.

Financing for the balance of the project costs is expected to come from two Saudi government backed funds, SIDF and PIF, as well as from sponsor equity.

Norton Rose (Middle East) LLP Head of Middle East Banking and Projects, Dominic Harvey commented: "This is a significant project to sign in the region as we believe it is the first time a bank based in Saudi Arabia has offered to solely underwrite a project of this magnitude. The mandate for this refinancing was signed on 19 March 2008 and the extensive documentation was signed on 28 April with financial close anticipated in the near future."

Jonathan Robinson, Director and Head of Project & Export Finance for HSBC Saudi Arabia Limited, who were financial advisers on the project added: "This transaction represents a significant evolution in private sector petchem financing in KSA, using a multi-borrower structure to maximise public sector funding whilst employing cross-collateralisation to mobilise significant commercial bank financing. We were very pleased to have the Norton Rose team supporting the lenders on arguably one of the most complex project financing structures employed to date in a Saudi petchem project."

The transaction was supported by a Norton Rose (Middle East) LLP regional team with lawyers solely based in offices in the Middle East.

It consisted of Dominic Harvey, Victoria Sim and Gail Bassett (project financing), Karl Rogers (hedging) and Martin Preston (construction).

The main project sponsor is Saudi International Petrochemical Company, a subsidiary of the Zamil Group (advised by Allen & Overy, Dubai & London).