Dubai team advise on milestone credit facility

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The restructure involved Thames Water Aqua International (Germany) selling its 60 per cent shareholding in the project company, Ajman Sewerage (Private) Company Limited (ASPCL), to BESIX Group S.A. (Belgium) (40 per cent) and Veolia Water AMI (France) (20 per cent). The remaining shares are held by the Government of Ajman (20 per cent), Six Construct Ltd (UAE) (10 per cent) and Black and Veatch International Company (USA) (10 per cent).

The engineering, procurement and construction of the project, which was originally contracted to Black and Veatch Group Limited (UK), is now being undertaken by a consortium of Black and Veatch Group Limited (UK), N.V. BESIX S.A. (Belgium) and Six Construct Ltd.

The operation and maintenance of the project, which was originally contracted to Thames Water Middle East GmbH (Germany), is now to be undertaken by a newly established operating company called Moalajah FZC (UAE), owned 67% by Veolia Water AMI and 33% by NV Besix SA.

ASPCL is now financing the project with a US$100,000,000 credit facility provided by ING Bank N.V. (London Branch) and guaranteed by the monoline insurer Ambac through Ambac Assurance U.K. Limited. The old lenders, consisting of Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, United Arab Bank and Mashreqbank were repaid in full on first drawdown under the new facility.

The project (rated A3 Stable Outlook by Moodys and BBB Stable by Standard & Poors) is significant in that it utilises the first monoline wrapped credit facility in the Middle East. It is representative of the growing appetite the region has for innovative financing structures and off balance sheet funding.

Denton Wilde Sapte Dubai advised the sponsors on the original financing which reached financial close in January 2003. Our continued involvement in the project's restructure and its successful financial close, is testimony of the strength of our expertise in the sector and excellent relationship with members of the consortium. This project marks another success for our expanding projects practice in Dubai.
'We have been working on this project for nearly five years now and it is very satisfying to see it achieve Financial Close for the second time,' says Denton Wilde Sapte's Gulf Managing Partner Neil Cuthbert.

'The refinancing was undoubtedly a very complex process and required a lot of creative thought both on the legal and commercial aspects and it would not have been achieved but for a considerable degree of cooperation between the parties.'

Ian Barrett of Black & Veatch added: 'This complex refinancing and restructuring demanded an innovative approach and perserverance by all the stakeholders. This project will enable the vital infrastructure to be delivered which will support Ajman's economic and social development. We are all extremely proud to be a part of this realisation.'

The Denton Wilde Sapte team was led by Managing Partner Neil Cuthbert who was assisted by Michael Rodrigues, Bernie Hau, Tom Eldridge, Yasir Hassan, Mirren Waters, Nick Kramer and Amanda Chen.