7 June, 2013
Allen & Overy is advising the export credit agencies and commercial lenders on the USD 5bn financing of the Nghi Son Refinery and Petrochemical project in Vietnam. Total project costs are in excess of USD 9bn.
The key facility providers include Japan Bank for International Cooperation (JBIC), The Export-Import Bank of Korea (KEXIM) and Nippon Export and Investment Insurance (NEXI), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) and 24 commercial lenders covered by guarantees or insurance from KEXIM and NEXI. Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP) will use the loans as well as sponsors' equity to fund the construction of the refinery and associated infrastructure over 40 months. Construction is scheduled to commence in July 2013. The refinery is expected to start commercial operations in 2017.
Commenting on the deal, Allen & Overy Tokyo partner Simon Black said: "This is a groundbreaking project for Vietnam, being the largest international project financing to take place since the country opened its doors to foreign investment in the early '90s, and the first major foreign invested refinery and petrochemicals project in Vietnam. As an import substitution project, it includes some innovative features to manage the foreign exchange and market risks in a robust legal and commercial structure. It was a massive effort by all involved."
Partner Matthias Voss noted: "This has been a tremendous project for the firm as it has given us the opportunity to show-case a fully integrated leading finance team operating out of Tokyo, Hanoi, Ho Chi Minh City and other offices in the region. We thoroughly enjoyed working with the Allens team representing NSRP and the sponsors, whose commercial and practical approach made it possible to conclude this complex financing in a highly compressed timeframe."
The project will have the capacity to process 200,000 barrels of crude oil a day imported from the Middle East, producing a range of petroleum and petrochemical products including gasoline, diesel, jet fuel and polypropylene. The refinery will be located in Thanh Hoa Province in Vietnam, 200 km south of Hanoi.
NSRP is a joint venture formed by Idemitsu Kosan Co., Ltd. (35.1 percent), Kuwait Petroleum Europe B.V. (35.1 percent), Vietnam Oil and Gas Group (25.1 percent) and Mitsui Chemicals, Inc. (4.7 percent).
The A&O team was led by partners Aled Davies, Simon Black and Matthias Voss. A&O also advised on the Vietnamese law aspects through the head of the firm's Hanoi office Duc Tran. In total, 19 Allen & Overy lawyers across 5 offices, including associates Hans Menski, Scott Lovell, Sophie Chamberlin, Jae Ahn, Kazuko Ali, Michael Evry, Tina LeDinh, Phuong Tran, Thuy Huynh and Phong Le, advised on the deal.
Allens is advising NSRP and the sponsors.
For further information, please contact:
Susan Byrnes, Allen & Overy