Pusan Newport Company, a subsidiary of Samsung and CSX World Terminals, has selected a new bank group for a refinancing and expansion financing of the Pusan Newport container terminal project in Pusan, Korea. Terms were decided in Hong Kong last week.
The original project saw the construction of six berths at the new container port in Korea's second busiest port. This new financing package will refinance the original package and pay for three new berths bringing the total project size to nine berths.
The financing consists of a foreign currency and local currency tranche. Mandated lead arrangers and underwriters of the $465 million foreign currency tranche are ANZ Investment Bank, Banca Intesa, Bank of Tokyo Mitsubishi, Calyon, DZ Bank and Kookmin Bank.
Mandated lead arrangers and underwriters of the Wn350 billion ($300 million) local currency tranche are Kookmin Bank, Samsung Life and Woori Bank. Both facilities have a 14-year tenor and five-year grace period. Repayment after that will come in 18 semi-annual unequal installments. Pricing details were not revealed.
The lenders are accepting full market risk of the project but have mitigated some of the financial burdens through the participation of the government. Under the terms of its private participation in infrastructure scheme, the government is providing subsidies totaling 29% of the investment costs. It is not however providing a minimum revenue guarantee as it does for some of its road projects.
70% of the works for the original six berths have already been completed and full final completion is due in May 2009. The total project costs will be around $1.7 billion.
Roles for the project are as follows:
- Banca Intesa: Technical and modeling bank.
- Calyon: Offshore facility agent, inter creditor agent and book runner.
- DZ Bank: Documentation and insurance bank.
- Kookmin Bank: Onshore facility agent, coordinating onshore arranger.
- Woori Bank: Onshore security agent.
- Financial advisor to Pusan Newport Company (PNC): Babcock and Brown.
- International legal counsel to PNC: Allen & Overy.
- Korean legal counsel to PNC: Kim & Chang.
- International counsel to the mandated lead arrangers: Linklaters
- Korea legal counsel to the mandated lead arrangers: Lee & Ko.