White & Case Advises on $1.6 Billion Islamic Financing
Riyadh,
August 6, 2008 ... The Law Office of Mohammed Al-Sheikh in association with global law firm White & Case LLP advised Saudi Electricity Company ("SEC"), the Kingdom of Saudi Arabia's largest power generator, in connection with a SAR 6 billion (approximately $1.6 billion) Islamic financing. The financing comprises two parallel Islamic
Murābahā facilities: one for SAR 1.5 billion provided by Al-Rajhi Bank; and one for SAR 4.5 billion provided by Banque Saudi Fransi, National Commercial Bank, Samba Financial Group, The Saudi British Bank and Saudi Hollandi Bank. Both facilities primarily will be used (a) for refinancing of the existing debt under the SAR 9,500 million Structured Term Loan Facility; and (b) excess after refinancing, for capital expenditure and general corporate purposes of SEC.
White & Case acted for SEC with respect to its previous financings in May 2004 and June 2005 and has also represented SEC in connection with its proposed corporate restructuring and commercialization, including plans to implement IPPs and IWPPs in The Kingdom of Saudi Arabia.
"Demand for electricity in the Kingdom is ever-increasing, fuelled by population growth and industrial development. We expect to see an influx of investment to this sector over the next few years," commented White & Case partner Mohammed Al-Sheikh. "This transaction is the latest in a series of sophisticated and high profile Islamic finance deals in the region and we have had the privilege of being at the forefront of a high volume of these deals as they have come to market."
The White & Case team advising SEC on the financing was led by partners Mohammed Al-Sheikh and Chris Langdon, working closely with associate Harj Rai.
With more than 30 years' experience in Islamic financing, White & Case regularly advises on Islamic finance transactions. Since the beginning of 2007, the Firm has advised on Islamic financing, including
sukuk transactions. totalling approximately $20 billion. Examples of this work include:
- a SAR 4.3 billion (more than $1.1 billion) financing facility, based on a Murābahā structure, comprising two tranches, one of which repays certain existing facilities of Arabian Centres, and the other of which will fund future construction projects in the retail mall sector;
- a SAR 1.5 billion (approximately $400 million) financing facility to fund Saudi mobile telecoms service provider Mobily's acquisition of Saudi data service provider Bayanat Al Oula;
- the $205 million debt financing, achieved on a Sharī'a compliant basis, of the Hajj Terminal project at the King Abdulaziz International Airport in Jeddah, Saudi Arabia;
- two financing facilities, comprising a guarantee facility of up to nearly $5 billion and an Islamic Murābahā based facility of up to $2.5 billion, created to finance the purchase of the third mobile telecommunications licence in the Kingdom of Saudi Arabia by Mada Leletisalat LLC, a special purpose vehicle owned by a consortium of Saudi Arabian shareholders and Mobile Telecommunications Company K.S.C.; and
- a groundbreaking $2.875 billion Islamic financing facility, based on airtime, that enabled Mobily to sell minutes of airtime to the financiers involved, before then taking on the role of agent to these banks and selling the minutes for a profit. The Mobily financing is the largest syndicated Islamic loan to date.
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