Friday, 01 December 2017

Deal watch: Linklaters and White & Case in landmark Africa project as Slaughters and Macfarlanes lead on Cineworld takeover

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Deal watch: Linklaters and White & Case in landmark Africa project as Slaughters and Macfarlanes lead on Cineworld takeover

UK-based deal specialists were busy this week advising on cross-border transactions spanning three continents.

White & Case and Linklaters have deployed their global teams to act on a $2.73bn refinancing for an infrastructure project across two countries in sub-Saharan Africa.

White & Case’s Caroline Miller Smith and Carina Radford are advising Brazilian mining company Vale and Japanese energy giant Mitsui, which signed a deal for the refinancing of the Nacala Corridor, a 912km railway line to transport coal from their mine in western Mozambique to a port on the eastern coast of the country across Malawi. Other White & Case partners involved include energy, infrastructure, project and asset finance veteran Philp Stopford and disputes specialist Ed Attenborough.

Head of Linklaters Africa group Andrew Jones and London projects partner Fiona Hobbs advised the lenders, along with Francisco Ferraz de Carvalho in Lisbon and Hirofumi Taba in Tokyo and lawyers in Johannesburg, Amsterdam and Dubai.

Jones told Legal Business: ‘This deal has a terrific collateral benefit for the region. There will be not just trains for coal, but also other cargo and passengers, connecting these isolated regions. This should be a stimulus for Malawi and Mozambique.’

A long-term client of White & Case, Vale started work on the corridor linking the cities of Moatize and Nacala-à-Velha in 2012. In March this year, Mitsui acquired 15% of the Brazilian company’s stake in the coal mine and 50% of its stake in the corridor.

In 2016 the cost of the project, which also involved the construction of a new port at Nacala, was estimated at $4.4bn, with $2bn already invested by Vale. The railway line began operating in May and completion of the project is expected next year.

The $2.73bn deal agreed this week will refinance part of Vale’s shareholders loans used for the construction, support the ramping up of operations along the corridor and mean the companies will share investment and political risks with institutions which have established relationships with the governments of the two countries involved.

Lenders included African Development Bank, Export Credit Insurance Corporation of South Africa (ECIC), Japan Bank for International Cooperation and Nippon Export and Investment Insurance (NEXI), together with ECIC and NEXI-covered commercial lenders.

‘This project required some creative thinking,’ said White & Case’s Miller Smith. ‘One of the challenges for our clients is you don’t choose where natural resources are in the world. We knew that lenders for this project wanted it to be an integrated whole. We drafted a treaty that the two governments [of Malawi and Mozambique] signed in September.’

A team from Linklaters’ South African alliance partner Webber Wentzel advised the South African lenders. In-country advice was provided by ABCC in Mozambique and Savjani & Co in Malawi.

Meanwhile, Slaughter and May and Macfarlanes are facing off as Cineworld offered $3.6bn to acquire Regal Entertainment yesterday (29 November).

The UK cinema operator confirmed it is in ‘advanced discussions’ with Regal for an all-cash offer to acquire the second-largest cinema chain in the US for $23 per share.

Slaughters corporate partner David Johnson and finance partners Ed Fife Guy and O’ Keefe are acting for Cineworld, while Macfarlanes’ M&A partner Harry Coghill is leading Regal’s advisers.

The UK cinema operator advised its shareholders that ‘there can be no certainty that the discussions will lead to any agreement’ and there was no timetable set for the transaction yet.

Cineworld is a long-time client of Slaughters. The Magic Circle firm was part of an international group of advisers as the UK chain acquired Warsaw-listed Cinema City International for £504m in 2014 .

marco.cillario@legalbusiness.co.uk

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