Cases & Deals

Tanjong SPV obtains financing for acquisitions from EDF International

Clients Tanjong Plc, Tanjong Energy Holdings Sdn Bhd, Powertek Berhad and Kuasa Nusajaya (L) Ltd

Jones Day advised the Tanjong Plc group of companies ("Tanjong") on the acquisition financing from EDF International of Suez Gulf Power SAE, Port Said East Power SAE, and Egyptian Operating Company SAE and related replacement bank guarantee documentation. Specifically, Jones Day counseled Tanjong on: (i) the non-recourse acquisition financing obtained by its wholly owned special purpose vehicle, Kuasa Nusaja (L) Ltd, for the purchase of the entire issued share capital in two Egyptian power project companies (Suez Gulf Power SAE and Port Said East Power SAE) and one project operating company (Egyptian Operating Company SAE) from EDF International; and (ii) the bank guarantee and other credit support facilities which replaced similar facilities formerly procured by EDF International which supported the Egyptian project companies' obligations to the senior project financiers and certain Egyptian government entities.

The acquisition financing (provided by BNP Paribas and SMBC) comprised of a US$150 million non-recourse loan facility which represents approximately one-half of the purchase price and US$162 million in replacement credit support facilities for the project companies. The transaction represents one of the very few acquisition financings to be completed on a non-recourse basis in recent times in Asia.

The 682.5MW Suez Gulf power project is located on the western coast of the Gulf of Suez, approximately 52 kms south of Suez City, Egypt. The 682.5MW Port Said East power project is located on the coast of the Mediterranean Sea, approximately 45 kms south-east of Port Said City, Egypt.

The acquisition represents a strategic investment by the Tanjong group to expand its power generation business internationally and capitalize on its existing core competencies and expertise particularly in the operation and maintenance of power plants.

The acquisition has almost doubled Tanjong's total generation capacity to 2,855MW. Tanjong currently owns and operates three gas-fired power plants in Malaysia with a total generation capacity of 1,490MW.

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