Abu Dhabi Sewage Services Company has secured a two-month extension for an $85m bridging loan to build a wastewater treatment plant after banks failed to arrange $500m in long-term financing before the original loan expired in July.
The three banks providing the loan, France’s Calyon and Natixis, and National Bank of Abu Dhabi, have agreed to extend the loan until the end of September.
Abu Dhabi Sewage Services has used the loan to carry out 70 per cent of the design work and 10 per cent of the construction on the second Independent Sewage Treatment Plant project. Bankers who worked on the extension of the bridging loan say the company will have longer-term financing in place by the end of September.
In May, Meed reported that bankers expected to raise $500m structured as a nine-year loan, with an option to extend the loan by an additional 11 years, a structure called mini-perm. Bankers will now lend the $500m as a long-term loan, rather than a mini-perm.
“At the time of initially taking this to market at the beginning of the year, most projects were looking at mini-perm structures, but now the market is looking towards long-term financing,” says one UAE-based banker working on the deal.
“The structure of the long-term financing is still under negotiation, but the deal should be completed by the end of September.”
The project involves the construction of treatment plants in Al-Ain and Abu Dhabi by a consortium of France’s Veolia and Belgium’s Besix.
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