Ajman seals project finance

10 April 2006

Financial close was reached on 6 March on a $100 million refinancing package for the $140 million Ajman integrated wastewater project. The 20-year facility has been extended to Ajman Sewerage (Private) Company by ING Bank and is underwritten by a monoline insurance wrap from US firm Ambac, which was provided after the project received an investment-grade credit rating from Standard & Poor's and Moody's Investors Service. The new credit facility replaces a 14-year, $77.5 million club deal signed in January 2003 with Hypovereins-bank, Bayerische Landesbank, United Arab Bank and Mashreq-bank. The existing lenders were fully repaid following a complete drawdown on the facility.

The refinancing completes a restructuring of the project that saw Belgium's Besix and France's Veolia replacing the UK's Thames Water as the principal shareholders on the project. Under a restructuring agreement signed on 30 January, Thames Water's 60 per cent shareholding in the project company has been split between Besix and Veolia, with Besix taking a 40 per cent shareholding in the company. Veolia and the government of Ajman each have a 20 per cent stake while Belgium's Six Construct, an affiliate of Besix, and the US' Black & Veatch each have 10 per cent.

The restructuring also saw Thames Water's 25-year operation and maintenance contract transferred to a newly established operating company known as Moalajah, which has been formed by a joint venture of Six Construct, which has 67 per cent, and Veolia. A new consortium of Besix with Black & Veatch has the engineering, procurement and construction (EPC) contract and has introduced an accelerated construction programme that will see the facilities completed in 30 months (MEED 3:2:06).

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