Institutions fail to raise funding for deal before deadline
Singapore-based Sembcorp will have to complete the financing of its $1bn Salalah power and water project in Oman with fewer Chinese banks than it originally wanted, according to bankers working on the deal.
Several of the Chinese banks that had offered to partly finance the project cannot raise their share of the $750m debt financing before the deadline in early November.
Up to six Chinese banks had offered to lend about $375m or half the debt Sembcorp is seeking.
Now that several banks have withdrawn their support, the two remaining Chinese banks will underwrite the $375m and then sell on the debt to the other Chinese banks after Sembcorp’s November deadline.
The bankers did not know the names of the two Chinese banks that will underwrite the debt or the names of the other institutions that cannot lend money to Sembcorp before its deadline.
Sembcorp needs Chinese banks to underwrite half the overall debt so that Chinese export credit agency Sinosure will insure the deal.
The remaining $375m debt will come from Sembcorp’s financial adviser, the UK’s Standard Chartered Bank, and various local and international banks.
You might also like...
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.