Clifford Chance advises lenders on signing of US$4.96 billion facility for development of major motorway in Turkey
25 June 2015
- Nicholas Wong, David Metzger, Chad Bochan, , , ,
- Hong Kong
Clifford Chance advises lenders on signing of US$4.96 billion facility for development of major motorway in Turkey
Leading international law firm Clifford Chance has advised the finance parties on the signing of a US$4.96 billion facility to Otoyol Yatırım ve İşletme A.Ş. in connection with the financing of Phase II B of the Gebze-Orhangazi-Izmir motorway (including the Izmit Bay Crossing Bridge) and the refinancing of Phases I and II A.
Phase I of the project involves the design, construction, completion, operation, and maintenance of the 3km Izmit Bay Crossing suspension bridge and one section of the Gebze-Orhangazi-Izmir motorway. Phase II A consists of the second section, connecting the Izmit Bay Crossing to the city of Bursa. Phase II B consists of the remaining two sections of motorway. In total, the project includes the construction of 421km of new motorway, including the widening of and taking over of certain existing sections.
The overall project represents the largest infrastructure project ever financed under Turkey's BOT law. When completed, the six-lane motorway will provide an important transportation link between the Istanbul metropolitan area and Izmir, the largest city on Turkey's Aegean coast and a major port, and is expected to significantly reduce travel times between the two cities.
The sponsors of the project are Nurol İnşaat ve Ticaret A.Ş., Özaltın İnşaat Ticaret ve Sanayi A.Ş., Makyol İnşaat Sanayi Turizm ve Ticaret A.Ş., Astaldi S.p.A. and Göçay İnşaat Taahhüt ve Ticaret A.Ş.
The refinancing of phases I and II A and the financing of phase II B was arranged by a group of leading Turkish banks - Akbank T.A.Ş., Finansbank A.Ş., T.C. Ziraat Bankası A.Ş., Türkiye Garanti Bankası A.Ş., Türkiye Halk Bankası A.Ş., Türkiye İş Bankası A.Ş., Türkiye Vakıflar Bankası T.A.O. and Yapı ve Kredi Bankası A.Ş., along with Deutsche Bank AG's London branch, each of which provided an equal share of the facility. Total project costs are estimated to be US$7.2 billion.
The project is notable for its novel phased approach to project financing, significant project cost and financing requirement, and for its technical complexity, involving the construction of massive structures such as Turkey's longest motorway tunnel, 35 viaducts, 22 interchanges, 3 tunnels, 187 bridges, and the Izmit Bay Crossing, which will be one of the world's longest suspension bridges upon completion.
Partner Nicholas Wong, Co-head of Clifford Chance's Worldwide Projects Group who led on the deal, said: "We are delighted to have been involved in all phases of the financing of the Gebze-Orhangazi-Izmir motorway. This project, together with many of the major energy and infrastructure projects that we have developed and financed in Turkey, will greatly assist in the further development of the Turkish economy and benefit millions of people."
Nick was assisted by counsel Chad Bochan and associates Monika Gajic and Michael Bailey from Sydney, senior associate Henry Yip and associate Nathanael Lim from Singapore. Partner David Metzger from London provided construction and operation and maintenance advice.
Verdi provided Turkish law advice to the lenders. Legal and structuring advice was provided to the Sponsors and the Borrower by Hergüner Bilgen Özeke Attorney Partnership.