Allen & Overy – Breaking New Ground in Vietnam

A&O advises on USD9bn Nghi Son Refinery deal, the largest international project financing the country has seen in over 20 years.

Further highlighting our reputation as one of the top go-to firms in the region, A&O is advising the export credit agencies and commercial lenders on the USD5bn financing of the Nghi Son Refinery and Petrochemical (NSRP) project in Vietnam. Total project costs are in excess of USD9bn.

Key facility providers include Japan Bank for International Cooperation (JBIC), The Export-Import Bank of Korea (KEXIM) and Nippon Export and Investment Insurance (NEXI), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) and 24 commercial lenders covered by guarantees or insurance from KEXIM and NEXI.

Located in Thanh Hoa Province, 200km south of Hanoi, construction of the refinery and associated infrastructure is scheduled to commence in July 2013, with the refinery expected to start commercial operations in 2017. The project will have the capacity to process 200,000 barrels of crude oil a day imported from the Middle East, producing a range of petroleum and petrochemical products including gasoline, diesel, jet fuel and polypropylene.

Commenting on the deal, A&O Tokyo partner, Simon Black, said: “This is a groundbreaking project for Vietnam, being the largest international project financing to take place since the country opened its doors to foreign investment in the early ’90s, and the first major foreign invested refinery and petrochemicals project in Vietnam. “As an import substitution project, it includes some innovative features to manage the foreign exchange and market risks in a robust legal and commercial structure. It was a massive effort by all involved.”

Partner Matthias Voss, noted: “This has been a tremendous project for the firm as it has given us the opportunity to showcase a fully integrated leading finance team operating out of Tokyo, Hanoi, Ho Chi Minh City and other offices in the region.

“We thoroughly enjoyed working with the Allens team representing NSRP and the sponsors, whose commercial and practical approach made it possible to conclude this complex financing in a highly compressed timeframe.” NSRP is a joint venture formed by Idemitsu Kosan Co., Ltd. (35.1 percent), Kuwait Petroleum Europe B.V. (35.1 percent), Vietnam Oil and Gas Group (25.1 percent) and Mitsui Chemicals, Inc. (4.7 percent).

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