Features

Analysis, interviews, roundtables, reports and more on the topics that matter to you.

Perspective
21 April 2014

JB's weekly round-up - 21 April 2014

Region:
Middle East & Africa, Americas, Asia-Pacific, Europe
Editor-in-chief
So, it’s that time of year again! The US Ex-Im annual conference takes off with more than 1,000 lenders, insurance brokers, US exporters, international buyers, and government experts all in attendance this week in Washington DC – Thursday 24 through to Friday 25 April.

 US Ex-Im annual meeting
So, it’s that time of year again! The US Ex-Im annual conference takes off with more than 1,000 lenders, insurance brokers, US exporters, international buyers, and government experts all in attendance this week in Washington DC – Thursday 24 through to Friday 25 April. A detailed agenda is available here. If you are attending and would like to meet up with TXF, please visit our stand in the exhibition hall and say hi to our wonderful Katy Rose and/or contact Dan Sheriff and Dominik Kloiber, who will also be there collating your favourite songs for the 'TXF Wall of Sound'. My apologies I am not there - I had to cancel my travel plans due to publication deadlines.

 Big bucks exchange as Chinese buy Las Bambas copper
It was a busy time early last week as Glencore Xstrata trousered a mere $5.85 billion for the sale of their Las Bambas copper mine to the China-controlled MMG Limited. Riba! they all shouted in Beijing. Well maybe not, as this deal was always on the cards as part of the overall Beijing moaning taking place about the supposed monopoly that would exist in the cu (jimmy!) world with the Glencore/Xstrata merger. Anyway – sold it is, and Glencore seem quite happy with the deal overall. MMG is doing a mainly cash payment, combined with a loan being arranged by China Development Bank, Bank of China and Industrial & Commercial Bank of China. I’m still poking around on that – so maybe more detail will follow at a later date. Meanwhile, the deal basics can be found on our website.
 
 Burning a hole in my pocket! 
So, what do you do with $5.85 billion burning a hole in yer trewser pocket? Buy an oil company of course! So that is exactly what Glencore Xstrata did – always thinking big – they waded in and bought Caracal Energy, which is working in Chad. Hard to ascertain the final price – given that Caracal shares hit the roof with a 60%+ rise at the time, but final consideration could be around $1.5 billion. What was interesting with this deal was that it scuppered Caracal’s proposed takeover of TransGlobe Energy. Full details can be found in the news item.

What is also interesting is just how much geo-corporate big games are now being played out in the African energy sector. And if you didn’t know – a caracal, is a really beautiful African wild cat, also known as the desert lynx. Not to be confused with a coracle, which is a small round-shaped traditional boat from Wales. If anyone tries to sell you an Irish version, don’t buy it.
 
 Quantum physics it is not! Just smart structuring.
First Quantum Minerals finally sorted out lots of issues about development plans and last week signed and drew down on its $2.5 billion, five-year term loan and revolver. The transaction is now out in general syndication and moving very smoothly with close expected in May. Congratulations to Quantum on an excellent job in a series of financial restructuring. TXF lists all the measures that the company has employed of late in this full review. Check out the news report for full details
 
 Ahoy there ECA mateys!
In the ECA-backed financing sector, hardly a week goes by without there being another financing development in the shipping sector. Norwegian-owned Hoegh LNG was back in the frame with the firming up of its $412 million secured credit facility for the financing of its third and fourth floating, storage and regasification units (FSRUs) being built in South Korean yards. Discover all the banks involved in the news report.
 
While in another stream of the shipping sector – this time cruise vessels – dominated by European shipyards, Hong Kong-headquartered Star Cruises has signed a €600 million ($830 million) loan arrangement with KfW IPEX-Bank, Crédit Agricole and DNB Bank for the financing of the company’s latest newbuild. The vessel is being built by Meyer Werft Shipyards in Germany and ECA support is, of course, being provided by Euler Hermes AG.
 
 Zambia gets a boost with hydro project
Development banks have combined to provide financing for the 120MW Itezhi Tezhi hydro power project on the Kafue River in Zambia. The project, which has been beset by various delays, is a vital one for the country. The $142 million financing was led by the African Development Bank, in conjunction with FMO, Proparco and the DBSA.
 
 JBIC in direct loan with UK rail project 
In true modern-day style, the recent decision by Japan’s JBIC to provide a direct loan to Agility Trains East in the UK is a sign of how important the transaction and long-term involvement in the UK rail sector is to Japanese companies – in this case Hitachi. In this major project financing development JBIC has come in with a £860 million ($1.44 billion) direct loan. The overall co-financing with commercial banks amounts to £2 billion ($3.36 billion). Find out more about the lenders and Hitachi Rail’s operations in the UK in the comprehensive news report:

 On the up
In personnel developments, congratulations to Annette Maresh at US Ex-Im who has been promoted to vice-president for trade finance: In the role, Maresh will be responsible for a portfolio of $5 billion.
 
In the legal sphere, law firm Dentons is extending its presence in Africa with a new office in Cape Town, and plans to expand further with an office in Johannesburg and in Francophone Africa later in the yearThe new offices will focus on the natural resources and infrastructure sectors in the main.
 
 And finally…..
The World Trade Organisation (WTO) revealed last week that global trade will grow at a modest rate of 4.7% in 2014, and a slightly faster rate of 5.3% in 2015. Full details of the WTO report and forecasts can be found here. And for all of you number junkies, the WTO also reported that in 2013, the dollar value of world merchandise exports rose 2.1% to $18.8 trillion.
 
That’s all from me folks.
 
Cheers
 
JB

Jonathan Bell
Editor-in-Chief

Interested in finding out more?
Ask the analyst


You might also like


Perspective
22 March 2024

TXF MENA 2024: Top takeaways

ECA-backed project finance took centre stage this year at TXF MENA 2024 with the spotlight on energy transition, longer tenors, and untied lending. ECA flexibility contributed...

Interview
26 March 2024

Keynote: EIFO’s Lundquist on turning professional pessimism...

The Export and Investment Fund of Denmark (EIFO) has the ‘gift of wind’ which has helped it position itself as a changemaker in renewable energy financing. But it’s not all...