Deal News: China Development Bank (CDB) has just completed its first project financing in Greece. Piraeus Container Terminal (PCT) has benefited from the €339.4m loan by CDB, the proceeds of which will be used by PCT to construct and develop piers at the Port of Piraeus in Greece.
A team of lawyers from the Hong Kong and Paris offices of Orrick, Herrington & Sutcliffe advised PCT and its parent COSCO Pacific. PricewaterhouseCoopers provided the financial advice.
Christopher Stephens, Asia managing partner of Orrick, said that this was a precedent-setting financing. The importance of this deal in facilitating cargo business between China and Greece was also recognised by President Hu Jintao and Greek Prime Minister Kostas Karamanlis, who both witnessed the signing ceremony.
“This is just one example of many more outbound investment and financing transactions that we’ll see coming out of China,” said Stephens. “China’s outbound investments more than doubled from US$20bn in 2007 to US$52.2bn in 2008, and many Chinese companies are finding unique opportunities in the current global environment to expand strategically and carefully abroad.”
COSCO Pacific was also pleased with the result of this deal. “This is a very important financing for COSCO Pacific, as well as for CDB, to develop its business in Hong Kong and Europe. I think it’s a win win situation,” said Michelle Hung, in-house counsel for COSCO Pacific.
Fortsakis, Diakopoulos, Mylonogiannis & Associates also acted as special Greek counsel to PCT and COSCO Pacific. CDB engaged PC & Woo in Hong Kong, Zhong Lun Law Firm in Beijing and Karatzas & Partners in Athens, Greece.
The transaction involved a number of parties spread out across several jurisdictions and Orrick played an important role as international counsel for COSCO Pacific. “They have done a good job, especially under the very capable leadership of Chris Stephens,” Hung said.
This project financing is just one element of the €4.3bn 30-year concession secured by PCT to develop and operate piers 2 and 3 at the Port of Piraeus. Piraeus is set to become a regional hub for commercially and strategically important shipping routes. COSCO Pacific is the fifth largest container terminal operator and the second largest container leasing company in the world.
Orrick was a finalist in the ALB China Law Awards 2009 for Project Finance Deal of the Year for its role in advising COSCO Pacific on the concession to develop and operate two piers in Piraeus.
Michelle Hung and her colleagues at COSCO Pacific, meanwhile, took home the Shipping In-house Team of the Year award.
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