SUMMER SALES
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4
deal of the month
WHAT'S NewS Nummer 4 August 1995
A stream of fascinating and creative deals flowed in as a
response to our request for contenders in the Deal of the
Year Competition. As the choice was so great and the
contenders so good, here is a taste of all of them.
Popular Rabobank in Madrid
has structured an ESP
8,000,000,000 peseta, five-
year loan for Spain's premier
sugar company, Ebro, by using
sugar as collateral.
'Sugar can only be traded here
by a very small number of
specialized companies,' says
team leader Carlos Gomez-
Arroyo. 'So we applied to the
regulatory body, SENPA, for
permission to trade the sugar
in case of default. SENPA will
also monitor the pledged
100,000 tonnes of sugar stored
around Spain.
Ebro Agrlcolaa. CompaMa da Allmnntacl
ln,SJV.
8.000.(100.000 Pesetas
Pr és tam o a Largo Plazo
Popular Rabobank Rabobank Francc
Crédit SuitK Banco Bi
bao Viicaya
Banque Pan bas Ban
co dl Napoli
Crcdito luüiano
Banco Agente
POPULAR Rabobank
'SENPA is obliged to purchase
sugar from a company that
gets into difficulties. Even be-
fore the devaluation of the
peseta, the ECU price for sugar
more than covers our commit-
ment. In addition, an indepen
dent organization known as
COMISMAR also checks the
stores on a regular basis. Plus
there's a third factor. Ebro's
stocks are insured and the
beneficiary is, of course, Rabo
bank.'
Popular Rabobank had no
trouble syndicating the loan.
Since then they are increasingly
approached by other banks
looking for participation op-
portunities or simply for ad-
vice on agri-related matters.
'And what's even better,' says
Gomez-Arroyo, 'this type of
structure can be applied to
other commodities, such as
sherry and oil. We're working
on it.'
A typical Pickle lease (see
What's in a Word, July issue)
has been arranged by Rabo
bank Belgium and Structured
Finance in Utrecht, in a 17.5-
year, US$ 157 million deal.
The Pickle lease concerns the
purchase through lease-back of
trams for the Flemish Public
Transport Company De Lijn
by an American investor. The
tax advantage of this trans
action to De Lijn amounted to
US$ 7.85 million, or five per
cent of equipment costs, at
close of business on 30 June
1995.
'Rabobank played a central
role in the negotiations,' con-
firm Ronald Dirksen and Erica
van Ooijen of Structured
Finance. They completed the
deal in cooperation with Erwin
Vandendriessche of Rabobank
Belgium. 'We also provided the
external loan and placed the
zero coupon equity free cash
deposit with Rabo New York.'
Earnings to the bank amount
to US$ 1.3 million.
Says Dirksen: 'We've gained a
track record in the cross-bor
der lease market for Big Tic
kets other than aeroplanes,
and we'11 be raising our profile
in this market even higher the
coming two years.'
So impressed is Akzo Nobel
with CBS' Project Finance in
Utrecht that it invited the team
and Rabobank Germany to
play a major role in setting up
a DM 100 million joint project
financing deal.
With local electricity supplier
Überlandwerk Unterfranken
(ÜWU), Akzo Nobel has set up
Kraftwerk Obernburg (KWO)
which will build and operate a
60 Megawatt combined heat
and power plant at Akzo
Nobel's most important fibres
plant in that town. Akzo
Nobel will buy steam and
electricity under a long-term
contract, while surplus
electricity will be sold to
ÜWU.
'For this complex deal, with its
large number of contracts,
non-recourse and off balance
sheet project financing was ar
ranged by Project Finance in
Utrecht,' says Roger Jansen. 'It
is underwritten equally by
Rabobank Germany and
Deutsche Girozentrale
Deutsche Kommunalbank, be-
cause the two parties to the
deal wanted a Dutch/German
banking consortium.'
When an aspiring property de-
veloper faced a number of
problems with his plan to
build 450 luxury houses in the
Dutch Betuwe region, he
turned to Rabobank. Rob de
Groot of M&A was able to
guide him through to a
successful conclusion.
Among other things, the devel-
oper was looking for a finan-
cial partner. De Groot and his
colleagues Nico Schrijen and
Jan Willem Slooten ap
proached the Royal BAM Con
struction Group in Bunnik
where, after some hesitation, a
deal was struck for Fort Bouw,
part of the BAM Group, to
take 50 percent of the share
capital in the developer's com
pany, Lingemeer Beheer. Fort
Bouw specializes in the indus-
trial fabrication of various
types of houses, and BAM was
not only interested in the turn-
over of NLG 150 million, but
also in the amount of work for
the factory over the next three
years.
Rabobank provided a NLG
3.5 million loan to purchase
the land and the member bank
in Betuweland provided a
NLG 250,000 credit line for
running costs. Through M&A's
mediation, Rabobank Betuwe
land was also able to obtain
exclusive project financing for®
new buyers. It is estimated that
this carries a liability of NLG
I 60 million, which is 40 percent
of the estimated sale value of
I the 450 houses.