Thursday, August 9, 2018

PPP Contracts - Advice to consortium led by Helport S.A.

We advised a consortium led by our client Helport S.A. (member of the Corporación América group) and also integrated by Panedile Argentina S.A.I.C.F., SA of Obras y Servicios COPASA and Eleprint S.A. (the "Consortium") in the presentation of six (6) offers for the bidding process of the Public-Private Partnership regime for the project "Safe Highways and Routes Network - Stage 1". The Consortium was the winner in two (2) of the six (6) road corridors: Corridor "E", which includes routes connecting Rosario and Buenos Aires and Corridor "F", which includes routes connecting Rosario and Córdoba.

In order to sign the corresponding Public-Private Partnership contracts (the "PPP Contracts"), the Consortium incorporated two public limited companies, namely Pan American Corridor I S.A. and Pan American Corridor II S.A. (the "SPV"). The total representative amount of the payments that the SPV will receive under the investment payment titles (TPI) is US $ 1,892,423,862 for the road corridor E and US $ 1,339,992,504 for the road corridor F.

On July 26, both companies signed the PPP Contracts with the National Highway Administration -as Contracting Entity-. As a prerequisite for the signing of the PPP Contracts, the SPVs had to present guarantees of financial closure, works and services for a total of approx. US $ 178,000,000 (computed by both brokers), which were granted by Banco de Galicia S.A., Banco Itau S.A., Banco BICE, UBS and Citibank.

In accordance with the provisions of the PPP Contracts, the financial closing must be achieved within twelve (12) months from the date of signature of the contract, that is, July 2019, a term that may be extended by three additional months in case of giving a special assumption. To achieve financial closure in both corridors, the SPVs must prove that they have funds for a total equivalent to 54% of the Total Amount Required TPI, which represents approximately US $ 1,745,000,000. SPVs are expected to achieve financial closure through the issuance of bonds in international markets under Rule 144A and Reg S, through another specific purpose company, which will subsequently acquire the TPIs to the SPVs.

While the tasks to reach financial closure through a bond issue in international markets begin, it is expected to sign agreements with local financial entities to obtain working capital in order to start the works.

The Consortium is currently working with the international banks UBS and Citibank NA and other local banks in order to obtain the necessary financing for the project.

M. & M. Bomchil advised the Consortium in the bidding stage, in the presentation of bids and in the signing of the PPP Contracts by Brokers "E" and "F". The team was integrated by Tomás M Araya, Victoria Funes, Pedro De Elizalde, Laura Zinnerman, Maria Elisa Simunovich, Mariana Viola and Mercedes Bossi (in contractual and financial matters), Francisco Gutierrez, Federico Campolieti and Ximena Daract Laspiur (on regulatory issues) and Ariadna Artopoulos and Francisco Altamirano (on tax issues). From Helport S.A, Andrés Zenarruza, Candela López Linetti and Jorge Romano had an active participation.