Zhuhai power project wins funds at last
Cheung Kong (Holdings) has secured funds for a Zhuhai power plant which is expected to be included in the group's proposed spin-off vehicle for infrastructure projects.
Eleven participants have been lined up to provide US$125.5 million for the $1.2 billion project after a delay of about six weeks.
The financing was said to be held up by uncertainty whether Japan would approve export credit for the project.
A spokesman for arranger HSBC Investment Bank Asia, Susan Urkevich, said yesterday that final negotiation on documentation of export credit of $670 million was being held with the Export and Import Bank of Japan and Japan's Ministry of International Trade and Industry.
'It is not something about obstacles or difficulties,' she said.
'It is just because details of numerous documentations are being finalised now,' Ms Urkevich said.
She was confident a final agreement would be reached this month.
The project is a joint venture between Guangdong Electric Power Holding Co, Electric Development (Group) Co of Zhuhai, Cheung Kong and Hutchison Whampoa.
The shareholders will together contribute $360 million to the project.
There will also be a yuan loan of $65 million.
Mitsubishi Heavy Industries and Mitsubishi Corp will provide two 700 MW coal-fired units, financed by the export credit.
The original deadline for banks to indicate their response was April 22.
The market is concerned about the delay and the spread is said to be tight.
Ms Urkevich said the financing was slightly over-subscribed.
She declined to reveal details of the letters of support by the state and the provincial government.
Sovereign guarantees are not available for the project.
With China Development Finance Co and HSBC as arrangers, Bank of China and the Hongkong and Shanghai Banking Corp are senior lead managers.
Other participants are the Dai-Ichi Kangyo Bank, Fuji Bank, Nippon Credit Bank, Sakura Bank, Sanwa Bank, Bank of China (Luxembourg branch), Bank of China (New York branch), Sumitomo Trust & Banking Co and Bank of China (Sydney branch).
