DUBAI, March 9 (Reuters) - State-run utility Saudi Electricity Co (SEC) and its partners in a gas-fired power plant in Saudi Arabia have refinanced a $1.14 billion loan for the project, an executive and sources told Reuters.
The deal replaces financing taken out in 2010 for the Riyadh PP11 independent power project, which is 50 percent owned by SEC, the sources said.
A further 20 percent is owned by French company Engie , with the remaining 30 percent split evenly between Saudi Arabia’s Aljomaih Holding and Blue Horizon, a subsidiary of Japan’s Sojitz Corp. The plant became operational in 2013.
Many companies in the Gulf have been seeking to refinance debt as liquidity has been squeezed by a drop in oil prices.
Jean-Baptiste Roux, a United Arab Emirates-based financial adviser at Engie, said the refinancing aimed to improve the debt terms and profitability of PP11, also named Dhuruma Electricity Co.
The new debt facility includes a mini-permanent structure that is usually used until a project has been completed and can start producing income, the sources said. It includes an 85 percent cash sweep, typically used to funnel excess cash into repaying debt, and a subsequent margin step-up, the sources said.
The refinancing comprises a U.S. dollar tranche and an Islamic tranche. The dollar tranche totalled $505 million, with participating banks including Sumitomo Mitsui Banking Corp, Mizuho, Sumitomo Mitsui Trust Bank, Mitsubishi UFJ Financial Group, Export Development Canada, KfW IPEX, Societe Generale and Standard Chartered.
Two different Islamic portions totalled $635 million, with the banks involved including Saudi Arabia’s National Commercial Bank and Alinma, Samba Financial Group, Banque Saudi Fransi and Saudi British. (Additional reporting by Tom Arnold; Editing by Andrew Torchia and David Goodman)