Investors raise $7.96 billion in debts for ADNOC pipeline deal

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Investors raise $7.96 billion in debts for ADNOC pipeline deal

A consortium comprises of a perspicacious bunch of investors had signed off a $7.96 billion in commercial debts to support the $10 billion gas pipeline deal it had reached with the ADNOC, the Abu Dhabi’s state-backed oil and gas company, banking sources familiar with the issue had unveiled on Wednesday.

In point of fact, the consortium that had reached a $10 billion accord with the ADNOC over its gas infrastructure project, comprises of six investment funds such as US-based Global Infrastructure Partners and Brookfield Asset Management, Singapore’s Sovereign wealth find GIC, Canada’s Teachers’ Pension Plan Board and NH Investment & Securities alongside Italy’s Snam.

On top of that, latest announcement of the consortium comes over the heels of a Tuesday’s announcement from ADNOC that said the state-backed Abu Dhabi National Oil Company had reached a $10 billion gas pipeline deal with the consortium comprises of the aforementioned companies, while under the financial terms of the deal, the consortium would hold a 49 per cent stake in ADNOC’s newly formed subsidiary ADNOC Gas Pipeline Assets and ADNOC would keep the controlling stake of 51 per cent.

Two-year $7.96bn loan to support the consortium’s acquisition of 49 per cent stake

In tandem, the consortium, whose $7.96 billion in debts to acquire the 49 per cent stake in ADNOC Gas Pipeline Assets were arranged by Abu Dhabi Commercial Bank, Spain’s Banco Santander and BNP Paribas, UK’s HSBC and Standard Chartered, Japan’s Mizuho and MUFG as senior mandated lead arrangers, had also added on Wednesday that the two-year debt would support the consortium’s acquisition, while under the gas infrastructure deal, ADNOC would lease the ownership of its ADNOC Gas Pipelines for 20 years in exchange for a volume-based tariff and the operational profit obtained through the newly formed subsidiary would be disbursed among the investors as free cash in form of quarterly dividends.

Apart from the $7.96 billion raised in form of debts under a two-year loan accord, the consortium would proffer the remaining $2.04 billion in form of equity, valuing the ADNOC gas pipeline assets at $20.7 billion.