Tuesday 19 June 2018

Dolphin wins $4.1 billion financing deal

Abu Dhabi, July 31, 2009

Dolphin Energy Limited has announced a $4.1 billion financing deal which aims to refinance the company’s current debt and partially fund the construction of its Taweelah-Fujairah Pipeline project.

Dolphin is a joint venture of Mubadala Development Company (51 per cent), Total (24.5 per cent) and Occidental Petroleum Corporation (24.5 per cent).

In late April, Dolphin secured financing commitments of $3.0 billion from 25 financial institutions. These commitments comprised $2.6 billion from local, regional and international financial institutions participating in the commercial bank facility and $400 million in export credit financing insured by the Italian Export Credit agency SACE, said a statement.

In late July, Dolphin priced its debut project bond issue which generated a strong investor demand globally, with an order book of $4.7 billion. Dolphin raised $1.25 billion from the bond market which has allowed a scale back of the commercial bank and SACE facilities to $1.4 billion and $218 million respectively. Additionally, Total and Oxy are co-lending approximately $1.2 billion to the project, it said.

All of the debt facilities are fully amortizing over 10 years, and the total debt package is $4.1 billion.

Commenting on the overwhelming response from both the bank and bond markets, Dolphin Energy’s CEO, Ahmed Ali Al Sayegh, said: “We have attracted an impressive list of financial institutions and debt capital market investors. They recognise the tremendous potential in this unique regional energy initiative.

“Strong fundamentals – a robust business plan, a solid long-term customer base, strong and committed shareholders and a highly experienced management team – ensure our business model is attractive to local, regional and international debt investors. We are delighted with the response,” he said.
“This is our third financing since we embarked on the project. Securing this institutional support means that with the support of our shareholders Mubadala, Total and Oxy, Dolphin will continue to make a significant contribution to the UAE and Oman’s gas requirements and create wealth, employment and growth opportunities for the citizens of the GCC.”

As majority shareholder, Mubadala played an instrumental role on behalf of Dolphin to secure financing. Commenting on this, Derek Rozycki, Mubadala’s executive director - project and corporate finance, said: “To have secured the Dolphin refinancing in these challenging market conditions demonstrates Dolphin’s strength of ownership and an appetite in the capital markets for issuers from the Gulf region. The attractive pricing combined with Dolphin’s credit quality has resulted in the overwhelming success.”

The total amount raised through the refinancing will be used to repay the $3.45 billion loan secured in 2005, provide 70 per cent of the construction costs of the 240-km Taweelah-Fujairah pipeline and pay for the financing fees related to the refinancing. The debt-equity ratio is less than 70:30, a highly conservative capital structure for an enterprise such as Dolphin, said the statement.

The margin on the commercial bank facility starts at 275 bps over Libor for the first three years, rising to 300 bps for the next three years and then 350 bps for the rest of the period. The SACE facility pays a margin over Libor of 175 bps, while the bond pays a coupon of 5.888 per cent.  – TradeArabia News Service

Tags: UAE | Dolphin | finance |

More Energy, Oil & Gas Stories

calendarCalendar of Events