The SPV behind the Autopista Río Magdalena 2 project in Colombia expects to close a COP 1.6trn (USD 565m) financing package this year under new ownership.
Australian investor IFM Global Infrastructure Fund, through its Spanish subsidiary Global InfraCo, in October agreed to acquire 100% of shares in OHL Concesiones. The OHL board approved the transaction in early January, meaning the deal should complete in the first quarter pending regulatory approvals.
IFM Global Infrastructure Fund, which is part of the larger asset manager IFM Investors, is an open-ended fund with AUM of USD 14.5bn. It focuses on core, brownfield assets primarily in North America and Europe and other selective markets with strong rule of law, according to Inframation Deals.
Lenders’ appetite might increase with the new ownership, Inframation understands after speaking to various local and international financiers. Last March, IDB Invest said it was considering a long-term USD 100m loan to the project, as part of a multi-currency deal, but no transaction has closed to date.
Financiers had concerns about OHL’s financial health, as the Spanish engineering and construction firm had lost its investment grade with a Caa1 rating by Moody’s. The rating agency upgraded OHL to B3 from Caa1 later in December.
Some lenders that had decided not to participate in the project could be inclined to reconsider under the new owner, it is understood.
The sponsor seeks a COP 1.6trn financing package to fund construction of the road, while contributing COP 400bn in equity investment. The 144km highway is expected to cost COP 1.3trn.
The multi-currency deal would include an 18-year COP 1trn tranche and an 18-year USD 200bn portion, a source familiar said.
IDB Invest remains supportive of the project and is evaluating a credit facility of USD 100m, a source briefed said.
The financing package will be backed by government availability payments called vigencias futuras denominated in USD (25%) and COP (75%) and cash flow from the toll roads once the road becomes operational. Top-up mechanisms in the concession contract will ensure income in case traffic falls short of an agreed minimum threshold.
BTG Pactual and Itaú Corpbanca are serving as financial advisors to the sponsor.
Clifford Chance is serving as international legal counsel to the lenders, while Philippi Prietocarrizosa Ferrero DU & Uría is the local legal advisor. Paul Hastings is the international legal advisor to OHL, while Gómez Pinzón serves as local legal counsel.
The national development bank (FDN) had approved a long-term COP 200bn (USD 58.6m at the time) senior credit facility in January 2015 to support the construction of the road in January 2016.
In December 2014, the SPV signed a PPP contract with the national infrastructure agency (ANI) to design, finance, build, operate and maintain the road.
The highway is within the Antioquia department in northwest Colombia. It includes the construction of 37km of new road between Remedios and Vegachí, 35km of new road between Vegachí and Alto de Dolores, and revamping 64km of existing roads between Alto de Dolores and Puerto Berrío to connect with the Ruta del Sol highway.
It also contains the construction of 43 bridges, including a 1.5km bridge over the Magdalena River.