Narrative
Full Description
Project narrative
In early August 2017, a syndicate of 12 banks — including China Construction Bank Corporation (CCB) — entered into a €1.950 billion EUR ($2.34094 billion USD) syndicated loan agreement with Sarvana S.à r.l. — a Luxembourg-incorporated special purpose vehicle (SPV) and joint venture of British Virgin Islands-incorporated Swift Returns Global Limited, a wholly-owned subsidiary of British Virgin Islands-incorporated European Household Infrastructure Limited, a wholly-owned subsidiary of Bermuda-incorporated, Hong Kong-headquartered and Stock Exchange Hong Kong-listed CK Infrastructure Holdings Limited (CKI), a company majority-owned by Cayman Islands-incorporated CK Hutchison Holdings Limited (35% equity stake) and British Virgin Islands-incorporated Admiral King Limited, a wholly-owned subsidiary of British Virgin Islands-incorporated Splendour Success Holdings Limited, a wholly-owned subsidiary of Cayman Islands-incorporated, Hong Kong-headquartered and Stock Exchange of Hong Kong-listed CK Asset Holdings Limited (formerly known as Cheung Kong Property Holdings Limited) (65% equity stake), two companies that have Hong Kong billionaire Li Ka-shing as a substantial shareholder — to finance their acquisition of a 100% stake in ista Luxemburg GmbH. This loan was divided into three tranches: a €1.600 billion EUR ($1.92077 billion USD) term loan tranche with a maturity period of three years with two one-year extension options, a final maturity date of December 31, 2020, and an interest rate of EURIBOR plus an initial margin of under 100 basis points (bps) before rising to about 150 bps; a €250.00 million EUR ($300.12 million USD) capital expenditure facility tranche with a maturity period of five years and a final maturity date of December 31, 2022; and a €100.00 million EUR ($120.05 million USD) revolver tranche with a maturity period of five years and a final maturity date of December 31, 2022. The proceeds were to be used by the borrower to support the €4.500 billion EUR ($5.40216 billion USD; $41.400 billion HKD) acquisition of a 100% stake in German heat and water sub-metering company Ista from controlling shareholder CVC Capital Partners' CVC Fund V and minority shareholder Canada Pension Plan Investment Board, with €2.550 billion EUR ($3.06122 billion USD) in cash equity from the sponsors. Financial close on the loan was reached on December 31, 2017. Each of the 12 lenders, including CCB, contributed €133.33 million EUR ($160.06 million USD) to the €1.6 billion EUR term loan tranche, €20.83 million EUR ($25.01 million USD) to the €250 million EUR capital expenditure facility tranche, and €8.33 million EUR ($10.00 million USD) to the €100 million EUR revolver tranche. Record ID#102312 captures CCB's contribution to the €1.6 billion EUR term loan tranche. Record ID#102313 captures CCB's contribution to the €250 million EUR credit facility tranche. Record ID#102314 captures CCB's contribution to the €100 million EUR revolver tranche. In addition to CCB, the following lenders contributed to the loan syndicate: BNP Paribas S.A., Commerzbank AG, ING Bank N.V., Intesa Sanpaolo S.p.A., Mizuho Bank, MUFG Bank, Ltd., National Australia Bank Limited (NAB), Royal Bank of Canada (RBC), the Bank of Nova Scotia (Scotiabank), Sumitomo Mitsui Banking Corporation (SMBC), and UniCredit S.p.A. Mizuho served as facility bank. At the time of the acquisition, ista was a fully integrated energy management services providers with market positions in Germany, Denmark, the Netherlands, France, Italy and Spain, with ista Luxemburg GmbH as the holding company. Ista provided energy services for over 12 million apartments and commercial properties in 24 countries In 2016, Ista generated €370.1 million EUR adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2016, and €850.4 million EUR in total revenues, with Germany accounting for 57% of revenue in 2016. The acquisition of ista was CKI's first investment in Germany. In May 2017, a formal auction for Ista was launched. On July 25, 2017, CKI put in a binding offer to acquire ista. Then, on July 27, 2017, Lamarillo S.à r.l. — a direct wholly owned subsidiary of Sarvana S.à r.l. — entered into a sale and purchase agreement with Trius Holdings S.C.A. with Lamarillo as purchaser for the acquisition of all of the shares and preferred equity certificates in issue of ista Luxemburg GmbH. On July 27, 2017, CKI, CKA, and Sky Master Ventures Limited — a wholly owned subsidiary of CKA — entered into a joint venture formation agreement and shareholders' agreement to establish Sarvana S.à r.l. and to partly fund the proposed acquisition of ista Luxemburg GmbH. Subject to regulatory and anti-trust approvals and shareholder approval from CKI and CKA, the acquisition was expected to be completed in the fourth quarter of 2017. CKI's and CKA's shareholders approved the acquisition on October 11, 2017. The acquisition was then completed on October 18, 2017.