CCB International contributes $12 million AUD to a $193.75 million AUD syndicated loan for the acquisition of Qenos Holdings and general corporate purposes (Linked to Record ID#99449 and #99451)

Project narrative

Between September 22 and 28, 2006, a syndicate of 12 banks — including CITIC Ka Wah Bank, CCB International (Holdings) Ltd, and Industrial and Commercial Bank of China (Asia) Limited (ICBC (Asia)) — entered into a $193.75 million AUD-equivalent syndicated multi-tranche loan agreement with ChemChina International Holding (H.K.) Ltd. — a Hong Kong-incorporated subsidiary of Chinese state-owned chemical company China National Chemical Corporation (ChemChina) — to finance the acquisition of Australian polyethylene producer Qenos Holdings Pty. Ltd. and with Qenos Holding for general corporate purposes. This loan was divided into three tranches: a $113 million AUD-equivalent term loan tranche with a maturity period of six years and an interest rate of BBSW or LIBOR plus 170 basis points (bps), a $50 million AUD revolving credit tranche with a maturity period of six years and an interest rate of BBSW plus a margin of 150 bps, and a $30 million AUD term facility tranche with a maturity period of three years and an interest rate of BBSW plus a margin of 150 bps. CITIC Ka Wah Bank, CCB International, and ICBC (Asia) each contributed $12 million AUD. Record ID#99449 captures CITIC Ka Wah Bank's contribution. Record ID#99450 captures CCB International's contribution. Record ID#99451 captures ICBC (Asia)'s contribution. In addition to the Chinese state-owned banks, the following lenders contributed the respective amounts to the loan syndicate: Standard Chartered Bank PLC ($16.4 million AUD), Australia and New Zealand Banking Group Limited (ANZ) ($30 million AUD), Calyon (Australia) Limited ($30 million AUD), the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) ($20 million AUD), HSH Nordbank (Hong Kong) ($12 million AUD), Norddeutsche Landesbank Girozentrale (NORD/LB) ($12 million AUD), GE Commercial Finance ($7.5 million AUD), and ICICI Bank (Hong Kong) ($7.5 million AUD). WestLB AG also contributed an unspecified amount to the loan syndicate. Standard Chartered Bank served as sole mandated lead arranger that launched syndication. CCB International, CITIC Ka Wah, ICBC (Asia) ANZ, Calyon (Australia), BTMU, HSN Nordbank, and WestLB joined in syndication as lead arrangers. GE Commercial Finance and ICICI joined in syndication as arrangers. Senior syndication was launched by Standard Chartered between June 23 and 30, 2006. Syndication was completed between August 11 and 17, 2006, bringing 11 banks on board. At the time of the acquisition, Qenos was Australia's sole polyethylene producer with annual sales of $800 million AUD ($595 million USD), producing 397 million pounds of high-density polyethylene, 198 million pounds of low-density polyethylene, and 265 million pounds of linear low-density polyethylene, 88 million pounds of polypropylene, 1.1 billion pounds of ethylene, 110 million pounds of propylene, and 44 million pounds of butadiene annually. On October 31, 2005, the owners of Qenos, Orica Ltd. (50% stake) and Exxon Mobil Corp. (50% stake) agreed to sell Qenos to ChemChina, for an expected consideration of about $200 million AUD ($148.7 million USD), subject to Australian and Chinese regulatory approvals, with the transaction to be completed by early 2006. The transaction was expected to benefit ChemChina due to Qenos's workforce, technical expertise, customer base, and logistics infrastructure and systems. Qenos's assets included a polyethylene plant in Botany Bay, Sydney. The Qenos joint venture had been experiencing difficulties due to rising input costs and movements in the global price of plastics. In 2003, Orica wrote down its entire $123.2 million AUD value of Qenos due to a series of losses; even with the sale, it had an after-tax loss of $34 million AUD from a 2004 debt restructure and costs associated with the sale. The acquisition was completed on April 3, 2006. Qenos was renamed Qenos (Australia) Pty Ltd. China National Bluestar (Group) Co., Ltd, a subsidiary of ChemChina, became the parent of Qenos.