Syndicated financing of largest private M&A transaction in the UAE
(Leighton’s 45% stake in Al Habtoor)
Clyde & Co have advised on the syndicated financing of the largest private sector acquisition by a foreign company of shares in a UAE company, Leighton Holdings’ US$715 million acquisition of a 45% stake in Al Habtoor Engineering Enterprises.
Clyde & Co advised Abu Dhabi Commercial Bank, Mashreq Bank PSC, The Royal Bank of Scotland PLC and the Hong Kong and Shanghai Banking Corporation (HSBC) in providing a US$434 million syndicated financing facility to Leighton, enabling it to acquire a 45% interest in Al Habtoor Engineering. The facility was provided on a structurally subordinated non-recourse basis to Leighton Holdings. This debt financing made up 60% of the overall acquisition funding with the remaining 40% as cash.
The Clyde & Co team advising on the transaction was led by Dubai-based finance partner Ashley Painter and assisted by associates Peter Caley and James Ireland.
Painter said of the deal: “Considering the difficult credit market conditions, the fact that the facility was signed represents confidence in the underlying business of Al Habtoor Engineering, the strength in the sponsors of the project, Leighton Holdings and Al Habtoor, and the dynamic nature of the underlying construction and engineering sectors in the UAE and Gulf economies. This is a very significant transaction.”
Leighton Holdings Limited is Australia’s largest project management and contracting group while Al Habtoor Engineering Enterprises is one of the largest construction companies in the Gulf region and is responsible for many of the Gulf’s landmark building projects, including the iconic Burj Al Arab seven star hotel, Dubai International Airport and the Saadiyat Island Expressway in Abu Dhabi. The new company will be known as Al Habtoor-Leighton.
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