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Africa

CASE STUDY: Yinson Debuts Largest Murabaha FPSO Financing in Africa to Date

Yinson Holdings Bhd’s wholly-owned subsidiary, Yinson Production (West Africa) Pte Ltd successfully converted conventional debt into a sharia-compliant format through the company’s maiden Islamic transaction, the proceeds of which were used to finance the conversion of existing facilities into a floating production, storage and offloading unit (FPSO).

Apr 18, 2017 // 3:17PM

Background

On 28 January 2017, Yinson Holding announced that the consortium of Yinson Production (West Africa) Pte Ltd. (YPWA) and Yinson Production West Africa Limited (YPWAL) were awarded a contract for the chartering, operation and maintenance of a FPSO facility by ENI Ghana at the Offshore Cape Three Points Block, located in the Tano Basin approximately 60 km off the coast of Ghana.

YPWA and YPWAL sought fresh financing to part fund the conversion of very large crude carriers into an FPSO, and refinance existing senior and conventional project financing facilities.

One of its main objectives was to convert older, conventional debt into a sharia-compliant format – which it successfully accomplished.

Transaction Breakdown

The US$780mn senior secured murabaha term financing carries a 7-year tenor and a 13-month grace period.

The facility was provided by a syndicate of domestic Malaysian and international lenders including CIMB Bank Bhd Labuan Offshore Branch, Export-Import Bank of Malaysia Bhd, Intesa Sanpaolo S.p.A Singapore Branch, Maybank International Labuan Branch, OCBC Al-Amin Bank Bhd, Standard Chartered Bank, and United Overseas Bank Ltd.

Maybank Investment Bank Berhad acted as MLA and Global Coordinator on the transaction, which was Yinson Group’s maiden Islamic FPSO financing and one of the largest Islamic FPSO financing deals in Africa to date.

The transaction is expected to cover up to 78% of the total cost of converting a number of very large crude carriers into the FPSO Genesis.

The transaction spans five jurisdictions, namely England, Singapore, Malaysia, Ghana and Norway, which required all of the lenders to work closely with the legal counsels to ensure the requirements in each jurisdiction are met.

The deal set a new benchmark for African corporate borrowers looking to tap into Islamic liquidity to finance new projects.

Africa Deals Islamic Finance CEEMEA

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