TOKYO and NEW YORK , October 6, 2008 – Milbank, Tweed, Hadley & McCloy LLP (Milbank) has advised the lenders in the US$250 million refinancing of a working capital facility for PT Smelting (PTS), which operates Indonesia’s first copper smelter and refinery at Gresik, East Java. The transaction refinanced loan facilities entered into by PTS in 1996, which matured on September 30, 2008. PTS began commercial operations in 1999 and was one of the few Indonesian projects that successfully weathered the Asian financial crisis.
Milbank acted for the lenders, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Mizuho Corporate Bank, Ltd. as mandated lead arrangers, and Union Bank of California, N.A. as offshore security agent. The borrowing base facility was secured by Indonesian and New York law governed security over items such as receivables, project accounts and project documents, as well as supported by compulsory off-take arrangements between the borrower and its shareholders. The PTS operation processes copper concentrates from the Freeport mine in Papua (formerly Irian Jaya) to produce high-quality copper cathodes for export and local sales.
“We were very pleased to once again be involved with this pioneering project in Indonesia that successfully weathered the Asian financial crisis and had its original financing termed out,” said David Impastato, a New York-based partner, who led on the deal. “We achieved a successful refinancing within a very tight timetable and in turbulent loan market conditions. This transaction involved multiple time zones and jurisdictions owing to the borrower being located in Indonesia, the lenders in Singapore and Japan, sponsors in Japan and the offshore collateral agent in New York.”
Mr. Impastato was supported on the transaction by associate Leigh Schulz and legal assistant Mayuko Fukui in Tokyo. Makarim & Taira S. was the Indonesian counsel for the lenders, Latham & Watkins was international counsel for the borrower, and Ali Budiardjo, Nugroho, Reksodiputro was the Indonesian counsel for the borrower.
Milbank has three decades of experience as a leader in international financial transactions in Asia and has advised on some of Indonesia’s largest and most complex project financings. The firm has approximately 40 lawyers in Asia, nearly half of whom focus on financing and projects transactions. The Asian Project Finance Practice is led by Gary Wigmore, based in Tokyo. Senior members of the Asian team include Mark Plenderleith, head of acquisition, project and energy finance in Tokyo; David Zemans, managing partner, and James Murray, senior project finance lawyer, in Singapore; and Young Joon Kim, partner and Desiree Woo, of counsel, in Hong Kong.
Milbank, Tweed, Hadley & McCloy LLP is a leading global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex and innovative corporate transactions. Our transactional expertise includes Capital Markets, Corporate Finance, Project Finance, Acquisition Finance and other major fields of law practice. Headquartered in New York, Milbank has 10 offices worldwide, including Beijing, Hong Kong, Singapore and Tokyo.