In June 2008, ACS on behalf of Escal secured a €1.3 billion project financing package from a syndicate of 19 banks, representing approximately 85 percent of the total project development requirement including interest during construction. ACS will fund the balance of the project costs through to commissioning and start-up, which is expected to take place in late 2012. Please click here for details.

 

 

The agreement’s key features are:

 

• ACS increased its equity ownership in Escal UGS S.L., the Spanish operating company developing the Castor project, to 66.7 percent. Castor Limited Partnership (CLP), which Dundee Energy (formerly Eurogas) controls through its 73.7 percent ownership, reduced its ownership in Escal to 33.3 percent. Dundee Energy therefore has an indirect ownership position in Escal and the Castor project of 24.6 percent;
• Upon completion of construction, ACS will sell half of its 66.7 percent interest to Enagas, Spain’s natural gas system operator;
• During the project’s development phase ACS controls all facets of the project’s implementation. It has six of the nine seats on the Escal board of directors, while CLP has two and Enagas one. Upon Castor’s completion and inclusion in Spain’s natural gas system, each party will be allocated seats on a basis proportionate to its equity;
• CLP received $43.4 million as reimbursement of most of the capital invested in the Castor project to date;
• ACS will provide all further equity funding to complete the Castor development as currently designed and approved by the government. ACS will be responsible for arranging project financing and other interim bank financing. It will also be responsible for all project guarantees required by the relevant authorities, and any financial guarantees required by lenders. Dundee Energy will, however, be a party to project financing arrangements in its capacity as a shareholder of Escal and may need to meet certain conditions, such as pledging the Corporation’s interest in the project as collateral;
• Upon completion of construction, CLP will retain the right for a period of 180 days to sell its interest to ACS and Enagas at the same value as ACS’ sale to Enagas; and
• In whatever form ACS funds Escal, CLP will have the right to 33 percent of Escal’s distributable cash flows, after debt service, and will have the right to 33 percent of the equity of Escal and of any subordinated loans from ACS to Escal.