MTC Engaged for PKR 12.5 Billion Distillery Project Financing

Mohsin Tayebaly & Co. had been engaged as transaction legal counsel with respect to the syndicated finance facilities in the aggregate amount of up to PKR 12,500,000,000/- (Pak Rupees Twelve Billion Five Hundred Million) being availed by JDW Sugar Mills Limited (the “Company”) from a consrtium of banks / financial institutions, for which purpose MCB Bank Limited has been appointed as the syndicate agent on behalf of the conventional financiers and Meezan Bank Limited has been appointed as the Investment Agent on behalf of the Islamic financiers and as the Shariah Advisor.

MCB Bank Limited has also been appointed as the Intercreditor Agent and Security agent for the facilities.

The facilities are being availed for the purposes of partially financing the construction and commissioning of a new ethanol distillery plant with an installed capacity of 230,000 (two hundred thirty thousand) litres of fuel grade ethanol for the local and export markets, to be situated at Kot Subzal in Punjab, Pakistan (the “Project”) and for funding the working capital requirements of the Company with respect to the Project.

The facilities include:

(i)  A long-term component in the aggregate amount of up to PKR 9,000,000,000/- (Pak Rupees Nine Billion) which is a hybrid of KIBOR based financing and financing under the State Bank of Pakistan (“SBP”)’s scheme for long-term finance facilities, comprising of:

• Syndicated conventional financing in the aggregate amount of up to PKR 5,500,000,000/- (Pak Rupees Five Billion Five Hundred Million), being availed from MCB Bank Limited, The Bank of Punjab and National Bank of Pakistan;
• Shariah compliant financing under the Islamic mode of Diminishing Musharaka, being availed from Meezan Bank Limited, The Bank of Punjab and MCB Islamic Bank Limited; and
• An un-funded letters of credit facility in the aggregate amount of up to PKR 5,000,000,000/- (Pak Rupees Five Billion) which is a sub-limit of the long-term finance facilities.

(ii)  A short-term component in the aggregate amount of up to PKR 3,500,000,000/- (Pak Rupees Three Billion Five Hundred Million), to be availed by the Company after the Commercial Operations Date for the purposes of meeting the working capital requirements of the Project, which is a hybrid of KIBOR based financing and financing under SBP’s scheme for export financing, comprising of:

• Syndicated conventional financing in the aggregate amount of up to PKR 2,750,000,000/- (Pak Rupees Two Billion Seven Hundred Fifty Million) to be availed from MCB Bank Limited, The Bank of Punjab and National Bank of Pakistan; and
• Shariah compliant financing under the Islamic mode of Running Musharaka, in the aggregate amount of up to PKR 1,000,000,000/- (Pak Rupees One Billion), being availed from Meezan Bank Limited.

The Firm’s scope of work included full scope lender side advisory.

MTC’s team in this matter was led by Vaseeq Khalid (Partner) and included Mahad Memon (Senior Associate), Kamil Tayebaly (Associate) and Salal Malik (Associate).