28 July 2004 Read today legal news, law firm news & legal researc…

28 July 2004 Read today legal news, law firm news & legal research at LAWFUELThe EUR360 million project to finance the construction and rehabilitation of the 60km Croatian real toll motorway that runs from Zagreb to Macelj on the Slovenian border closed last week, and the first draw-down of funds occurred on 28 July.

German construction firm Walter Bau AG and Austrian partner Strabag formed a joint
venture with the Croatian government to construct and maintain the motorway, which
is intended to solve congestion in the vital Pyhrn Corridor (part of the
Trans-European Network) linking Western and South-Eastern Europe. International law
firm Freshfields Bruckhaus Deringer advised Walter Bau and its special purpose
affiliate Walter Concession Holding GmbH on the project.

Walter Concession Holding and the Republic of Croatia have, respectively, 51% and
49% of Autocesta Zagreb-Macelj, a special purpose vehicle set up to represent the
toll motorway concession. The project includes rehabilitation and widening of an
existing 40km stretch of road, and the construction of 20km of new road through the
mountains to the border, including 7km of tunnels. The concession period, during
which the joint venture will operate and maintain the road, will be 28 years.

Kent Rowey, who led the Freshfields Bruckhaus Deringer team, commented, ‘This is one
of the most innovative motorway deals to be done in Central Europe so far. There is
significant government shareholding and traffic shortfall support, which makes it a
PPP in the truest sense, and a financing plan which combines toll revenues for
operation of an existing road, uncovered senior debt, a Hermes (Germany’s export
credit agency) export credit tranche, a mezzanine tranche insured by the German
government and shareholder funds’.

The financial advisers to Walter Bau AG/Walter Concession Holding GmbH and the
Republic of Croatia were Bank Gesellschaft Berlin AG and Fortis Savjetovanje d.o.o
respectively. The Croatian government was advised by Allen & Overy and Croatian law
firm Hanzekovic, Radakovic and Partners on legal issues. The mandated lead
arrangers were KfW, Bayerische Hypo-Und Vereinsbank, Bank Austria Creditanstalt and HSH Nordbank, and were advised by Clifford Chance and Croatian law firm Bogdanovic, Dolicki & Partneri.

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