2 October 2004 LAWFUEL – Best law news, legal, attorney, law firm,…

2 October 2004 LAWFUEL – Best law news, legal, attorney, law firm, PPP deals news Clifford Chance brings the first Motorway PPP in Hungary to a happy ending
Clifford Chance has been instrumental in bringing the EUR 750 million M5 PPP
motorway project to a successful financial close in Budapest on 22

A team of finance and corporate lawyers led by Péter Köves, managing partner
of the Budapest office, have been advising the Ministry of Economy and
Transport of Hungary extensively since the beginning of the year on what is
understood to be a landmark transaction.

The first phase of the transaction, which included the acquisition of a
shareholding by the Hungarian State through the state-owned motorway
operator (ÁAK Rt.) in the Concession Company (AKA Alföld Koncessziós
Autópálya Rt.), was closed in March 2004. The first phase also saw the M5
toll motorway brought into the national vignette system of the Hungarian
motorways. Following the relevant amendments to the concession agreement,
the first Hungarian PPP structure was implemented on the basis of the
availability fee model.

The second phase of the Project included the refinancing of equity and debt;
the provision of a construction project loan for Phase 2 of the motorway;
the ongoing restructuring of the concession agreement-based contractual
system and the refinancing of the existing debt of the Concession Company. Gavin
Teague, a partner at Clifford Chance London office contributed
international PPP expertise to the first phase of the transaction, which is
regarded as setting a precedent by both government and the business
community in Hungary and in Central Europe.

Istvan Csillag, Hungarian Minister of Economy and Transport, said:
“This is a truly ground-breaking transaction, the first of its kind in
Hungary, and the professional advisers have contributed significantly to the
success of the project. I am convinced that the success of the M5 will give
a boost to the smooth implementation of the M6 motorway project currently
taking place, as well as underlining the importance of the PPP structure in
the rapid development of infrastructure sectors in Hungary and the whole CEE

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