Pemopro closes $ 1.08 bn financing for Madero Project

Pemopro, S.A. de C.V., a Mexican special purpose company formed by SK Engineering & Construction Ltd. of Korea (70 %), Siemens AG of Germany (25 %) and Grupo Tribasa of Mexico (5 %), announced the closing of a $ 1.08 bn financing for the Madero Project. The transaction is the largest project financing in Latin America so far in 1999.
The Madero Project involves the upgrading and expansion of the Madero refinery in Ciudad Madero, Mexico which is one of six refineries in the Pemex system.
The $ 1.08 bn debt financing has a final tenor of approximately 12 years and is comprised of a $ 620 mm bank loan, of which $ 180 mm is expected to be replaced by a US Export-Import Bank Facility, a $ 260 mm export credit loan which will carry a guarantee by HERMES-Kreditversicherungs AG, the German state-owned insurer, and a $ 200 mm direct loan provided by the Export-Import Bank of Korea. The proceeds of the financing will be used to upgrade and refurbish the Madero refinery, with a scheduled completion date of December 29, 2001.

SKEC, Siemens and Tribasa won the international tender to undertake the Project through a competitive bidding process completed by Pemex in February. Under the contract with Pemex, the consortium was required to arrange the financing.
Deutsche Banc Alex. Brown was the financial adviser and Siemens Financial Services was the co-adviser to the consortium and arranger of the financing. Deutsche Bank AG was lead arranger and provider of the commercial loan financing.
"We were able to complete the financing in a very tight time frame despite difficult emerging market conditions," announced Dr. C.S. Kim, CEO and President of SKEC, Dr. Thomas Friese of Siemens and Mr. David Penaloza of Tribasa in a joint statement issued from Mexico City.
The same consortium is currently executing the $ 1.6 bn Cadereyta refinery project for Pemex, which reached successful financial close in June 1998 in a transaction led by Bankers Trust, which merged with Deutsche Bank earlier this year. The Cadereyta project is progressing very well and, as of June 1999, is over 80 % complete.

SKEC is a construction and engineering company that is affiliated with the SK Group, the fifth largest conglomerate in Korea.
Siemens AG is the German electrical and electronic company which ranks, in terms of sales, among the largest companies in that business sector in the world.
Grupo Tribasa is the second largest construction firm in Mexico.