A&P, DLA, and Milbank in Japanese loan to PDVSA

June 30, 2011 1:44 PM

As Japan seeks new energy sources in the aftermath of March's nuclear power crisis, Japan Bank for International Cooperation (JBIC) has turned to DLA Piper and D'Empaire Reyna Abogados to advise on two loans made with a group of Japanese banks to Venezuelan's state-owned oil company, PDVSA.

The loans, each worth US$750 million, were agreed on Tuesday. Arnold & Porter LLP advised PDVSA, which looked to in-house counsel in Venezuela. The oil company also signed two supply contracts with Japan's Mitsubishi and Itochu. Milbank, Tweed, Hadley & McCloy LLP and Rodriguez & Mendoza advised the trading houses.

The lending banks included the Bank of Tokyo Mitsubishi and Mizuho Corporate Bank, with Marubeni and Mitsui also participating.

Milbank Tweed partner Dan Bartfeld says the loan agreements have come at a pinnacle time for Japan: "These transactions are of critical importance to the trading houses, particularly in light of the nuclear catastrophe this spring. The Japanese energy sector needs to import tremendous resources, and Venezuela has among the world's largest oil reserves."

The US$1.5 billion from JBIC, eight other banks and two companies, is also a much needed cash-injection for PDVSA. The loans will finance the expansion of two large oil refineries; El Palito and Puerto La Cruz.

The transactions come four years after PDVSA signed a US$3.5 billion, 15 year supply agreement Mitsui and Marubeni, in which Milbank Tweed, Arnold & Porter, Rodríguez & Mendoza, and D'Empaire were also involved.

Reinaldo Hellmund, partner at Rodriguez & Mendoza, says it took six months to put all the documents in place. "It was a complex structured financing that involved not only financing and security agreements but also several commercial agreements," he explains.

Counsel to Japan Bank for International Cooperation

International

DLA Piper

Partner David Robbins and associates Youju Min, Jonathan Brooks, Gred Chludzinski and Cody Dydek

Venezuela

D'Empaire Reyna Abogados

Partner Carlos Omaña and associates Gustavo Boccardo and Clovis Treviño

Counsel to PDVSA

In-house counsel - Constanza Quevedo

International

Arnold & Porter LLP

Partner Neil Goodman, associate John Gatmaitan, and foreign attorney Jorge Almengor

Counsel to the trading companies

International

Milbank, Tweed, Hadley & McCloy LLP

Partner Dan Bartfeld and associate Tim Fitzpatrick

Venezuela

Rodríguez & Mendoza

Partner Reinaldo Hellmund and associates Miguel Velutini and Carlos Martinez

(Source: Latin Lawyer)

30 June 2011