CC and Lovells navigate Egyptian law on Abraaj acquisition

Clifford Chance

and Lovells played lead roles on a major refinancing in the Middle East and North Africa.

Lovells, led by global head of Islamic finance Rahail Ali, advised Middle East private equity firm Abraaj Capital on its $424m (£205.85m) refinancing of Indo Egyptian Fertiliser Company (EFC).

Earlier this year (11 June) The Lawyer reported on Abraaj Capital’s acquisition of EFC from private equity house Citidel Capital and Morningtide Invest. Clifford Chance acted for Abraaj, while an Allen & Overy team acted for the vendors.

Clifford Chance, led by Dubai-based partner Robin Abraham, advised the underwriter Deutsche Bank. The transaction was arranged as part conventional and part Islamic financing.

Abraham said: “The deal was interesting because the original acquisition was done via conventional methods so that the deal could be completed in better time. However, the idea was always to enable a sharia-compliant refinancing, so the transaction was approved by an Islamic scholar in the early stages.”

The original acquisition was completed in May, with the refinancing closing earlier this month. Ali said: “There was a number of complexities. Complying with Egyptian law was a challenge. Adapting the structure to make it sharia-compliant while taking into consideration Egyptian law did make it more interesting for us.”

Ali and his team joined Lovells in May from Denton Wilde Sapte. “The team’s done well in Dubai since the office launched in May,” said Ali. “While the credit crunch has been a significant issue in other markets, the Middle East has been relatively unaffected due to its lack of involvement with the mortgage market.”

On the Abraaj deal Lovells worked with Egypt’s Nassar Law Office, while Clifford Chance worked with Sharkawy & Sarhan on local law issues.