Dewey seals first deal for Croatian govt

Dewey Ballantine has closed its first deal for the Republic of Croatia's government. The firm advised on its client's e282m (£190m) financing for the first and second phases of a motorway project.

Jonathan Simpson, a projects partner at Dewey who led the deal, got the work after acting for the government at his previous firm, Allen & Overy, which he left in May 2002.

The two-stage transaction first involved advising on the arranging of bond issues to pay back money borrowed for the first phase of the construction of the Istrian toll motorway, which links up with the Rijeka to Zagreb motorway – completed in 1998.

Dewey also advised on the arrangement of further bond issues and bank loans to finance phase two of the project, due to begin next month, involving the construction of the remainder of the motorway which will run from Croatia's border with Slovenia to the coast. These loans also cover operation and maintenance costs.

The bonds were issued by Bina-Istra, a public-private partnership which is joint-owned by Bouygues Travaux Publics, the French building contractor, and by two Croatian government-owned companies, Hrvatske Autoceste (Croatian Motorways) and Istarska Autoceste (Istrian Motorways Company). The loans were provided by Zagreba ka Banka and DEPFA Bank. UBS Warburg, which was advised by A&O and assisted by Boris Porobija of Croatian firm Porobija & Porobija, arranged the bonds and provided financial advice for the two banks.

The bonds are listed on the Luxembourg Stock Exchange and application has been made to list them on the Zagreb Stock Exchange. Croatia has never had a dual listing. “This is the first time that a major capital infrastructural project in Croatia has been financed on a project finance basis, utilising funds from a project bond and a bank financing the project,” said Simpson. The transaction took five months to complete.

Dewey was assisted by Mislav Lakti, the senior partner of Croatian firm Lakti Law Office. Simpson worked with Lakti while he was at A&O.

Dewey expects more work from former Yugoslav states, particularly arising out of the region's post-conflict restructuring and the fact that its EU accession is dependent on developing infrastructure to a certain threshold. The firm has recently received instructions to advise on projects in Croatia and Serbia.