Jones Day, King & Spalding and Norton Rose lead on sharia-compliant property deal

A joint venture between Saudi-based Jadwa Investments and the UK’s CIT secured a £100m senior facility from a consortium of banks led by ABC International Bank, a European subsidiary of Arab Banking Corporation, and around £100m mezzanine financing from Saudi Arabia’s Mohammed Al Subeaei & Sons Investment Company (Masic). The latter also has an interest in the Isle of Man-based joint venture set up by Jadwa and CIT. All the financing was sharia-compliant.

CIT and Jadwa will use the investment to fund the building’s redevelopment, which will see the tower extended by six floors and provide residential, office and retail space.

Jones Day, led by London partners David Smith, Neil Ferguson and Andrew Barker, who specialise in real estate, private equity and banking, respectively, advised King’s Reach Estates, the joint venture between CIT and Jadwa.

King & Spalding’s London office, led by Islamic finance partner Michael Rainey, advised Masic. The deal also provided King & Spalding’s new real estate team - brought in from Fried Frank Harris Shriver & Jacobson earlier in the year (9 July 2012) - with its first significant piece of work. London partner Kevin Conway advised on tax issues, while Riyadh partner Benjamin Newland handled the deal’s corporate and Saudi law aspects.

Norton Rose advised the syndicate of banks. Dubai-based head of Islamic finance Mohammed Paracha led on the deal, while London partners Wasim Khan, Chris Hill and John Challoner advised on property, construction and tax issues.

Background to this deal:

Norton Rose won the deal acting for the consortium of banks, which was led by ABC International but also included the National Bank of Kuwait and Bank of London and the Middle East, following an invitation to pitch. Norton Rose has a strong relationship with ABC that goes back a number of years and stems from Islamic finance head Paracha’s dealings with the Bahrain-based bank. According to Khan, the firm had already closed three Islamic financings for real estate deals for ABC in London over the past month or two, before doing the King’s Reach Tower deal.