Hogan Lovells Lee & Lee advises on the world’s first and largest sports infrastructure Public Private Partnership (PPP) project - the Singapore sports hub
26 August 2010
SINGAPORE, 26 August 2010 - Hogan Lovells Lee & Lee has advised the procuring government authority, Singapore Sports Council, on successfully closing the world’s largest sports infrastructure PPP project, the Singapore Sports Hub.
The flagship project under the Singapore Government’s PPP initiative, it will redevelop the Singapore National Stadium into a world-class sports and entertainment venue.
Hogan Lovells Lee & Lee’s role commenced in late 2004 and encompassed advising on all initial project and procurement structuring related issues, framework/regulatory advice, overall project risk analysis, preparation of documents calling for tenders from the private sector, drafting a full suite of project agreements as part of the invitation to tender, assistance to the Sports Council with running the tender process, tender evaluation and selection, negotiations with the selected tenderer and execution of all project documentation as well as advising on funding issues for the project.
The project was originally scheduled for closing in late 2008 but this was delayed as a result of the drying up of the long-term debt markets following the collapse of Lehman Brothers in September 2008. Significant restructuring of the deal and consideration of several options on the part of the Government resulted in a ground breaking solution to enable the project to reach financial close.
The deal involved a sponsor consortium group comprising HSBC Infrastructure III (No. 1) LP, HSBC Infrastructure III (No. 2) LP, SSH Co-Investment LP, Dragages Singapore Pte. Ltd, United Premas Limited and Global Spectrum Pico Holdings Pte. Ltd. Total senior debt funding of approximately S$1.8 billion was provided by 11 banks. The tenor and margins remain confidential but the fact of closing itself is remarkable given the still relatively subdued post-global financial crisis lender appetite for large capital intensive PPP projects with long term concession style contracts.
Unique features of the deal include:
- a refinancing commitment which kicks in early in the term following construction completion
- sharing of third party revenues
- establishment of a foundation to apply certain revenues for wider community purposes connected with the Sports Hub.
Under the 25 year concession/PPP contract, the private sector will design, build, finance and operate a suite of integrated sports and leisure facilities on the waterfront site, including:
- a new, 55,000 seat National Stadium with a retractable roof
- 3,000 seat multi-purpose indoor arena
- 6,000 seat indoor aquatic centre
- a sports information and resource centre
- a water sports centre to facilitate use of the adjoining Kallang basin waterway.
The Hogan Lovells Lee & Lee team was led by Singapore office managing partner, James Harris and comprised of Singapore office CEO, Amy Lee; lead transaction solicitor for the project, Julien Reidy; of counsel, Alex Wong; senior associate, Ming Hui Chock; and associate, Kyle Sanderson.
Commenting on the transaction, James Harris said:
“We have been heavily involved in the development of PPPs in Singapore since their inception and have to date advised on every PPP that has come to market. Closing this mega project is a major achievement for the Singapore Government and we are proud to have been selected by the Singapore Sports Council to work on this project.
This project cements our reputation as the leading firm for PPP work in the Asia region.”